Triple Damages Applied to Rent Overcharge After IAIs Disallowed

The DHCR’s Tenant Protection Unit (TPU) brought an Individual Apartment Improvement (IAI) audit against landlord based on review of an apartment’s rent registrations. TPU required landlord to submit proof justifying the cost of IAIs applied to the legal rent resulting in a substantial rent increase from 2010 to 2011.  Landlord submitted proof of the IAIs and a copy of the last lease preceding the IAI rent increase. TPU advised landlord that reglazing a bathtub and scraping, sanding, and sealing a bedroom floor was repair work and not an IAI. The TPU ordered landlord to reduce the legal rent, file amended apartment registrations, refund any overcharges, and serve an amended lease reflecting the new legal rent within 30 days. Landlord didn’t respond, and TPU sent the case to the DRA for processing of a rent overcharge complaint. The DRA ruled for tenant and ordered landlord to refund $4,322, including triple damages.

Landlord appealed and lost. Landlord claimed that there was no willful overcharge by its mistaken collection of IAI rent increases for the disallowed repair items. But, to avoid a finding of willful overcharge, landlord should have reduced tenant’s rent while the case was pending for 10 months before the TPU. Landlord also failed to comply with the TPU’s instruction to refund the overcharge.  And collection of a rent increase for normal repairs and maintenance is not a hypertechnical error. 

Rondale Building Corp.: DHCR Adm. Rev. Docket No. CW210019RO (5/26/15) [8-pg. doc.]