Building Was Horizontal Multiple Dwelling on Base Date

Tenant complained to the DHCR of rent overcharge. Landlord claimed that tenant’s building contained fewer than six apartments and therefore wasn’t rent stabilized. The DRA ruled for tenant and ordered landlord to refund overcharges with triple damages. Landlord appealed and won, in part. Landlord claimed that the building may at one time have been part of a garden-type maisonette but was deregulated when it was sold prior to 1987. At any rate, landlord argued, it believed in good faith that the apartment was unregulated and there was no willful overcharge.

The DHCR pointed out that Rent Stabilization Code Section 2520.11(d) states a building is deemed to contain six or more apartments if it was part of a multiple family garden-type maisonette dwelling complex with common facilities and was operated under common ownership on the date the building or complex first became subject to rent stabilization. Subdivision by selling off the building before 1987 didn’t deregulate the building. An inconsistent answer previously posted on the DHCR’s website, in an online Q&A connected with DHCR Advisory Opinion 97-1, was incorrect and not binding. Landlord’s failure to properly register tenant’s apartment froze tenant’s rent at $1,450 until landlord registered the apartment. However, the DRA improperly assessed triple damages because the overcharge finding was based solely on the rent freeze. The total rent overcharge including interest was $3,673.

West Bank Realty: DHCR Adm. Rev. Docket No. CQ110013RO (5/6/15) [4-pg. doc.]