No Overcharge Where Tenant Paid $800 for Years Without Lease

Rent-stabilized tenant complained to the DHCR in 2017 of rent overcharge. He had moved into the apartment in 1987. While his vacancy lease rent was $383 per month, he had no written lease at this point and had paid $800 per month for seven years. The DRA ruled against tenant, finding no rent overcharge. The 2013 base date rent was the $800 paid by tenant, and landlord had offered tenant a renewal lease in 2017 based on proper rent guidelines.

Tenant appealed and lost. Tenant claimed that landlord's failure to register the apartment from 1987 to 2017 was proof of willfulness and fraud, and that his rent should be frozen at $383. But the DHCR found no reason to look back beyond the 2013 base rent date since there was insufficient proof of a fraudulent scheme to deregulate the apartment. The rent was never increased to a number close to the recent deregulation threshold of $2,500. Landlord didn't attempt to cover up an illegal rent by filing amended apartment registrations after tenant's complaint was filed. There was no illegal rent set in connection with a strategy to remove tenant's apartment from rent stabilization. The DRA correctly relied on canceled checks, rent ledgers, and tenant's own admission that he'd paid $800 per month for seven years to set the base rent. And the DHCR hadn't previously found a fraudulent scheme based solely on landlord's late filing of rent registrations and failure to provide leases. Landlord also had properly registered tenant's rent-stabilized rent for every year since the base date.

Jakab: DHCR Adm. Rev. Docket No. IS910006RK (2/22/21) [5-pg. doc.]