Tenants Claim Court Order Barred Rent Collection Due to Invalid C of O

Tenants complained to the DHCR of rent overcharge in early 2019. They claimed that landlord illegally rented rent-stabilized apartments in the building without a proper Certificate of Occupancy (C of O). They said that the NYC Civil Court issued an August 2017 order holding that landlord was barred under MDL Section 302 from collecting rents without a valid C of O.

The DRA ruled for tenants for a different reason. The DRA found that the DHCR had issued a separate rent reduction order for the apartment made effective on Oct. 1, 2015, due to a reduction in apartment services. This resulted in an overcharge, including triple damages, of $17,183.

Landlord appealed and won. Landlord pointed out, and the DHCR agreed, that the prior DHCR order wasn't a rent reduction order and didn't have an effective date in 2015. It was merely an order granting landlord permission to reduce the space in the apartment in order to complete certain work. Landlord later completed the work, which resulted in an apartment size reduction and rent reduction that took effect on Dec. 14, 2018. By that time tenants had stopped paying rent. So, there was no rent overcharge. The DHCR also noted that, if landlord had violated the court order concerning the building's C of O, tenants should pursue any dispute about rent payments before the court that issued that order. 

GVS Properties, LLC: DHCR Adm. Rev. Docket No. LT410007RO (11/7/23)[4-pg. document]