No Indicia of Rent Fraud Bars Reviewing Rent History Back to 1993

Landlord sued to evict rent-stabilized tenant for nonpayment of rent in 2022. Tenant had lived in the unit since 1997. Among other things, he claimed fraudulent rent overcharge, and asked the court for permission to conduct pretrial questioning going back to 1993 to review irregularities in the apartment's rent history. The court ruled against tenant since tenant's fraudulent overcharge claim was based on many factors and irregularities that could be found in the DHCR rent history and in other publicly available records for the apartment. Tenant later asked the court to reconsider in light of changes to the applicable rent stabilization law provisions concerning rent fraud that were enacted in December 2023 and March 2024. The court agreed to consider the effect of the amended rent stabilization law provisions.

The court ruled against tenant, noting that whether it adhered to the heightened "common law" fraud standard for pleading and proving fraud purportedly espoused in the Regina case, or whether it considered the totality of the circumstances when determining whether tenant had raised a colorable claim of fraud, a fraudulent scheme or strategy to evade the law must first be discernable. Ultimately, after lengthy review of applicable law, the court found that tenant had neither pleaded a common law fraudulent scheme to deregulate his apartment nor raised a colorable claim of a fraudulent strategy to remove his apartment from the protections of the law. Tenant's apartment rent had never been close to any deregulation threshold when deregulation was possible under the rent stabilization law.

41-47 Nick LLC v. Odumosu: Index No. 320222-22, 2024 NY Slip Op 23167 (Civ. Ct. NY; 6/11/24; Bacdayan, J)