DHCR Should Decide Tenant's Fraud and Overcharge Claims

Tenant moved into an apartment on Dec. 15, 2001, shortly after prior rent-controlled tenant moved out. The rent-controlled tenant paid $845 per month at the end of her tenancy. Prior landlord charged tenant $2,800 per month, and gave tenant unregulated leases. Prior landlord never notified tenant of the change in status, the initial registered legal regulated rent, or tenant's right to file a fair market rent appeal. Prior landlord had registered the apartment as rent controlled in 1984, but never filed a report of vacancy decontrol or initial or annual rent registration forms after tenant moved in. Prior landlord sold the building in 2007, and tenant sued current landlord in 2010, claiming that she was rent stabilized, that landlord must offer her a rent-stabilized lease, that there was a rent overcharge, and that there was fraud warranting review of rent history records going back more than four years. The court ruled against tenant and dismissed the case. Tenant appealed. The appeals court also dismissed the case. The court found that tenant could seek rent overcharges going back only four years from the date of her complaint. The court further ruled that, while it had the authority to decide the overcharge claim, the matter should be determined by the DHCR since the agency had more expertise in rent regulation. The DHCR could investigate if there was fraud, determine tenant's rent regulatory status, and apply the default formula if warranted to determine the legal base rent.

Olsen v. Stellar West 110, LLC: NYLJ, 6/11/12, p. 18, col. 5 (App. Div. 1 Dept.; Gonzalez, PJ, Friedman, Renwick, Manzanet-Daniels, Roman, JJ)