Rent Overcharge Decided Using Default Formula

The DHCR's Tenant Protection Unit (TPU) reviewed 2014 and 2015 rent registrations for an apartment and conducted a rent audit, requesting rent history documentation from landlord. Landlord didn't comply after a number of notices were issued, and TPU then reset the rent to $1,035 plus any applicable increases. TPU also directed landlord to amend rent registrations. After landlord failed to respond to its order, TPU referred the matter to the DRA for a rent overcharge proceeding. The landlord eventually responded to the DRA, stating that the apartment was deregulated based on leases starting Oct. 1, 2015. The DRA ruled against landlord, computing an initial legal rent for tenant of $900 per month using the default formula. 

Landlord appealed and lost. Landlord claimed that it wasn't aware of the TPU audit and had no opportunity to submit documents concerning IAIs to the TPU. But TPU notices had been sent to landlord's registered address, and this claim wasn't made when landlord was initially notified of the rent overcharge complaint based on the TPU audit ruling. Application of the Rent Stabilization Code's default formula also was proper since landlord submitted no base date lease records. The base rent date was January 2014, and leases submitted by landlord only started with the Oct. 1, 2015, unregulated lease.

Kwik Realty, LLC: DHCR Adm. Rev. Docket No. MS410006RO (12/3/24)[4-pg. document]