No Triple Damages Applied to Rent Overcharge for Improperly Deregulated Apartment

Rent-stabilized tenant complained to the DHCR of rent overcharge in 2020, and claimed that landlord collected more than the permissible Rent Guidelines Board (RGB) increase from 2009-2020. Landlord claimed that tenant was charged a preferential rent since she moved in, and that the rent had been lawful at all times. The DRA ruled against tenant, finding no overcharge.

Tenant appealed and won, in part. The building had received J-51 tax benefits since 1995 and therefore was subject to rent regulation. Lease records showed that landlord had attempted to deregulate the apartment in August 2009 when it offered tenant a market lease and registered the unit as exempt. This was reasonable at the time since the Court of Appeals didn't decided the case of Roberts v. Tishman Speyer Props until later that year, which prohibited vacancy deregulation while a building was receiving J-51 tax benefits. Landlord quickly offered tenant a rent-stabilized lease commencing Sept. 1, 2010, and started registering the apartment as rent stabilized. In Regina Metro. Co., LLC v. DHCR, the Court of Appeals later ruled in 2020 that, in situations where an owner mistakenly deregulated a J-51 apartment prior to the Roberts decision, the rent charged and paid on the base date would become the legal regulated rent and the basis upon which any future overcharges would be determined. Based on the corrected LRR, the total overcharge with interest was $16,055. The DHCR found that the overcharge wasn't willful and didn't assess triple damages. 

Kohrherr: DHCR Adm. Rev. Docket No. MU410014RT (2/20/25)[6-pg. document]