New York State
Division of Housing and Community Renewal
Office of Rent Administration
Gertz Plaza, 92-31 Union Hall St.
Jamaica, New York 11433
Public Information: (718)739-6400


POLICY STATEMENT 89-2

APPLICATION OF THE TREBLE DAMAGE PENALTY

This policy statement is being issued to clarify DHCR's position
on the application of treble damages upon the finding of a rent
overcharge pursuant to the Rent Stabilization Law (RSL).

Section 26-516 a of the Rent Stabilization Law, as amended by the
Omnibus Housing Act of 1983, provides that any owner who is found
to have collected an overcharge "...shall be liable to the tenant
for a penalty equal to three times the amount of the overcharge.
If the owner establishes by a preponderance of the evidence that
the overcharge was not willful, the...(DHCR)... shall establish
the penalty as the amount of the overcharge plus interest."

Section 25-516 a(2) (i) of the RSL limits the imposition of
treble damages to no more than two years before the filing of the
complaint and denies treble damages to any overcharge occurring
prior to April 1, 1984.

PRE-APRIL 1, 1984 OVERCHARGES

Section 26-516 a(2) (i) precludes the imposition of treble
damages to any overcharge occurring prior to April 1, 1984.
Nevertheless, it is DHCR policy to apply the penalty to
overcharges occurring on or after April 1, 1984 even though the
tenant's complaint of rent overcharge has been filed prior to
April 1, 1984.

In order to obviate any "due process" objections by owners to the
effect that when the overcharge complaint was filed the treble
damage section had not yet gone into effect so that the owner was
unaware of the potential treble damage penalty, it is DHCR's
policy to notify such owners prior to the issuance of the order
that if an overcharge were determined pursuant to that complaint,
they would be liable for treble damages for overcharges occurring
on or after April 1, 1984. The owner may submit evidence that the
overcharge was not willful. The assessment of this evidence by
DHCR s described more fully below.

It is also DHCR policy that where such an owner did not receive
such prior notice, upon the owner raising the no-notice issue at
PAR, the Rent Administrator's order, to the extent that it
imposes treble damages. shall be set aside.

POST APRIL 1, 1984 OVERCHARGES

The RSL assesses treble damages where the overcharge is
"willful". The statute, in fact, creates a presumption of
willfulness subject to rebuttal by the owner showing non-
willfulness of the overcharge by a preponderance of the evidence.
In the absence of such affirmative proof by the owner or after
the submission of inadequate proof, DHCR staff, shall assess
treble damages where a determination of overcharge is made.

The owner must prove by a preponderance of the evidence that the
overcharge was not a willful act. This simply means that where an
owner submits no evidence or where the evidence is equally
balanced, the overcharge is deemed to be willful. The owner can
submit such evidence after receiving notice of a tenant's filing
of an overcharge complaint prior to the final order being issued.
When an owner receives the second and final notice that an
overcharge has been determined and treble damages are about to be
imposed, he or she will be notified to submit evidence within
twenty days to prove that the overcharge was not willful.

DHCR has determined that the burden of proof in establishing lack
of willfulness shall be deemed to have been met and, therefore,
the treble damage penalty is not applicable, in some situations,
where it is apparent or where it is demonstrated that an
overcharge occurred under certain specified circumstances.
Examples of such circumstances are as follows:

1. Purchase of a building at a judicial or bankruptcy sale,
   where complete prior rent records are not available.

2. Where an owner adjusts the rent on his or her own within the
   time afforded to interpose an answer to the proceeding and
   submits proof to the DHCR that he or she has tendered, in good
   faith, to the tenant a full refund of all excess rent
   collected, plus interest.

3. Where the owner erroneously charges a "first rent" because
   the owner, after performing extensive renovations, in good
   faith, believes that he or she has effectuated a substantial
   rehabilitation other than one qualifying for an exemption from
   Rent Stabilization) qualifying for a "first rent".

4. Where the overcharge is caused by the hypertechnical nature
   of the rent computation, provided that

   - an owner who continues making the same technical error
     after an order correcting such error has been issued by the
     DHCR, will not be excused from treble damages when DHCR
     determines an overcharge by such owner upon a subsequent
     complaint.

   - an owner who miscalculates a renewal lease increase after
     May 1, 1988, the date on which DHCR's Notice of Lease
     Renewal Form (RTP-8) went into effect in New York City, will
     not be excused from treble damages when DHCR determines an
     overcharge upon a complaint filed by a tenant which involves
     a renewal lease commencing on or after October 1, 1988. The
     RTP-8 shows the proper method for computing lease renewal
     increases.

Typical, hypertechnical computation errors include:

a. Where the owner erroneously included the 2.2% increase
   in a 421-a building in the base rent on or after
   November 19, 1982;

b. Where an owner charges a 2.2% increase in a 421-a
   building for the tenth year of the tax exemption schedule;

c. Where the owner "piggy-backed" guidelines increases
   within the same guidelines year;

d. Where the rent guidelines increases were computed on the
   September 30th rent plus a "supplementary adjustment", a rent
   increase for new equipment installed or an MCI increase which
   became effective after September 30th, instead of first
   calculating the guidelines increases and then adding on the
   other charges.


February 27, 1989

Elliot G. Sander
Deputy Commissioner


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DHCR Policy Statements are **promulgated** (i.e., officially
issued) by the New York State Division of Housing and Community
Renewal (DHCR) and represent **official** policy of the agency.

The agency is generally obligated to follow the policy contained
in these and other documents or provide a rational for deviation;
failure to follow the law, policy or practice may form the basis
for an appeal. Electronic versions of the 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 is advised to obtain true copies of
these documents from DHCR. Also see DHCR Advisory Opinions,
DHCR Operational Bulletins, the Rent Stabilization Code, the Rent
Stabilization Law and various Rent Control Statutes.

Every attempt has been made to conform to the original Policy
Statements 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.
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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
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