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I’ve been hearing there are more rent overcharge cases in NYC these days. How do I find out if I’ve been overcharged—and what can I do about it?
There has been an increase in these cases, thanks to greater tenant protections under the new rental laws passed by the State Legislature last year, and if you suspect you’ve been overcharged on rent it’s best to act quickly, says Sam Himmelstein, a lawyer at Himmelstein, McConnell, Gribben, Donoghue & Joseph, who represents residential and commercial tenants, and tenant associations.
“Many tenants are living in apartments they think are not rent-stabilized because they’re paying above a certain amount, or because the landlord gave them a non-stabilized lease. But in many cases, the apartments were illegally deregulated and the tenant is being overcharged,” Himmelstein says.
If you suspect your apartment is supposed to be rent-stabilized—and here are some indicators it should be—your first step is to request the apartment’s rent history from the Division of Homes and Community Renewal (DHCR). Then, bring the history to an attorney who can help you parse the rent increases over the years, and whether they were legitimate.
Some landlords have illegally inflated rent and removed apartments from stabilization through phony vacancy or renewal increases, major capital improvements (changes made throughout the building), or individual apartment improvements (changes made within the unit).
Under the new rent laws, apartments that were lawfully deregulated can remain deregulated, but it is now easier for tenants to challenge an unlawful deregulation.
If a lawyer finds that your apartment should be stabilized and you’ve been paying higher rent than is legal, you can recoup the amount you’ve been overcharged—and then some.
“Under the new law, you can collect overcharges going back six years,” Himmelstein says. “You can also collect treble damages going back six years unless the landlord can prove the overcharge was not willful—before the new rent laws were passed, it used to be limited to two years. Having your attorney’s fees repaid is now mandatory if you win, as well.”
If the landlord can demonstrate that he or she did not intentionally overcharge you, you can’t collect treble damages, but you are entitled to interest on the overcharge at a rate of 9 percent per year.
Another change brought by the new legislation concerns how far back the courts can look into an apartment’s rent history.
“There used to be a four-year rule, which not only limited overcharges, but also limited how far back the court could look at the rental history in determining how to calculate overcharge,” Himmelstein explains. “That has been revised, so the standard now is the court can go back as far as it wants to the last reliable registration, which means they can look at the entire rental history of the apartment.”
However, tenants are still limited to collecting no more than six years of overcharges, regardless of how long they’ve been living in the apartment. It’s a good idea, then, to act quickly if you suspect you should be rent-stabilized.
“If you’ve been in possession of the apartment for more than six years, every month that goes by means you’re losing a month of overcharges,” Himmelstein says. “In order to stop running the statute of limitations, you have to do something.”
Doing something might mean filing a complaint with the DHCR, counterclaiming in an eviction proceeding brought against you in Housing Court, or filing a summons in state Supreme Court. The latter option gives you four months to either settle the case or formally serve a summons and complaint on your landlord.
Himmelstein typically recommends filing with the Supreme Court, and writing a letter to your landlord explaining that you’ve looked at the rent history and found what appears to be an overcharge. Let the landlord know you could settle matters out of court, or go to litigation.
“What I’m finding is some landlords are responding quickly and instantly conceding the apartment is stabilized,” Himmelstein says. “They’re offering to lower the rent to what it should be, and to refund the overcharges and the interest, but asking me not to push on the treble damages.”
Many tenants find this an appealing option; although it means missing out on treble damages, they can also avoid a protracted court case. And there’s often plenty of room to maneuver as far as how much they’re repaid.
“Each case is different because it depends on a lot of factors, like the strength of the case and whether the client wants to litigate or settle,” Himmelstein says. “It leaves a big window for potential settlement.”
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Sam Himmelstein, Esq. represents NYC tenants and tenant associations in disputes over evictions, rent increases, rental conversions, rent stabilization law, lease buyouts, and many other issues. He is a partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph in Manhattan. To submit a question for this column, click here. To ask about a legal consultation, email Sam or call (212) 349-3000.