Document Production by Landlords in Overcharge Case Limited to Four-Year Lookback Period

Building tenants sued landlord in 2018 for rent overcharge. In connection with pre-trial discovery, the court granted tenants' request to compel landlord to produce their operating and management agreements, all documents showing the ownership and formation of its entities, and all communications between any tenant and any of the defendants, as well as all individual apartment improvement (IAI) and MCI records, notices of deregulation, apartment registrations, leases, other rent records and DHCR Registration Rent Roll Report and Cases by Building Report.

Landlord appealed and won in part. The appeals court denied tenants discovery as to pre-base date rental records going back more than four years before tenants brought their court action, and otherwise affirmed the lower court's ruling. At this point, tenant had failed to identify substantial indicia of fraud to implicate the fraudulent scheme exception to the four-year lookback period. Rent increases alone didn't suffice to establish a colorable claim of fraud. RSC Section 2521.2(c) was misplaced and didn't override the statute of limitations under former RSL Section 26-516(a) and CPLR 213-a. The court noted that post-base date DHCR registration records and Cases by Building Reports were relevant to determining the size of the class in this proposed class action.

Yen Hsang Chang v. Westside 309 LLC: Index No. 153031/18, App. No. 1289, Case No. 2023-04202 (App. Div. 1 Dept.; 12/21/23; Manzanet-Daniels, JP, Gonzalez, Scarpulla, Mendez,, Higgitt, JJ)