No Rent Overcharge to Tenant in J-51 Building

Tenant complained of rent overcharge in 2014. Landlord gave tenant an unregulated lease when he moved into the apartment in 2003. But tenant claimed that he was rent stabilized because the building was receiving J-51 tax benefits and also that the apartment was never legally decontrolled. Landlord pointed out that tenant’s apartment was deregulated in 2003 and the building didn’t start receiving J-51 tax benefits until 2006.

The DRA ruled against tenant. The base rent date was March 1, 2008, four years before tenant filed his complaint. At that time, tenant’s monthly rent was $6,985, and after that tenant paid rent increases at less than the permitted rent guidelines increases. So there was no overcharge.

Tenant appealed and lost. The apartment was rent controlled before tenant moved in. It didn’t matter that landlord mistakenly registered the apartment as rent controlled from 1984 - 2011. Registrations before the 2008 base date were beyond the four-year look-back period, and landlord had amended the more recent registrations to show that the apartment was now rent stabilized. There was no proof that landlord made any misrepresentations when the building obtained J-51 benefits. And, although landlord never served an initial apartment registration (RR-1) on tenant after decontrol, this didn’t change the four-year limit on rent overcharge claims. There also was no proof of any fraud by landlord, who had followed DHCR policy regarding the effect of J-51 on apartment deregulation until the Court of Appeals decision in Roberts v. Tishman Speyers. 

Giftports, Inc.: DHCR Adm. Rev. Docket No. CW410017RT (8/11/15) [8-pg. doc.]