Four-Year Rule Applies to Deregulated Apartment

Tenant complained of rent overcharge. He argued that landlord illegally deregulated his apartment and registered it as permanently exempt in 2007. The DRA ruled against tenant because tenant’s complaint was filed more than four years after the apartment was deregulated. Tenant appealed and lost. Tenant argued that the four-year ruled didn’t apply because there was a colorable claim of fraud in how landlord deregulated the apartment and because tenant had also requested a ruling on the apartment’s rent-stabilized status.

The DHCR found no indication of fraud. The rents set forth in landlord’s lease records were consistent with annual rent registrations. Landlord also submitted some proof of individual apartment improvements performed before tenant moved in, which outweighed the results of an HPD inspection conducted more than four years after the claimed improvements were done. Since the four-year rule doesn’t require landlord to retain rent records prior to the base date, the DRA wasn’t authorized to review each claimed improvement in the manner that it would have if the investigation was for a period within the four-year review period. Landlord also explained how tenant’s rent was calculated in a deregulation rider attached to her first lease. Landlord also had filed a timely exit registration. There also was no basis in this case to go beyond the four-year base date, absent a valid fraud claim.

Bohm: DHCR Adm. Rev. Docket No. CU410034RT (7/22/15) [5-pg. doc.]