George E. Pataki, Governor         Joseph H. Holland, Commissioner

                   A publication of New York State
               Division of Housing and Community Renewal
                      Office of Rent Administration

               Fact Sheet #16 - Collecting Overcharges in
               Rent Stabilized Apartments in New York City
                             [Revised 2/96]

    The Rent Stabilization Law provides two alternate methods for a tenant to
collect rent overcharge penalties from an owner.  A tenant may begin to use
either one of these methods only after the New York State Division of Housing
and Community Renewal (DHCR) issues a final order establishing the legal
regulated rent and determining a penalty.

    The penalty for a rent overcharge is the amount an owner collected above
the legal regulated rent, plus accrued interest. For a complaint filed on or after
April 1, 1984,  in the event of a willful overcharge, the penalty equals three
times the amount of the overcharge for two years prior to the filing of the
complaint.

    A final order is a Rent Administrator's order which is not challenged
administratively by the filing of a timely Petition for Administrative Review
(PAR) with DHCR, or, if challenged, the order issued by the Commissioner
determining the PAR.

    The filing of a PAR within 35 days of the Rent Administrator's order by
the owner or tenant will prevent the tenant from collecting the penalty
awarded until the Commissioner rules on the PAR.  Following the issuance of
the PAR order, an aggrieved party may commence an Article 78 (Civil Practice
Law and Rules) court proceeding which will similarly delay the tenant's
ability to file the order as a judgment (see Method #2 below) until a final
determination is reached by the court.

    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 issues
a "stay order" delaying the adjustment to the rent, the tenant may begin to
pay the lower rent effective on the first rent payment date following the
issuance of the order even if the owner files a PAR.

    After the 35 days for filing of the PAR have expired, and if neither the
owner nor the tenant has filed a PAR, the tenant can collect the rent
overcharge penalty. The tenant must choose only one of the two alternate
methods described below:

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.
As noted above, during this period, any party aggrieved by the order may file
a PAR (DHCR Form RAR-2) challenging the correctness of the 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.

    After the 35 day PAR filing period expires without the filing of a PAR or
60 days after the determination of the PAR affirming an overcharge award and
if no court challenge is commenced within those 60 days, the tenant will be
required to file with the County Clerk 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) and the Judgment Form (DHCR Form RN-
14.1).  Before the tenant may file these forms with the County Clerk, the
tenant must first send the Notice (Form RN-14) to DHCR's Overcharge Case
Intake Section at Gertz Plaza, 92-31 Union Hall Street, Jamaica, New York,
11433. The tenant should not send to DHCR the Judgment Form (Form RN-14.1).
DHCR will certify that the owner has not filed a PAR or a proceeding for
judicial review, or, if filed, that those proceedings have concluded.  DHCR
will return to the tenant the completed Notice (Form RN-14) with a certified
copy of the Rent Administrator's order, and if applicable, a certified copy of
the PAR order. The tenant must then complete the affidavit contained in the
Notice (Form RN-14) stating that no portion of the overcharge penalty has been
OFFSET against the monthly rent (Method #1 above).

    The tenant then files the Notice, the Judgment Form and a certified copy
of the overcharge order with the County Clerk's office in the county in which
the property is located. The County Clerk's office will then docket the
judgment.

    While prior owners who collected overcharges are jointly and severally
liable for the overcharges they collected, the refund of any overcharge,
including penalties collected on or after April 1, 1984 is the obligation of
the current owner except in certain limited cases, primarily involving
judicial sales. In those limited cases, prior owners are solely liable for
overcharges actually collected by them. For complaints filed and overcharges
collected before April 1, 1984, refunds and penalties are the obligation of
the owner who collected the overcharge.

For more information or assistance, call the DHCR Rent InfoLine,
(718) 739-6400, or visit your Borough Rent Office.

Central
92-31 Union Hall Street
4th Floor
Jamaica, NY 11433
(718) 739-6400

Brooklyn
250 Schermerhorn Street
3rd Floor
Brooklyn, NY 11201

Upper Manhattan
163 W. 125th Street
5th Floor
New York, NY 10027
North side of 110th St. and above

Nassau County
50 Clinton Street
6th Floor
Hempstead, NY 11550

Westchester County
55 Church Street
White Plains, NY 10601

Lower Manhattan
156 William Street
9th Floor
New York, NY 10038
South side of 110th St. and below

Bronx
1 Fordham Plaza
2nd Floor
Bronx, NY 10458

Staten Island
60 Bay Street
7th Floor
Staten Island, NY 10301

Rockland County
94-96 North Main Street
Spring Valley, NY 10977



TenantNet Home | TenantNet Forum | New York Tenant Information
DHCR Information | DHCR Decisions | Housing Court Decisions | New York Rent Laws
Disclaimer | Privacy Policy | Contact Us

Subscribe to our Mailing List!
Your Email      Full Name