Court Dismisses Tenants' Claim of Fraudulent Rent Overcharge

Landlord sued rent-stabilized tenants in State Supreme Court, seeking recovery of $59,000 in back rent now owed since tenants stopped paying rent in March 2020. Tenants responded with claims of rent overcharge. They said that landlord improperly charged them a vacancy increase in 1993 when they took over a family member's lease, and that landlord improperly discontinued a preferential rent for the apartment. Tenants claimed that the court should look back more than six years due to fraud by the landlord.

The court granted landlord's request to dismiss tenants' overcharge claims. The six-year lookback period for this case extended back only to Jan. 21, 2016. Tenants failed to raise an issue of fact that landlord engaged in any fraudulent actions. "The inflation of the legal regulated rent set forth on the publicly filed registration statements was evident from the registration statements themselves, negating the element of reliance as a matter of law." Here, landlord accurately reflected the rent increases in both the leases it provided to tenants and in the DHCR rent registrations. These clearly show that the preferential rent was revoked in 2008. As to a 2001 rent increase, this also was accurately documented in the DHCR rent registrations. Tenants also submitted no affidavit stating their fraud claim and relied instead only upon a statement by their attorney, who was not a party with personal knowledge.

310 E. 74 LLC v. Mirea: Index No. 657182/2021, 2023 NY Slip Op 32226(U)(Sup. Ct. NY; 6/29/23, Bluth, J)