Landlord Not Liable for Overcharge Collected by Tenant

Subtenant complained of a rent overcharge. The complaint was served on both prime tenant and landlord. Subtenant paid rent directly to tenant. Landlord claimed it had no knowledge of the sublease. The DRA ruled for subtenant, finding willful overcharge and ordering a refund of $12,000. Landlord appealed. Although the DRA's order directed tenant to refund the overcharge, landlord asked that the DHCR remove all references in the order, which also directed landlord to pay back the overcharge. The DHCR ruled for landlord. It was clear that all overcharges were collected by tenant and that landlord never received any amount in excess of tenant's lawful rent. The DRA's order was modified to clarify that all overcharges due to subtenant were to be collected from tenant, not landlord.

Sutton Lane Realty Co.: DHCR Admin. Rev. Dckt. No. EE410047RO (4/1/96) [3-page document]