Landlord's Incorrect Collection of Rent Increases from 421-a Tenants Wasn't Willful

November 18, 2021

LVT Number: #31688

Rent-stabilized tenants sued landlord, claiming fraud in connection with rent overcharges. Tenants lived in a 421-a building and claimed landlord improperly charged them 2.2 percent annual rent increases in connection with the 421-a program. Landlord admitted it incorrectly collected the 2.2 percent increases but claimed it was an error, not a willful overcharge or a fraudulent act. The court ruled for tenants in part and directed the parties to submit their calculations of the lawful rents.

Rent-stabilized tenants sued landlord, claiming fraud in connection with rent overcharges. Tenants lived in a 421-a building and claimed landlord improperly charged them 2.2 percent annual rent increases in connection with the 421-a program. Landlord admitted it incorrectly collected the 2.2 percent increases but claimed it was an error, not a willful overcharge or a fraudulent act. The court ruled for tenants in part and directed the parties to submit their calculations of the lawful rents. But the court dismissed tenants' demand for triple damages because landlord showed by a preponderance of the evidence that the overcharges weren't willful. Tenants appealed and lost. The court found that the overcharges here were merely an error. So triple damages didn't apply.

Paulonis v. 287 Assoc., LP: Case Nos. 2018-00622, 2021-04790, 2021 NY Slip Op 05346 (App. Div. 2 Dept.; 10/6/21; Rivera, JP, Hinds-Radix, Duffy, Christopher, JJ)

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