Foreclosure Prevention

Overcharge

Overcharge
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OVERVIEW

For rent stabilized apartments, owners may be ordered to refund excess rent based on a finding of rent overcharge. A finding by DHCR of a willful rent overcharge by the owner may result in the assessment of treble damages.

Collecting Overcharge

  1. Offset Method

    The tenant may deduct up to 20% of the penalty from the monthly rent until the penalty is completely offset. If 20% of the penalty exceeds the tenant's monthly rent, the tenant need not pay any rent until the full amount of the refund due is recovered. Before exercising this option, the overcharged tenant must wait 35 days from the issuance of the Rent Administrator's order. If a PAR is filed, the overcharge penalty cannot be offset until the PAR order affirms that an overcharge occurred and determines the final amount of the penalty.

  2. Judgment Method

    The filing of a judgment may result in a lien being placed against the owner's real property. If the owner does not satisfy the judgment, the lien may be enforced against the owner's property by a county sheriff or the city sheriff. To use this option, the penalty must exceed $1,000, or if less, the tenant must have moved from the apartment. Under this option, the tenant must also wait 35 days for the PAR filing period to expire.

Also see Fact Sheet #16: Collecting Overcharges in Rent Stabilized Apartments in New York City

Fact Sheet #16 Translations:

Frequently Asked Questions

Under what circumstances can a late fee and/or legal fees be charged?

There must be clauses in the original lease that authorize the collection of these fees. If these clauses are not included in the original lease, they cannot be charged.

Please note, the amount of the late fee must be reasonable. DHCR has generally considered a late fee to be reasonable if it is five percent (5%) of the monthly rent.

An owner can only charge legal fees when ordered by a court of competent jurisdiction.

 

Does an owner have a right to collect a security deposit?

Yes, at the initial renting of the apartment to the tenant, the owner may collect a security deposit. The amount of a security deposit for rent regulated apartments can be no more than one month's rent. The security deposit must be kept by the owner in an interest bearing account in a NYS bank. See Fact Sheet #9: Renting an Apartment Security Deposits and Other Charges.

 

Is the landlord permitted to collect additional security deposit money at the time of a lease renewal, while a DHCR rent reduction order is in effect?

Yes, except for a rent reduction order that reduces the rent to $1.00 based on the issuance of a municipal agency vacate order, making the apartment not habitable.

 

Are family members protected from eviction when the tenant dies or permanently leaves the apartment? What is the definition of "family member"?

Generally, succession rights are afforded to family members who have resided as a primary resident in the apartment for at least two years (one year for family members who are senior citizens or disabled) prior to the death of, or the permanent vacating of, the apartment by the tenant.

A "family member" is defined as a spouse, son, daughter, stepson, stepdaughter, father, mother, stepfather, stepmother, brother, sister, grandfather, grandmother, grandson, granddaughter, father-in-law, mother-in-law, son-in-law or daughter-in-law of the tenant.

The definition of a family member also includes any other person residing with the tenant in the housing accommodation as a primary resident, who can prove emotional and financial commitment and interdependence between such person and the tenant. See Fact Sheet #30: Succession Rights Protection for Tenants.

 

My building owners did not offer me a timely lease renewal, as they thought that I no longer used the apartment as my primary residence. They did not prove this in court and now they have to offer me a renewal lease. When does it commence and what are my rights?

Renewal leases are required to be offered between 90 and 150 days prior to the expiration of a lease.

In this situation, the owners would offer a renewal lease less than 90 days prior to the expiration of the existing lease. Therefore, the tenant has the option of requesting that the lease be dated to start on (1) the date a renewal lease would have begun had a timely offer been made or (2) on the first rent payment date occurring at least 90 days after the date that the owner does offer the lease to the tenant.

The guideline increase to be charged can never be more than the rate in effect on the date in option (1). Whether the tenant chooses option (1) or (2), the new rent shall not go into effect before the first rent payment date occurring at least 90 days after the offer is made.

 

Is a building owner required to provide a tenant with an itemized bill?

Owners are not required to provide rent stabilized tenants with itemized rent bills.

Owners are required to provide rent controlled tenants with a bill that itemizes the fuel cost adjustment separate from the rent.

 

May an owner collect a lease or maximum collectible rent increase from a tenant when a DHCR rent reduction order for decrease in services is still in effect?

If the rent reduction order was issued to a rent stabilized tenant, the owner cannot collect a renewal lease rent increase from that tenant or a vacancy lease increase from the next tenant, but can calculate the increase in the new lease. The rent that is collected will remain frozen until DHCR issues a rent restoration order.

If the rent reduction order was issued to a rent controlled tenant,  only rent reductions for essential services ( See Policy Statement 90-1) bar the maximum collectible rent from being increased until DHCR issues a rent restoration order. If the rent controlled tenant vacates the apartment, a fair market rent set for the incoming rent stabilized tenant can be charged, but no other rent increases can be collected until DHCR issues a rent restoration order.

 

Are tenants required to pay NYC Sales Tax to the owner on a garage/parking space that is subject to Rent Stabilization?

The NYC Sales Tax can be collected if the tax was actually imposed on the owner for the garage/parking space and the garage/parking space was provided to the tenant in a charge separate from the apartment rent. It can never be calculated on the apartment rent.

 

Fact Sheets

  •  

    Fact Sheet #40: Preferential Rents

    A preferential rent is a rent which an owner agrees to charge that is lower than the legal regulated rent that the owner could lawfully collect. This document explains preferential rent in more detail.

     

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