No Overcharge for Tenant in Improperly Deregulated Apartment

Tenant complained of rent overcharge in June 2009. She moved into the apartment in June 2005 under a non-regulated lease. The legal rent was $2,000 per month and tenant paid a preferential rent of $1,600. The building received J-51 tax benefits. Tenant claimed that the apartment wasn’t properly registered, that her non-regulated vacancy lease was improper, and that there was an overcharge. The DRA ruled against tenant, finding no overcharge. Tenant was rent stabilized, and the base rent date was June 1, 2005. The base date rent was $1,845, and tenant paid a lower preferential rent. The DRA found no fraudulent scheme by landlord to deregulate the apartment.

Tenant appealed and lost. The DRA investigated the apartment’s rent history and reduced the base date rent as a result. The fact that landlord charged tenant a preferential rent wasn’t proof of fraud. And there was no prohibition against treating tenant as unregulated in 2005 even if landlord was receiving J-51 benefits. New York’s highest court didn’t decide until 2009 that buildings receiving J-51 benefits were ineligible for high-rent deregulation. Landlord also submitted sufficient proof of individual apartment improvements (IAIs) performed in 2005.

Lyon: DHCR Adm. Rev. Docket No. CX410018RT (8/17/15) [8-pg. doc.]