DHCR Revises Overcharge Form
Shifts Burden of Proof from Landlords to Tenants

By William Rowen

Tenants filing rent-overcharge complaints with the state Division of Housing and Community Renewal now have a much harder way to go.

The agency has abandoned the two-page form for overcharge complaints and fair-market rent appeals that it had used virtually unchanged since the state took over administering rent regulations in 1984. It has been replaced by a long, convoluted six-page form that requires tenants to submit extensive information at the time they file. DHCR has stated that they will no longer accept the old form, except for complaints filed by rent-controlled tenants. The new form presumes that the tenant filing it is rent-stabilized.

The old form, code-named RA-89 (9/93)was entitled Tenant's Complaint of Rent Overcharge and/or Excess Security Deposit. The new form is RA-89 (2/96) and is entitled Tenant's Complaint of Rent and/or Other Specific Overcharges in Rent Stabilized Apartments in New York City.

Where the old form asked the tenant to provide a limited amount of rental information, and to assert the belief that an overcharge had occurred, the new form requires extensive reporting on all rent and lease information, as well as specific allegations regarding the basis and scope of the claim of overcharge. In other words, the tenant who fully fills out the new form will have to have information about the source of the overcharge that very few tenants can reasonably be expected to have.

Burdensome inquiries

A prime example of the new form's anti-tenant bias is the request in Line 15 for the tenant to declare whether the overcharge arises from an MCI rent increase, an individual apartment improvement rent increase, a service-based rent reduction, lack of apartment registration, or other circumstances. DHCR has a history of limiting their investigation into the tenant's complaint of overcharge to the specific item listed in their complaint, instead of performing a complete inquiry into whether the rent is legal. So the new form tempts the tenant into a Catch-22 situation by asking for specificity on Line 15

. Most tenants will try to answer precisely. If the tenant indicates he or she believes the overcharge arose out of an MCI rent increase, for example, then DHCR will likely investigate the MCI area alone and deny the claim even if an overcharge exists based on another area of the rent. First you see an overcharge, now you don't.

In the past, DHCR has assumed during processing of an overcharge complaint that the tenant has actually paid the rent that is listed as the lease rent, unless the landlord claimed that some amounts had never been actually paid. (A tenant is reasonably not entitled to recover an overcharge not actually collected by the landlord.) The new form requires the tenant to assert and ultimately file proofs of all rent payments throughout their tenancy, instead of assuming the rent has been paid or waiting for the landlord to reply and claim non-payment.

Although the new form advises the tenant to "discuss [questions about the overcharge] with the building owner," and, on Line 6, asks if you have done so, there is no actual requirement that the tenant must comply with this suggestion.

Accelerated processing

The new form presents many difficult challenges to tenants who wish to complain about overcharges and reasonably expect the state to investigate their claims. Aside from the shifting of the burden of proof to the tenant, the form contains other limitations on the right to have the legal rent set fairly. (See sidebar on how to deal with the new form.) However, the use of the form does, according to a DHCR spokesperson, offer tenants an opportunity to have their complaints processed in a relatively short time, unlike the current four to six years. DHCR claims that tenants filing with the new form, when all information is provided and the overcharge claim is not complicated by registration gaps, will be processed in "about five months."

The spokesperson further said that the agency would enlarge the overcharge staff at its offices at Gertz Plaza in Jamaica, Queens by shifting over 10 employees from the MCI unit. One-third of the overcharge unit's staff will work processing the new filings while the other two-thirds process the agency's backlog.

Similar inquiry form

DHCR has also issued a "wake-up" or "churning" form that is extremely similar to the new overcharge form. Met Council's Tenant/Inquilino reported and issued a warning on the "wake-up" process in last month's issue on page 4. We reported that tenants who ignore the Request for Additional Information -- Initial Case Processing, Form RA-89N (2/96) are at high risk of having their cases closed as having been abandoned. Tenants should respond to the form immediately and fully. The advice in the sidebar applies to the "wake-up" request as well, but the form's paragraph numbers are not the same as the new overcharge form.

If a tenant receives the form and has a representative, the tenant should not assume that a copy of the form has been sent to the representative. A anonymous source in the agency warned that the rent examiners frequently feel no obligation to send out duplicate notices, especially since rent examiners know well that DHCR's goal in sending out the wake-up forms is to close as many cases as possible.

Fewer rollbacks mean higher rents

The new form will discourage tenants from filing because it will require them to gather all their papers together before they file, instead of filing first and sending in proofs later upon DHCR requests.

An agency spokesperson said that incomplete forms would be returned with a request to the tenant to complete them, and that the agency will deem the first filing as the official filing date. Timely filing is an issue because the statute of limitations that requires tenants, according to DHCR's interpretation of the law, to file within four to five years of an overcharge commencing or lose the right to challenge the rent forever.

Despite a few advantages in the new form for tenants, DHCR has essentially front-loaded the overcharge complaint process against tenants by shifting the burden of proof away from landlords and requiring tenants to submit vast information and proofs when they file. This is in direct accord with the Pataki Administration's stated goal of lifting the regulatory burden from business. The Governor has not stated that he would shift it to tenants, although his anti-tenant stance leaves it as no surprise. This shift will inevitably result in fewer findings of overcharge, and ultimately an increase in landlords willing to lawlessly charge higher rents.

Met Council will prepare an information sheet suggesting methods of overcoming the anti-tenant aspects of the new form in the near future.