Triple Damages Imposed for Untimely Overcharge Refund

Rent-stabilized tenant complained of a rent overcharge. The DHCR ruled for tenant and ordered landlord to refund overcharges, which included triple damages. Landlord appealed, claiming that the DHCR's decision was arbitrary and unreasonable. Landlord had tried to refund the overcharge to tenant after tenant complained, but tenant rejected the offer. The court ruled against landlord. DHCR Policy Statement 89-2 permits landlord to overcome a finding of willful rent overcharge by making a refund within the time allotted to answer the DHCR's notice of a tenant complaint. The fact that tenant rejected the refund didn't matter. Landlord's refund attempt was made after this time limit ended. Landlord argued that it wasn't possible to make the refund before the DHCR issued a final notice of triple damages, because the overcharge total couldn't be determined before then. But although this notice didn't set forth the interest due on the overcharge, landlord could have gotten that information and didn't contact the DHCR during the seven months between the notice of tenant's complaint and the final notice. The DHCR's decision was reasonable under the circumstances.

554 W. 181 LLC v. DHCR: Index No. 102717/2010, NYLJ No. 1202481041301 (Sup. Ct. NY; 1/26/11; Madden, J)