Insufficient Proof of High-Rent Deregulation

Tenant complained of a rent overcharge. The DHCR ruled for tenant and assessed triple damages for willful overcharge. Landlord sought reconsideration. The DHCR reopened the case, and the DRA found no overcharge since the apartment was previously exempt from rent regulation. Tenant then appealed, and the DHCR ruled for tenant, reinstating the overcharge finding. Landlord filed an Article 78 petition, claiming that the DHCR's decision was arbitrary and unreasonable. The court ruled against landlord. The DHCR's order had a rational basis. No exit registration had been filed, and there was insufficient proof that the apartment was deregulated. Landlord also failed to show that the overcharge wasn't willful.

Faith Ministries, Inc. v. DHCR: Index No. 106427/10, NYLJ No. 1202475757289 (Sup. Ct. NY; 11/8/10; Rakower, J)