Court Won't Reopen Overcharge Case for DHCR to Apply HSTPA Changes

Rent-stabilized tenant complained of rent overcharge. She was the first tenant to occupy the apartment, which was rent-stabilized solely due to the building's receipt of J-51 tax benefits. The initial legal regulated rent charged was $2,300 per month. Tenant claimed that landlord illegally designated that amount as a preferential rent and improperly claimed a higher amount as the legal regulated rent. Tenant also argued that landlord never issued a J-51 rider with her lease, so her stabilized status was preserved until she moved out. Tenant also claimed landlord failed to file timely and proper rent registrations and that landlord engaged in fraud.

The DRA ruled for tenant in part, finding an overcharge of $1,156. Landlord had already refunded $24,000 to tenant. The $2,300 rent first paid by tenant became the initial legal regulated rent and couldn't be deemed a preferential rent. The DRA imposed no rent freeze since any missing registrations occurred outside the four-year lookback period.

Tenant appealed, and the DHCR denied her PAR. Tenant then filed an Article 78 court appeal, which the court denied on June 21, 2019. Tenant then sought to renew her Article 78 appeal because HSTPA made extensive changes to the Rent Stabilization Law's rent overcharge liability provisions effective June 14, 2019. These changes applied to cases pending on June 14, 2019.

The court dismissed tenant's request on May 14, 2020. The court pointed out that, on April 2, 2020, New York's highest court ruled in Regina Metropolitan Co., LLC v. DHCR that HSTPA's application of the changes tenant relied on to cases pending on June 14, 2019, was improper and denied landlords due process of law.  So, sending the case back to the DHCR for a new review of tenant's claims under HSTPA would be an impermissible retroactive application of the new law.

Bowlus v. DHCR: Index No. 515369/18, 2020 NY Slip Op 31396(U)(Sup. Ct. Kings; 5/14/20; Toussaint, J)