Landlord Must Refund Over $147,000 for Rent Overcharge Based on Fraud

Tenant complained of rent overcharge and improper apartment deregulation. The DRA ruled for tenant and ordered landlord to refund $147,045, including triple damages and interest. Landlord appealed and lost. Landlord claimed that the DRA should not have looked back more than four years to determine the legal rent. Landlord pointed to the 2018 appeals court case of Regina Metropolitan Co., LLC v. DHCR, which applied the four-year rule to calculate an improperly deregulated apartment in a J-51 building. But the DHCR pointed out that, in the Regina case, there was no fraud found. In this case, there was sufficient indicia of fraud to call for review of rent history dates going back more than four years. Landlord gave tenant an unregulated lease in 2011 without a rider explaining how the rent was increased from the prior tenancy. And landlord offered no support for the rent increase in 2011 from $432 to over $2,000. Landlord also tried to conceal the fraudulent scheme and improper deregulation by failing to register the apartment and then filing amended registrations with the DHCR after the complaint was filed.

N. Henry 233, LLC: DHCR Adm. Rev. Docket No. GU210029RO (8/6/19) [3-pg. doc.]