No Fraud Found in Connection with Rent Registrations or IAIs

Tenant complained of rent overcharge and improper deregulation of his apartment. The DRA ruled for tenant, finding that the rent was frozen at $1,925 per month when tenant moved in on Nov. 1, 2013, based on landlord's failure to file rent registrations for 2012 and 2014. This overcharge wasn't willful. And, due to a rent reduction order issued in 2016, tenant's rent remained frozen. The DRA found no fraudulent scheme to deregulate the apartment.

Tenant and landlord both appealed and lost. Tenant continued to claim fraud as well as triple damages, and landlord argued that the DRA improperly froze tenant's rent. Landlord's pre-base date rent increase based on individual apartment improvements (IAIs), on its own, wasn't an indicator of fraud. Inaccurate rent registrations also didn't indicate fraud. The DRA relied on leases submitted, and the rent charged never exceeded the deregulation threshold. An overcharge finding based solely on failure to register rents isn't subject to triple damages. Landlord's PAR also must be denied since he didn't file the missing rent registrations before the DRA ruled on the complaint and the rent reduction order was still in effect.

Talts/Albert: DHCR Adm. Rev. Docket Nos. FQ410018RT, FQ410014RO (6/28/18) [7-pg. doc.]