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One Way to Avoid Treble Damages on a New Overcharge Complaint - Just Do the Math...


September 2, 2018

A landlord bought a small, residential building in Manhattan. Several months after the purchase, a tenant, who incidentally was not paying his rent, hit landlord with a DHCR Rent Overcharge Complaint. Landlord brought the case to me for a Legal Project Management Analysis. I determined that the tenant had, indeed, been overcharged. In fact, in the course of my analysis and via a records requisition request at DHCR, I discovered that there was a DHCR order regarding the apartment from two years earlier, establishing the legal rent. The rent that the previous landlord had been charging tenant was higher than the legal rent. Incidentally, had the purchaser-landlord done a Rent Stabilization Due Diligence before the purchase, she would have discovered this infirmity in the rent roll, but I digress.

I wrote tenant a letter, informing him that landlord would not be disputing the overcharge, and suggesting how the matter might be settled. The letter included a chart comparing what tenant had paid (as per his DHCR complaint) in the last 48 months to the legal rent (as established in the DHCR order I had unearthed). I concluded that tenant had been overcharged, with interest, in the amount of $11,106.46. Via this letter, landlord offered to compensate tenant for the overcharge by allowing him to live rent free for about 6 months, which would compensate tenant for the exact amount of the overcharge. I suggested that during those 6 months, landlord would send tenant a monthly statement demonstrating how the rent credits gradually alleviate the overcharge amount. I also enclosed a new Rent Stabilized lease renewal offer, with all relevant riders, reflecting the lower, legal rent amount. I asked the tenant if he needed repairs. I suggested that this new landlord was not intending to be like the old landlord and that perhaps the parties could get off to a fresh start. The letter urged tenant to share a copy of the letter with his lawyer, if he had one.

Landlord’s “answer” to the Overcharge Complaint was a brief introductory note, and a copy of the letter to tenant. Tenant withdrew his overcharge complaint after the six months had passed and he was fully compensated. DHCR never had to make a decision on the matter, and no treble damages were awarded. Tenant resumed paying rent.

What’s the lesson?

This situation was easier than most, because I took the time to requisition and review all DHCR records on the apartment, and I discovered that there was a ruling on the legal rent. Nevertheless, I see way too many landlord responses to these types of proceedings that are like spitting into the wind. These overcharge cases are objective; the legal rent is objective. Spending six years litigating at DHCR just kicks the can down the road, increases legal fees, and damages. A tenant has either been overcharged or she has not been overcharged. Most of the time, it’s just math. Landlords could save resources if they just own up to that math immediately.

Respectfully submitted,



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