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When Does 'Voluntary Payment' Preclude Recovery of Overcharges?
When a tenant erroneously pays more rent than a lease requires, can the tenant recover the amount of the excess payments? Answering that question requires exploration of the perplexing voluntary payment doctrine, which continues to rear its head in New York cases.
The Problem
Suppose a lease requires a tenant to pay rent, but obligates the landlord to provide heat without charge to the tenant. The landlord then sends monthly invoices to the tenant, itemizing the rent reserved under the lease, with an additional charge for heat. If the tenant pays the rent only, but not the charge for heat, the landlord will not be entitled to collect for the heat, because the lease itself makes it clear that the tenant is not obligated to pay for it. But suppose the tenant pays the full amount of the invoice, and later seeks to recover the amounts it has erroneously paid to the landlord. Should the lease control here as well, permitting tenant to recover? The voluntary payment doctrine, applied by New York courts in a number of leading cases, suggests that the answer is “no.”
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