DHCR Incorrectly Ruled Collusion with Landlord Required to Find Illusory Tenancy

Subtenant complained to the DHCR of rent overcharge and illusory tenancy. She moved into the apartment in 2006 and signed a lease with someone she thought was the building owner. But that person turned out to be the daughter of subtenant's roommate. The DHCR ruled for subtenant in part, finding a rent overcharge but no illusory tenancy because there was no proof of collusion between apartment tenant and landlord. Subtenant then filed an Article 78 appeal, and the DHCR asked to take the case back for reconsideration. The court ruled for the DHCR. The DHCR's PAR decision ruled in error that collusion between tenant and landlord was required in order to find illusory tenancy. Even if landlord didn't benefit from the arrangement, it may have known or possibly should have known of the subterfuge. Based on a prior appeals court decision, subtenant need only show that landlord had constructive knowledge of the arrangement. The case was sent back to the DHCR.

Riggin v. DHCR: Index No. 152481/2017, NYLJ No. 1511752207 (Sup. Ct. NY; 11/9/17; Bluth, J)