Tenants Get Attorneys' Fees in DHCR Rent Overcharge Proceeding

Tenants complained separately in 2016 of rent overcharge and improper deregulation of their shared apartment. Each tenant had rented a single room in the same apartment without a lease. The DRA combined the cases, ruled for tenants, and ordered landlord to refund $55,249, including triple damages and interest. The DRA set the base date rent as Dec. 27, 2012, the date four year prior to the filing of the first complaint. The DRA also set the base rent at $666.67 per month using the default rent formula because landlord hadn't produced a lease or rent ledger in effect on the base date. Landlord and tenants both appealed.

The DHCR ruled for tenants in part. Tenants argued that landlord should identify and make refunds to additional tenants who had been overcharged. But Rent Stabilization Code Section 2526.1(c)(1) requires the DHCR to give notice to all affected tenants in proceedings commenced by the DHCR, not in proceedings like this one commenced by filing of tenant complaints.

The DHCR granted tenants' additional claim for attorneys' fees. The Court of Appeals' 2020 Regina decision found that HSTPA's mandatory attorney fee amendments to the Rent Stabilization Law applied to pending cases. And the DHCR had broad discretion as to the method of calculating reasonable attorneys' fees. The DHCR approved $425 per hour as a reasonable rate based on the experience level of tenants' attorney, and the total attorneys' fees awarded were $8,691. The DHCR ruled against landlord, who argued on appeal that the DHCR should've relied on registered rents instead of applying the default formula to determine the base date rent. But registrations, by themselves, don't legally establish the base date rent in the absence of contemporaneous rent records such as leases or ledgers. 

Lang/479 W. 146th Street LLC: DHCR Adm. Rev. Docket No. IS410091RK (2/2/21) [6-pg. doc.]