Appeals Court Upholds DHCR's Dismissal of Tenant's Rent Overcharge Complaint

Rent-stabilized tenant complained to the DHCR of rent overcharge. The DHCR ruled against tenant, who filed an Article 78 court appeal and lost. The court and appeals court didn't find that the DHCR's ruling was arbitrary or capricious. The DHCR decision didn't fail to consider alleged indicia of a fraudulent scheme to deregulate the apartment. The DHCR instead extensively considered the rental history beyond the four-year lookback period, including the entire history of registration filings and the rent increases between 2009 and 2013 registrations.  And there was proof to support the DHCR's finding that landlord performed significant individual apartment improvements (IAIs) in 2010, including invoices, cancelled checks, a DOB permit for the work, and DOB's acknowledgment of completion. There also was proof before the DHCR that a prior tenant lived in the unit for 19 years. The record also supported the DHCR's conclusion that landlord's failure to register the apartment between 2014 and 2017 didn't show a fraudulent scheme to deregulate. Landlord corrected this error by retroactively reducing tenant's rent to match his initial rent and filing late registrations. This effectively froze the rent. And failure to register and retroactive registrations had no bearing on the reliability of the base date rent.

Gassana v. DHCR: Index No. 453875/21, App. No. 2130, Case No. 2023, 03895, 2024 NY Slip Op 02254 (App. Div. 1 Dept.; 4/25/24; Webber, JP, Friedman, Gonzalez, Rosado, JJ)