Landlord Overcharged Tenant by Charging Illegal Broker's Fee for Apartment

Rent-stabilized tenant complained to the DHCR of rent overcharge based on a broker's fee of $3,024 charged by landlord's property manager for an apartment that rented for $1,680 per month. The DRA ruled for tenant and ordered landlord to refund  $9,072, including triple damages.

Landlord appealed and lost. Landlord claimed that the broker's fee was paid to a realty company that wasn't affiliated with the building owner. But tenant had claimed that the broker's fee was paid in cash to "Mike," the property manager, who gave tenant a receipt. Tenant had never heard of the realty company landlord claimed was the broker. But there was no proof that tenant communicated with or paid the realty company directly. Landlord produced no bill from the realty company for its services, and a typical broker's fee in NYC was 15 percent of monthly rent. There was no explanation for why the broker's fee here was "exorbitant." Landlord violated the DHCR's longstanding policy on broker's fees, set forth in Fact Sheet #9.

Ufaratza, LLC: DHCR Adm. Rev. Docket No. NM310022RO (5/23/25)[3-pg. document]