No Review of Pre-Base Date Rent History Permitted Where Court Found No Fraud

September 18, 2018

LVT Number: #28616

Tenants sued landlord for rent overcharges, claiming that their apartments had been improperly deregulated while the building received J-51 tax benefits. Before tenants sued, landlord had made some adjustment to rents following the Court of Appeals decision in Roberts v. Tishman Speyer Properties, LP. But tenants claimed that additional overcharges, triple damages, and attorney's fees were due. The court ruled for tenants but found that landlord had committed no fraud in deregulating the apartment.

Tenants sued landlord for rent overcharges, claiming that their apartments had been improperly deregulated while the building received J-51 tax benefits. Before tenants sued, landlord had made some adjustment to rents following the Court of Appeals decision in Roberts v. Tishman Speyer Properties, LP. But tenants claimed that additional overcharges, triple damages, and attorney's fees were due. The court ruled for tenants but found that landlord had committed no fraud in deregulating the apartment. The look-back period was limited to four years, no willful overcharge was found, and no attorney's fees were awarded. The court's referee found that setting the free-market base date rent in May 2006 was a reliable method of establishing the rent-stabilized rent.

Tenants appealed and lost. The appeals court ruled that, since no fraud was found, RSC Section 2526.1(a)(2)(ii) and CPLR 213-a barred examination of the apartment's rent history beyond the four-year limitations period.

Raden v. W 7879, LLC: 2018 NY Slip Op 05799 (App. Div. 1 Dept.; 8/16/18; Sweeny, JP, Richter [dissenting], Andrias, Kahn, Moulton, JJ)

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