DHCR Can "Bridge the Gap" to Determine Rent Overcharge

Tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $36,000. Landlord appealed and lost. Landlord claimed that the DRA improperly looked back more than four years to determine the rent overcharge. Landlord had mistakenly deregulated the apartment due to a high-rent vacancy at a time when the building was receiving J-51 tax benefits. So the DRA properly looked back at rent history records for periods prior to four years before tenant’s complaint was filed. There was no need to find fraud to do this. But the default formula used by the DHCR to set the rent in cases of fraud didn’t apply. The DRA can “bridge the gap,” using the last reliable rent-stabilized rent charged before the base rent date and adding intervening lawful rent increases up to the base date. The DRA did so in this case.

Yorkshire Towers Company, LP: DHCR Adm. Rev. Docket No. CU410040RO (5/1/15) [4-pg. doc.]