No Indicia of Fraudulent Scheme to Deregulate Apartment

Tenant complained of rent overcharge. The DRA ruled against tenant, finding no overcharge after applying lawful rent increases to the four-year base date rent. While tenant initially paid a preferential rent, his vacancy lease rider limited the preferential rent to the vacancy lease period only. At that time, before HSTPA was enacted, landlord was permitted to limit the preferential rent in this way.

Tenant appealed and lost. He claimed that, through pre-base date rent increases based on individual apartment improvements (IAIs), landlord engaged in a fraudulent scheme to deregulate the apartment. The DHCR disagreed.  The fact that landlord listed two different IAI rent increases in the 2010 vacancy lease riders issued to a prior tenant was merely a scrivener's error, and the same legal regulated rent (LRR) was listed in both documents. And tenant's mere claim that IAIs weren't performed was insufficient to call into question the 1997 and 2010 rent increases. Given the passage of time, tenant's photographs of apartment conditions in 2020 were insufficient to prove the IAIs were fraudulent. And DOB permits to perform IAI work weren't required at that time. Claimed misrepresentations that landlord was receiving tax benefits for the building didn't affect landlord's ability to charge the legal regulated rent since no such benefits were received. And this didn't lead to deregulation of the apartment. Landlord registered the apartment as rent stabilized annually, and listed both the LRR and preferential rent.

Lucas: DHCR Adm. Rev. Docket No. IS610050RK (6/15/21)[3-pg. document]