Default Method Used Where Tenant Was Illusory on Base Date

Tenant complained of a rent overcharge. The DRA ruled for tenant and ordered landlord to refund $41,000, including triple damages. The DRA used the DHCR's default method to set the base date rent. Landlord appealed, claiming that the apartment had been occupied by prior tenant, who had a lease on the base date. Landlord also claimed that there was no willful overcharge. The DHCR ruled against landlord. On the base date, tenant lived in the apartment as subtenant of prior tenant. But prior tenant had never actually lived in the apartment and was an illusory tenant. Under these circumstances, the DRA could look behind the base date rent and use the default method. It was also proper to impose triple damages to deter other landlords from setting up illusory tenancies. Tenant didn't participate in the irregular practices between landlord and prior tenant that resulted in the illusory tenant.

37-15 72nd Street Assoc. LLC: DHCR Adm. Rev. Docket No. UK110006RO (4/20/07) [3-pg. doc.]