No Overcharge Found Where First Stabilized Rent Was Fair Market Rent

In prior litigation, tenant sued landlord, claiming improper deregulation of his apartment. The court ruled that tenant was rent stabilized because luxury deregulation was unlawful while landlord received J-51 tax benefits for the building. Tenant then sued landlord for rent overcharge, claiming that the apartment's base date rent was illegal. The court ruled against tenant and dismissed the case.

Tenant appealed and lost. HSTPA amendments to the Rent Stabilization Law didn't apply to tenant's case. Instead, the former four-year lookback period and damage provisions applied. Tenant's initial rent was the fair market rent agreed upon between tenant and landlord since the apartment had become rent stabilized as a matter of law after the prior rent-controlled tenant moved out.

Tenant admitted that he received an initial apartment registration form (RR-1) from landlord but never filed a fair market rent appeal with the DHCR to challenge the initial rent-stabilized rent. As to any claimed rent overcharge, tenant didn't show there was a fraudulent scheme to destabilize the apartment. So there was no basis to look back at apartment rent history beyond the four-year base date. Tenant failed to show that landlord's claimed individual apartment improvements (IAIs) weren't done. Although landlord shouldn't have waited until 2015 to register the apartment, its application for high-income deregulation wasn't improper since J-51 tax benefits had long expired. And there was no rent overcharge, since the one increase during the applicable four-year lookback period was lower than the legal regulated rent increase allowed by rent guidelines.

Goldfeder v. CenPark Realty LLC: 2020 NY Slip Op 05852, App. No. 12128/Case No. 2019-3763 (App. Div. 1 Dept.; 10/20/20; Acosta, PJ, Mazzarelli, Moulton, Gonzalez, JJ)