A recent decision of the Appellate Division, First Department has reiterated the long-standing rule that when a landlord overcharges a tenant that the tenant will be entitled to an award of treble damages unless the landlord can overcome the overwhelming presumption that all overcharges are willful. This decision is a resounding victory for tenants who find themselves with a landlord who refuses to accept an adverse determination.
NYC Landlord Illegally Overcharges Tenant for 30 Months After Trial
In Delaj v. Bronx Park East Housing, N.Y. Slip Op. 03598 (1st Dept. 2014), a tenant had sued the landlord for rent overcharge and for a determination of the correct legal rent. After issue was joined the tenant moved for summary judgment in its favor seeking a determination that the legal rent stabilized rent should be dramatically reduced and that the landlord was responsible to the tenant for a substantial sum of money. Summary judgment was awarded to the tenants and the trial judge determined that the rent was reduced. Amazingly, the landlord while appealing the adverse decision, continued to charge the higher illegal rent. For 30 months the tenant continued to pay the illegal rent. Finally, the landlord’s appeal was dismissed and the tenant moved the trial judge for a money judgment for the amount that the landlord collected that exceeded the legal rent for the 30 months post-judgment. In seeking that money judgment the tenant sought a statutory award of treble damages. The trial judge awarded the tenant a money judgment for the amount that the tenant had been overcharged but failed to award the tenant treble damages.
Price Law Firm Sets Precedent Winning Treble Damages for Tenant
The Price Law Firm appealed on behalf of the tenant and the Appellate Division reversed the trial judge. The tenant was awarded treble damages. In reversing, the Appellate Division held:
“Defendant made no effort to rebut the presumption of willfulness arising from the finding that it overcharged plaintiffs for rent during the 30 months ending July 31, 2012 (see Rent Stabilization Law of 1969 [Administrative Code of City of NY] § 26-516[a] see e.g. Matter of 10th St. Assoc., LLC v New York State Div. of Hous. & Community Renewal, 110 AD3d 605, 605 [1st Dept 2013]). Indeed, defendant did not deny that it continued to overcharge plaintiffs after a prior court order had determined the correct legal rent.”
The tenant will now receive a much larger judgment. Future tenants can rely upon this precedent as standing for the proposition that when a landlord continues to fight an adverse determination lowering a rent that the tenant who continues to pay the higher rent will receive treble damages when the lower rent is upheld.