Landlord Believed J-51 Unit Was Deregulated

Tenant complained to the DHCR of a rent overcharge. Landlord claimed that it believed the apartment was deregulated after prior tenant vacated and the new monthly rent was more than $2,000. The DHCR ruled for tenant, found the overcharge was willful, and ordered landlord to make a refund that included triple damages. The apartment couldn't be deregulated because landlord received J-51 tax benefits for the building. Landlord appealed, claiming that the DHCR's decision was arbitrary and unreasonable. Landlord said it was unfair to find the overcharge willful because she didn't know the law and her attorney had advised her incorrectly. The court and appeals court ruled against landlord. Landlord knew that the building was subject to J-51 and wasn't excused by her ignorance of the law. The DHCR's decision was reasonable.

Obiora v. DHCR: NYLJ, 10/18/10, p. 26, col. 6 (App. Div. 2 Dept.; Covello, JP, Leventhal, Hall, Sgroi, JJ)