No Rent Overcharge Found Using Four-Year Base Date

Tenant sued landlord, claiming rent overcharge and improper deregulation of his apartment. The court ruled for tenant, found that he was rent stabilized, and referred the matter to a referee to determine the amount of rent overcharge. Landlord appealed and won, in part. The lower court properly ruled that tenant was entitled to a rent-stabilized lease. But the lower court improperly found landlord liable for rent overcharge. Tenant failed to present proof of a rent overcharge four years prior to commencement of the lawsuit in January 2014. While rent history may be examined beyond four years to determine rent-stabilized status, it can't be used for the purpose of calculating an overcharge. Rent overcharge claims generally are subject to a four-year statute of limitations, although the court could look back further if there was proof of fraudulent conduct by the landlord. There was no sufficient indicia of fraud in this case. The lower court incorrectly found that landlord's failure to maintain any records of individual apartment improvements (IAIs) and its failure to provide notices under the Rent Stabilization Code relating to the last legal regulated rent was proof of an attempt to circumvent the Rent Stabilization Law. There was no requirement under the law that IAI records be maintained indefinitely.

Fuentes v. Kwik Realty LLC: Index No. 9163 (450153/14), 2019 NY Slip Op 05840 (App. Div. 1 Dept.; 7/30/19; Sweeny, JP, Gische, Webber, Kahn, Moulton, JJ)