No Fraud by Landlord in Connection with Rent Overcharge

Unregulated tenant complained of rent overcharge. The DRO ruled for tenant, found that he was rent stabilized, and ordered landlord to refund $30,278 plus interest. The DRO found that the legal regulated rent on the base date four years before tenant complained was $1,300. This was the rent tenant paid at that time. Any overcharges came later when rent increases exceeded applicable rent guidelines. The overcharge wasn’t willful, because landlord had sent a full refund with interest to tenant. There was insufficient proof of any fraud, as claimed by tenant.

Tenant appealed and lost. There was no evidence of a fraudulent scheme to deregulate the apartment, because landlord had always registered the apartment as rent stabilized, didn’t attempt to file amended registrations after the filing of the complaint, and never filed a rent higher than the decontrol threshold in effect at the time. The fact that landlord charged illegal rent increases in 2011 and 2012 didn’t prove involvement in a fraudulent scheme to deregulate the apartment, especially where landlord had refunded the overcharge with interest and adjusted the legal regulated rent. 

Aidekman: DHCR Adm. Rev. Docket No. DU410065RT (3/1/16) [6-pg. doc.]