DHCR Reasonably Found Indicia of Fraud

February 8, 2021

LVT Number: #31207

Tenant complained of rent overcharge. The DRA ruled for tenant, and the DHCR denied landlord's PAR. Landlord was directed to refund the overcharge with triple damages.  Landlord then filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable. The court and appeals court ruled against landlord. Under the Rent Regulation Reform Act of 1997 (RRRA), in effect at the time of tenant's complaint, a four-year lookback period applied to the complaint unless there was substantial indicia of landlord fraud.

Tenant complained of rent overcharge. The DRA ruled for tenant, and the DHCR denied landlord's PAR. Landlord was directed to refund the overcharge with triple damages.  Landlord then filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable. The court and appeals court ruled against landlord. Under the Rent Regulation Reform Act of 1997 (RRRA), in effect at the time of tenant's complaint, a four-year lookback period applied to the complaint unless there was substantial indicia of landlord fraud. In this case, the DHCR's decision that the base date rent was the product of a fraudulent scheme had a rational basis and wasn't arbitrary or capricious. The DHCR's determination to apply the default formula to establish the base date rent and to impose triple damages wasn't arbitrary or capricious and also had a rational basis.

Bergen Realty & Mgt., LLC v. DHCR: Index No. 2018-09588, 2021 NY Slip Op 00168 (App. Div. 2 Dept.; 1/13/21; Mastro, PJ, Austin, Hinds-Radix, Wooten, JJ)

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