Willful Rent Overcharge Resulted from Unlawful and Discontinued On-Time Rent Concession

Rent-stabilized tenant complained to the DHCR of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $90,000, including triple damages and interest. Landlord appealed and lost. Landlord had discontinued tenant's preferential rent based on a lease clause that required on-time rent payment for continuation of a $1,500 rent concession. Landlord argued that the on-time rent concession was lawful, at least under prior interpretations of applicable law between 2015 and 2021. The DHCR disagreed, pointing out that the DHCR and courts had never permitted on-time rent discounts. Landlord incorrectly claimed that the original version of DHCR Fact Sheet No. 40 stated that on-time rent discounts were permissible, that Fact Sheet didn't discuss on-time rent discounts, and a later version of Fact Sheet No. 40 clarified that an on-time rent concession clause actually gave tenants a preferential rent. The DRA also correctly found rent overcharges resulting from a 1988 rent reduction order, which froze the apartment's legal rent. Since landlord made no attempt to refund the resulting overcharge to tenant, the DRA correctly imposed triple damages.

Belair Park 8825 LLC: DHCR Adm. Rev. Docket No. LR110006RO (8/20/24)[4-pg. document]