Court Mistakenly Awarded Tenant Quadruple Damages for Rent Overcharge

Tenant sued landlord, claiming improper apartment deregulation and rent overcharge. The trial court ruled for tenant and directed landlord to refund $169,000 including triple damages.

Landlord appealed and won in part. The trial court properly found that landlord failed to prove that the claimed scope of individual apartment improvements (IAIs) increased the rent to exceed the high-rent deregulation threshold for the apartment. Landlord didn't show how the total cost of its renovation project was apportioned among three apartments, including tenant's unit. Some testimony suggested that costs were divided evenly among the three apartments. But this testimony was contradicted by evidence that the work performed differed in the three apartments. Landlord also conceded that the unsigned construction contract for work at the three apartments was a boilerplate instrument that listed renovations that weren't necessarily completed. 

Ultimately, the apartment remained rent stabilized. Landlord's itemized invoices and cancelled checks showed that it spent enough to warrant an IAI rent increase for $139.50. When added to the prior tenant's rent, along with a vacancy increase, the maximum possible legal rent was $1,984. This was below the $2,500 vacancy deregulation threshold in effect at the time. Tenant's rent also was frozen until such time as it was properly registered with the DHCR. However, landlord correctly pointed out that the court had awarded tenant a refund that included quadruple damages rather than triple damages. The total overcharge was $126,900.

Ruggerino v. Prince Holdings 2012, LLC: Index No. 156640/16, App. No. 3789-3790, Case No. 2022-04255, 2025 NY Slip Op 01180 (App. Div. 1 Dept.; 2/27/25; Manzanet-Daniels, JP, Kennedy, Gonzalez, Rosado, Michael, JJ)