DHCR FACT SHEET #16 Division of Housing and Community Renewal COLLECTING OWNER'S OVERCHARGE IN RENT STABILIZED NYC APARTMENTS The NYC Rent Stabilization Law provides two methods for tenants to collect rent overcharge penalties from an owner. A tenant can begin one of these actions after the NYS Division of Housing and Community Renewal (DHCR) determines that the owner is subject to a penalty for overcharging and the Rent Administrator has issued an order to that effect. The penalty in a rent overcharge is the amount an owner collected above the legal regulated rent plus accrued interest, or in the event of willful overcharge, the penalty equals three times the amount of the overcharge. A tenant can choose one, but not both, of these methods. 1. Offset Method The tenant may deduct 20% of the penalty from the monthly rent until they recover the overcharge. However, if 20% of the penalty exceeds the tenant's monthly rent, the tenant may not pay any rent until they recover the full amount of the refund due. However, before exercising this option, the overcharged tenant must wait 35 days from the issuance of the Rent Administrator's order. During this period, any party to the order may tile a Petition for Administrative Review DHCR form RAR-2] challenging the correctness of the order. The timely filing of a PAR by the owner will prevent the tenant from offsetting any rent overcharges and penalties until the Commissioner rules on the PAR, or an Article 78 court proceeding (Civil Practice Law and Rules) makes a final determination of the PAR overcharges and penalties. The timely filing of a PAR against the Rent Administrator's overcharge determination does not affect that part of the order adjusting the tenant's legal regulated rent. Therefore, unless the Commissioner specifically authorized otherwise, the tenant may begin to pay the lower rent effective the rent payment date following the issuance of the order. 2. Judgment Method The filing of a judgment creates a lien against the owner's real property, and 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. After the 35 day PAR filing period expires, the tenant should tile a Notice to Rent Stabilized Tenant Concerning Payment of Penalties which Landlord has been directed to pay by an Administrator's Order [DHCR form RN-14] along with the Judgment [DHCR form RN14.1]. Both are included with the overcharge order. The tenant must first send this form to the DHCR Docketing/Screening Section at 92-31 Union Hall Street, Jamaica, NY, 11433. DHCR will then certify that the owner has not initiated a PAR or instituted a proceeding for judicial review, or, if instituted, these proceedings have concluded. Upon such certification, the tenant must fill out the affidavit contained in the DHCR form RN-14 stating that they have not OFFSET against the rent any part of the penalty. (Method 1 above). The tenant must file the forms and a certified copy of the overcharge order with the County Clerk's office in the County where the property is located. The County Clerk's Office will docket the judgment when they receive the papers. The refund of any overcharge, including penalties, collected on or after April 1, 1984 is the obligation of the present owner. for complaints filed and overcharges collected before April 1, 1984, refunds and penalties are the obligation of the owner who collected the overcharge. ------------------------------------------------------------ DHCR Fact Sheets (series of thirty) are issued by the New York State Division of Housing and Community Renewal (DHCR) as plain- english informational publications. For official agency policies, see DHCR Policy Statements, Advisory Opinions and Operational Bulletins. Also refer to the Rent Stabilization Code, the Rent Stabilization Law and various Rent Control Statutes. Electronic versions of these documents on TenantNet are for informational purposes only and there is no guarantee they will be accepted by any court (or even DHCR) as true copies of DHCR policy. The reader may obtain true copies of these documents from DHCR. Every attempt has been made to conform to the original Fact Sheets as issued by DHCR; TenantNet makes no representation the enclosed material is current or will be applied as written. The reader is advised that DHCR often fails to properly apply, interpret or enforce housing laws. Since housing laws are complex and often contradictory, it is recommended the reader obtain competent legal advice from a tenant attorney or counseling from a tenant association or community group. (rev. 3/13/96) DHCR documents are public documents; the electronic version of such documents have been developed by TenantNet and any added value, enhancements and/or proprietary features are copyright 1994, 1995 and 1996 by TenantNet. These documents may be freely distributed provided they remain intact as herein presented, including this and the top informational banner referencing TenantNet as the original provider. ------------------------------------------------------------ For more information or assistance, call the DHCR Rent Infoline at (718) 739-6400, or visit your Borough Rent Office. Queens Central Office 92-31 Union Hall St. 4th Fl. Jamaica, NY 11433 (718) 739-6400 Bronx One Fordham Plaza Bronx, NY 10458 (718) 563-5678 Brooklyn 250 Schermerhorn St. 3rd Floor Brooklyn, NY 11201 (718) 780-9246 Lower Manhattan 156 William Street 9th Floor NY, NY 10038 (212) 240-6011, 6012 South side of 110th St. and below Upper Manhattan 163 W. 125th St. 5th Floor NY, NY 10027 (212) 961-8930 North side of 110th St. and above Staten Island 350 St. Mark's Place Room 105 Staten island, NY 10301 (718) 816-0277 Nassau County District Rent Office 50 Clinton Street, 6th Floor Hempstead, NY 11550 (516) 481-9494 Westchester County District Rent Office 55 Church Street, 3rd Floor White Plains, NY 10601 (914) 948-4434 Rockland County District Rent Office 94-96 North Main St. Spring Valley, NY 10977 (914) 425-6575 Albany Regional Office 119 Washington Avenue Albany, NY 12210 (518) 432-0596 Buffalo Regional Office Ellicot Square Building 295 Main St., Room 438 Buffalo, NY 14203 (716) 856-1382 ------------------------------------------------------------