Four-Year Rule Upheld Where No Proof of Fraud

Rent-stabilized tenant complained of a rent overcharge. The DRA ruled against tenant, finding no overcharge on or since the 2007 base date four years before tenant’s complaint was filed. Tenant appealed, claiming that the 2004 apartment rent was fraudulent and that the DHCR therefore should ignore the four-year rule and review prior rent history. The DHCR ruled against tenant. Under the Court of Appeals’ decision in Grimm v. DHCR, evidence of fraud is needed to justify examining a rent history preceding the four-year base date. There must be a combination of circumstances that point to other violations of the Rent Stabilization Law, a fraudulent deregulation scheme, and a variance in the rent registration history from the lease history. In this case, tenant’s claim of fraud wasn’t enough to justify ignoring the four-year rule.

Mackay: DHCR Adm. Rev. Docket No. AO410018RT (8/23/12) [3-pg. doc.]