Court Finds It Can Decide Rent Overcharge Questions Despite Pending DHCR Complaint

Landlord sued to evict tenant after serving a tenancy termination notice. Landlord claimed that, although the building was rent stabilized, tenant's apartment was exempt from rent stabilization due to high-rent vacancy decontrol. Tenant claimed as a defense and counterclaim that the apartment was unlawfully deregulated and that he'd been overcharged. Landlord asked the court to dismiss the defense and counterclaim as meritless and because these duplicated claims were made in a pending rent overcharge complaint tenant had filed with the DHCR. In response, tenant asked the court to stay the eviction proceeding pending resolution of the DHCR proceeding.

The court ruled for landlord in part. The court denied landlord's request to dismiss tenant's affirmative defenses. But the court also denied tenant's request to stay the eviction proceeding pending the DHCR's determination of their rent overcharge complaint. While the proceeding currently before the DHCR involved some of the same factual issues as those pertaining to landlord's compliance with the Rent Stabilization Law, the protracted nature of the DHCR proceeding made it inappropriate to defer to the DHCR and wait for its decision. The court found it had jurisdiction to decide whether tenant's apartment was lawfully removed from rent stabilization. And, unlike another case where an appellate court upheld a stay of an eviction proceeding pending a DHCR determination on deregulation and overcharge issues, in this case landlord had demonstrated a likelihood of success on the merits of tenant's improper deregulation claim.

INK 954 LLC v. Mann: Index No. L&T 306804/23, 2023 NY Slip Op 51437(U)(Civ. Ct. Queens; 12/27/23; Schiff, J)