No Rent Fraud Found in Connection with Small, Refunded Overcharge

Rent-stabilized tenant complained to the DHCR of rent overcharge in January 2019. The DRA ruled for tenant in part, finding that there was a rent overcharge but insufficient evidence of fraud as tenant claimed. So the DRA applied the four-year lookback period, didn't apply the default formula, and didn't impose triple damages because landlord had timely refunded any overcharge collected. Tenant also owed rent arrears exceeding $110,000, so no overcharge refund was due to tenant and attorney's fees weren't awarded to tenant.

Tenant appealed and lost. Tenant claimed that the DRA incorrectly failed to find fraud and should have applied the default formula. Landlord had deregulated the apartment as of April 1, 2009, as reflected in that year's rent registration. Because landlord filed all missing rent registrations before tenant filed his overcharge complaint and because the deregulation took place before New York's highest court ruled in the Roberts case, there was no rent freeze for failure to register and no fraud was indicated. The DRA correctly applied the four-year statute of limitations to this pre-HSTPA case. Landlord rebutted the presumption of willful rent overcharge under then-applicable DHCR Policy Statement 89-2. The overcharge plus interest in this case totalled $937.85 and landlord made a full refund within 19 days after tenant's complaint was filed. Landlord also reduced tenant's rent to the lawful rent at that time. Finally, since HSTPA didn't apply to this case, the attorney fees provisions of that act didn't apply. There was no reason in this case to award attorney's fees to tenant.

Billay: DHCR Adm Rev. Docket No. LQ110039RT (1/16/24)[4-pg. document]