Landlord Can't Increase Improperly Deregulated Rent

Tenant sued landlord for rent overcharge and claimed that he was improperly deregulated. Initially, the court ruled against tenant, who appealed and won. The appeals court found in 2015 that although landlord was entitled to collect a vacancy increase from tenant when prior tenant moved out, that increase couldn’t result in apartment deregulation since the monthly rent at the time that prior tenant (who was new tenant’s roommate) moved out was less than $2,000. The case was sent back to the trial court, which ruled for tenant and found that the overcharge was willful. The court also set tenant’s legal rent-stabilized rent at $1,829 until the apartment was properly registered.

Landlord appealed and lost. The court properly disregarded the rent charged four years before the complaint was filed and looked to the last rent registered with the DHCR. The unreliability of the apartment’s rent history within the four-year limitations period was caused by landlord’s failure to file annual rent registrations. Landlord also failed to show that the overcharge wasn’t willful, because it didn’t justify the rent increase. The court properly fixed tenant’s rent at $1,829 until such time as landlord gave tenant a rent-stabilized lease and registered the apartment. Landlord could then charge a vacancy rent of $2,195. But landlord couldn’t charge a longevity increase or any other increases allowed by law for the period in which the apartment was illegally removed from rent stabilization.

Altman v. 285 West Fourth LLC: 38 N.Y.S.3d 173, 2016 NY Slip Op. 06438 (App. Div. 1 Dept.; 10/4/16; Tom, JP, Sweeny, Andrias, Webber, JJ)