Rent-stabilization overcharging under SCRIE/DRIE benefits

[JeanJean]

Hello,

I am a young French professional living in NYC since October and I'd really appreciate any help you can provide on this issue ! I am discovering the U.S and NY state regulations and I don't have any law background, so I'll try to be as clear as possible - sorry if it is not the case.

BACKGROUND :
I am living as a roommate with the legal tenant in a 2bd apartment and I am paying a monthly $1,400 rent. I recently found out that the apartment was rent-stabilized and my roommate (the legal tenant, she's not the landlord) did everything to hide it, but she finally confirmed it to me.

Since it is a rent stabilized apartment, I told her that under NYCRR § 2525.7 Regulation, she was not allowed to charge me more than 50% of the rent she is paying to the landlord and I've asked her to see her lease to make sure it was not the case. ("§ 2525.7 Occupancy by persons other than tenant of record or tenant's immediate family" - http://tenant.net/Rent_Laws/rsc/rsc2525.html)

She first refused to show me the lease but then I've warned her that I could file a RA-89 Form (http://www.nyshcr.org/Forms/Rent/ra89.pdf) for being suspicious of rent overcharging and that I'll eventually know the truth although it was her right not to show me her lease. She got back to me the day after with her lease...that was obviously a forgery where the rent amounts where carelessly Photoshopped up to $3,500 monthly. I took a photo of this forgery to keep a proof and ask her to show me the actual lease, not the forgery. She was very destabilized that I've noticed the forgery and eventually gave me her actual lease. It appears that the actual monthly rent is $1,950 but she has a social SCRIE/DRIE benefit that is explicitly mentioned on the lease, so she is actually charged $1,300 monthly.

Thus, my questions are the following:

1) Under § 2525.7 law, SCRIE/DRIE benefits are not explicitly mentioned, so what rent should be taken into account for the "50%" rule? Is it the "gross" rent of $1,950 of the "actual" rent of $1.300?
Do you know about any precedent/similar case already judged?

2) Even by considering the "gross" rent of $1,950, I am still paying 72% of the total rent (108% if we consider the actual rent…) which is illegal. What are in my powers if she refuses to get my rent capped at 50%?

3) She lied to me several times and eventually showed me a forgery lease in order to mislead me on the financial aspect of the rent. What can I do from a legal perspective against her? How would you estimate the prejudice? In Court, would I have to present the physical forgery document that she showed me or does the photo I’ve taken would be enough as a proof? I am sure she already destroyed this false document and will deny this fact in front of the judge.

4) She is eventually arguing about the utilities such as electricity/internet and the furnitures to justify the "overcharge". Is there a legal aspect that i may have missed on this point ?

I know this is a pretty extensive post so thank you very much for your time and help !

[TenantNet]

Yes, you're correct, RS tenants are not supposed to be charging more than 50% to roommates (if they have only one roommate). This does not include utilities.

This is addressed here: https://goo.gl/doPWxO ... and other places as well. A prime tenant who charges more is exposed for overcharge claims, treble damages and even possible eviction of the LL discovers the windfall.

I found a lot of references by just googling "DHCR roommates 50%"

DHCR says this: http://www.nyshcr.org/rent/faqs.htm#ol18

Of course it helps to know the real legal rent. If a tenant refuses to show you, it might be because he/she is hiding that reality. I don't think DHCR will release the rent history unless you're on the lease. But it appears you now know the legal rent (was it for the current year?).

As you also probably know, senior/disabled tenants may apply for SCRIE or DRIE, that freezes the rent at the amount it was when the application was made. So while the legal rent may continue to go up, the tenant pays only the frozen amount; the difference is made-up to the LL by tax abatements.

I would think that SCRIE would like to know that the tenant is actually pocketing a huge amount of the rent bill, and is essentially living rent free. Chances are the tenant did not report this to SCRIE.

So what is your goal here: to get your rent reduced (and presumably) a refund of overcharges for what you've already paid? If you've paid $1,400 and 50% of the rent being paid by the tenant is $650, that's an overcharge of $750 per month. Legally the tenant might also be liable for treble damages (up to two years), so that can increase the exposure. (however in reality DHCR rarely imposes treble damages any more).

Or do you want to inflict maximum damage to the tenant? That might involve getting the LL involved and might result in the tenant being evicted. But also you might lose the place as well.

It's also possible that even with the exposure the tenant might try to force you out, legally or not. If that happens research "illegal evictions."

So think through what you want to do. I think the best resolution for both of you is for the tenant to refund all overcharges and skip DHCR or litigation. The latter is something you can do, but for now negotiation might get it all done quicker. Yes, it appears the tenant is a POS (very loose translation "morceau de merde bâtard gluant.") But you want a resolution, correct? as opposed to years of litigation. N'est pas?

At this point don't worry how you present a court case. Just make sure she knows she really screwed up and has high exposure, that you can make life really difficult for her. You can file with DHCR, you can go to the landlord, you can go to SCRIE.

I do not know how SCRIE is factored in with the 50% rule, but I would think it means 50% of the payable rent. Here's one source https://goo.gl/VNr8lf - see page 4, bottom. Is the tenant reporting your $1400 as income? That might have the effect of her losing SCRIE. I would ask DHCR this question.