Landlord Must Refund Over $800,000 to Tenant

Tenant sued landlord for rent overcharge. The court ruled for tenant and ordered landlord to refund over $875,000, including triple damages. Landlord appealed and lost. The appeals court found that: (1) landlord improperly deregulated the apartment while it was receiving J-51 tax benefits and that tenant was entitled to rent-stabilized status for the duration of his tenancy and to collect any rent overcharge; (2) landlord didn’t provide sufficient information to validate monthly rent increases; and (3) landlord’s collection of unlawful rent overcharges before filing late rent registrations warranted imposing a rent freeze on the apartment. Because tenant showed a colorable claim of fraud, the lower court properly disregarded the rent charged four years prior to the filing of the rent overcharge claim, and properly examined the entire rent history to determine the legality of the base rent. The application of the DHCR’s default formula also was warranted given the unreliability of the rental history since 1995 given landlord’s failure to file a number of annual rent registrations. 

Altschuler v. Jobman 478/480 LLC: 2016 NY Slip Op 00035, 2016 WL 71898 (App. Div. 1 Dept.; 1/7/16; Acosta, JP, Andrias, Manzanet-Daniels, Kapnick, JJ)