DHCR Won't Consider Rent History Records Submitted by Landlord for First Time on Appeal

The DHCR's Tenant Protection Unit (TPU) conducted an investigation of an apartment to determine its legal regulated rent (LRR). When landlord failed to respond to a 2016 TPU subpoena for rent records, TPU referred the matter to the DRA, who opened a rent overcharge proceeding. In 2022, the DRA sent landlord a request for additional information (RFAI) seeking rent records for the apartment going back to the July 2014 base date, proof of individual apartment improvements (IAIs), if any, and proof of annual registrations for the apartment for the years 2016 through 2021. Landlord stated that it was unable to produce the requested records. A new tenant also responded, claiming that the unit was illegally removed from rent stabilization and that landlord had never registered the apartment with a rent higher than $2,000 per month. In December 2022, the DRA sent landlord a Final Notice of Imposition of Treble Damages. Landlord still submitted no rent history documentation.

In 2023, the DRA ruled for tenant, finding that the evidence indicated a fraudulent scheme to deregulate the apartment. The DRA applied a default formula that took the lowest stabilized rent from the DHCR's registration information for the same sized apartment in the building, and froze that rent. The resulting overcharge with triple damages was $73,774.

Landlord appealed and lost. Landlord submitted some rent history records for the first time on appeal, claiming that they'd previously been lost or stolen, and that staff failures and COVID-19 had interfered with prior production of the records. The DHCR pointed out that the default formula was applied here based on landlord's failure to provide rent history records. The default formula also would have been used if there was otherwise a finding of fraud. The DHCR refused to accept proof submitted by landlord for the first time with its PAR. Landlord's claimed inability to access computer files, and other excuses, weren't valid given the length of time that the matter had been pending before the DRA ruling was issued. 

Cabrini Realty, LLC: DHCR Adm. Rev. Docket No. LU410002RO (12/13/23)[7-pg. document]