No Fraud Found in Connection with Vacancy Deregulation of Apartment

Tenants complained of rent overcharge and improper deregulation of rent-stabilized apartment. The apartment had been rented to them as deregulated in 2007. The prior tenant paid $926 per month rent in 2007, and landlord performed individual apartment improvements (IAIs) before renting the apartment to tenants. The DRA ruled against tenants, finding that the apartment wasn't subject to rent stabilization.

Tenants appealed and lost. Evidence submitted by tenants didn't demonstrate a fraudulent scheme to deregulate the apartment. They admitted that landlord performed IAIs before they moved in. Tenants could not challenge the cost assessment of the IAIs. The fact that landlord registered the apartment as rent stabilized in 2008 was in error but didn't show fraud. Landlord registered the rent in 2008 at $2,000, which was sufficient to deregulate the apartment at that time. In the absence of proof of a fraudulent scheme to deregulate the apartment, rental events prior to the base date weren't subject to review. The DHCR noted that the 2018 decision of New York's highest court in Altman v. 285 West Fourth LLC affirmed landlord's right to deregulate the apartment when the rent level reached $2,000 or more on the 2007 vacancy. And the high-rent vacancy exemption applies to the apartment even though landlord charged tenants a rent that was less than the amount qualifying the deregulation that it was entitled to collect.

Barker & Blashka: DHCR Adm. Rev. Docket No. DT410028RT (6/7/18) [4-pg. doc.]