Landlord's Collection of $400 Rental Fee Was Overcharge

Tenant complained of a rent overcharge. He stated that when he signed the first lease for his rent-stabilized apartment, landlord charged him a real estate fee of $400. Landlord claimed that tenant paid the fee to cover the costs of checking tenant's references, employment history, and credit rating. Landlord said that some issues with tenant's financial history and prior addresses required extensive review and analysis. The DRA ruled for tenant and found that the overcharge was willful. Landlord was ordered to refund $1,200. Landlord appealed and lost. The ETPR defines "rent" to include payment by tenant of a fee or rental commission to landlord or its employees in connection with the operation of the building. Therefore, rental fee was rent collection over and above the legal rent. It was therefore an overcharge.

Dorchester, LLC: DHCR Adm. Rev. Docket No. VB710022RO (7/31/07) [3-pg. doc.]