Overcharge Claims Based on Inflated Rents Were Untimely

Tenants sued landlord in 2020, claiming that prior landlord initially registered unlawfully inflated legal regulated rents for their rent-stabilized apartments. Tenants claimed this was a fraudulent scheme to deregulate the units. Therefore, they argued, the court should look back more than four years to allow recalculation of the legal rents and apply the default formula to set the 2016 base date rents. The court denied landlord's request to dismiss the case.

Landlord appealed and won. The appeals court found that neither tenants nor prior tenants could have reasonably relied on the inflated legal regulated rents filed on DHCR registration statements. The inflation of the legal regulated rents on the publicly filed registration statements was clear from the statements themselves. Because tenants' claims were based on inflated figures for legal regulated rents registered far more than four years before tenants sued landlord in 2020, their claims were time-barred.

Burrows v. 75-25 253rd St. LLC: Index No. 160082/20, Appeal No. 17103-17104, Case No. 2021-04654-2022-02533, 2023 NY Slip Op 01940, NYLJ No. 1681480243 (App. Div. 1 Dept.; 4/13/23; Friedman, PJ, Kapnick, Kennedy, Mendez, Shulman, JJ)