DHCR Finds No Fraud in Overcharge Case

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant, finding a total overcharge of $8,328, including triple damages. No refund was ordered because landlord had already given tenant a rent credit for any overcharge. Tenant appealed, claiming fraud by the landlord. He claimed that the DRA should have used the default formula and found a greater overcharge. Tenant's initial 2007 lease stated that the apartment wasn't rent stabilized and didn't include a rent stabilization rider. Tenant also claimed that apartment registrations were inconsistent.

Citing the guidelines set by New York's highest court in Grimm v. DHCR and Boyd v. DHCR, the DHCR found insufficient evidence in this case to create a colorable claim of fraud. There was no proof that landlord was attempting to fraudulently deregulate the apartment. There was no proof of fraudulent rent ledgers, and the DRA properly relied on landlord's ledger to determine the base date rent of $626 paid by prior tenant. Landlord also had registered this amount as prior tenant's last rent. Although landlord filed annual DHCR registrations under two different building ID numbers, this was because the building was known by two addresses and there were no inconsistencies in the two sets of apartment registrations. There was no indication that landlord was trying to establish a higher legal rent for the apartment or categorize the rents charged to tenant and prior tenant as preferential rents. The rents charged also were below $2,000, indicating there was no scheme to secure higher rents in order to deregulate tenant's apartment. The fact that landlord told tenant in 2007 that the apartment wasn't rent stabilized wasn't evidence of fraud. Tenant's vacancy lease was silent as to whether the apartment was rent stabilized, and landlord gave tenant a rent-stabilized renewal lease. The fact that tenant's apartment wasn't registered with the DHCR in various years between 2003 and 2010 also was insufficient to prove fraud. The registered apartment rent both before and after these dates was always below $2,000. There was no proof that landlord's rent ledgers were fraudulent. And the fact that tenant claimed that he signed his vacancy and renewal leases under duress had no effect on the legal regulated rent. 

Dixon/Greater Harlem Housing Development Corp.: DHCR Adm. Rev. Docket Nos. AU410029RT, AW410026RO (8/20/14) [7-pg. doc.]