DHCR Mistakenly Treated Overcharge Complaint as Fair Market Rent Appeal

Tenant complained of rent overcharge. The DRA treated the complaint as a fair market rent appeal (FMRA), ruled for tenant, set the apartment's initial legal regulated rent using the default formula, and ordered landlord to refund $138,665, including triple damages.

Landlord appealed, and the DHCR reopened the case for further consideration by the DRA. The DRA incorrectly found that the base date for a fair market rent appeal was four years before tenant filed her complaint. But, as landlord pointed out, a FMRA can only be filed within four years of the date of the first occupancy of a tenant after termination of a rent-controlled tenancy. Since the complaining tenant moved into the apartment in 2005, she wasn't permitted to file a FMRA more than four years after she moved in. And failure to serve an RR1 form on the initial rent-stabilized tenant after rent control wasn't a valid reason for setting the rent by using the default formula. So the case was sent back to the DRA to be treated as a pre-HSTPA rent overcharge complaint.

Pino Realty Corp.: DHCR Adm. Rev. Docket No. IU210019RO (5/6/21) [6-pg. doc.]