No Fraud Found Where Apartment Remained Rent Stabilized

Tenants complained of rent overcharge in 2010, and claimed that prior landlord engaged in a fraudulent scheme to deregulate the apartment. The DRA found that the base date rent was the $2,009 rent charged, voided 2010 and 2012 leases as back-dated and untimely, and also froze the rent at $2,009 based on landlord’s failure to register the apartment since 2012. But tenants never paid more than the base date rent and there was no overcharge.

The DRA ruled against tenants, who appealed and lost. Tenants’ fraud claim was properly dismissed. Tenants had lived in the apartment since 1996, and they couldn’t have been vacancy deregulated even if their rent reached $2,000 in 2010. Landlord erroneously registered the apartment as exempt in 2011. Landlord’s collection of an individual apartment improvement (IAI) rent increase before tenants moved in wasn’t proof of fraud. Landlord’s failure to file annual rent registrations between 2005 and 2007 also wasn’t part of a fraudulent scheme to deregulate the apartment. And tenants’ claim that Altman and other court cases applied was incorrect, because in those cases the court froze the rent at the last validly registered rent based on a finding of landlord fraud.

Weeks: DHCR Adm. Rev. Docket No. EP210060RT (11/3/16) [11-pg. doc.]