Landlord Can't Collect Electricity Surcharge

Tenant complained of rent overcharge. On Jan. 7, 2005, his building left the Mitchell-Lama program and became rent stabilized. Under Mitchell-Lama, the building was electrical inclusion and tenants were charged an additional amount for large appliances. Landlord obtained permission from the DHCR in 2007 to convert to submetering. After the submetering was completed, landlord continued to include appliance surcharges in the rent although the agency's submetering order had directed landlord to discontinue these charges. The DRA ruled for tenant and ordered landlord to refund the overcharge, including interest, based on the improper appliance charges.

Landlord appealed and lost. Landlord argued that the DRA improperly used Jan. 7, 2005, as the base rent date because tenant's complaint was filed on Nov. 19, 2010. Landlord also claimed that the Mitchell-Lama appliance charge had become part of tenant's initial rent-stabilized rent and therefore couldn't readily be calculated or separated from tenant's rent. The DHCR found that the DRA didn't violate the four-year rule in determining the overcharge and that the improper appliance charge that was folded into tenant's initial rent-stabilized rent could be determined and removed easily enough.

West 97th Street Realty Corp.: DHCR Adm. Rev. Docket No. BP410015RO (2/18/14) [4-pg. doc.]