DHCR Must Re-examine Overcharge Claim for Fraud

Tenant complained of rent overcharge. The DRA ruled for tenant, finding that the base date rent was $1,800 per month, that there was no reason to review rental events pre-dating the base date, and that the total rent overcharge was $963 plus interest due to landlord’s failure to offer a valid initial lease. Tenant appealed, claiming that landlord engaged in a fraudulent scheme to deregulate the apartment and that the overcharge was willful. The DHCR ruled against tenant, who then filed an Article 78 court appeal. The court ruled for tenant and sent the case back to the DHCR for further consideration. The court found that the prior landlord, without having applied to destabilize the apartment, simply stopped filing rent registrations with the DHCR. This was enough to show a colorable claim of a fraudulent scheme to remove the apartment from rent stabilization. The DHCR sent the case back to the DRA and noted that refund of the previously determined overcharge was stayed pending the DRA’s decision. 

Drosdeck: DHCR Adm. Rev. Docket No. EX210003RP (1/12/17) [3-pg. doc.]