Court to Calculate Rent Overcharge Using Default Method Due to Fraud

March 27, 2025

LVT Number: #33602

Rent-stabilized tenant sued landlord for rent overcharge, claiming fraud by landlord. The court ruled for tenant. The last rent charged to prior tenant was $1,044.52 per month and landlord then charged tenant $1,500 per month. Tenant's initial lease didn't contain a rent stabilization rider. The overcharge was based on rent history prior to the 2019 HSTPA amendments, which generally would call for application of a four-year lookback period. But further rent history review was permitted where there was evidence of a fraudulent scheme to deregulate an apartment.

Rent-stabilized tenant sued landlord for rent overcharge, claiming fraud by landlord. The court ruled for tenant. The last rent charged to prior tenant was $1,044.52 per month and landlord then charged tenant $1,500 per month. Tenant's initial lease didn't contain a rent stabilization rider. The overcharge was based on rent history prior to the 2019 HSTPA amendments, which generally would call for application of a four-year lookback period. But further rent history review was permitted where there was evidence of a fraudulent scheme to deregulate an apartment. Legislation passed in 2023 also retroactively redefined fraud to eliminate common law fraud from the calculation of fraudulent overcharges stemming from fraudulent deregulation and to apply a "totality of the circumstances" test.

The court found that tenant demonstrated fraud by showing she wasn't given a rent-stabilized lease, that the building was rent stabilized, and that her initial rent was based on an unlawful rent increase. The case was set down for a hearing to calculate the overcharge damages.

 

 

 

 

 

Guerrera v. Lincoln 1188 Realty, LLC: Index No. 519984/2021, 2025 NY Slip Op 30722(U)(Sup. Ct. Kings; 3/3/25; Velasquez, J)

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