Recent Amendments to Rent Fraud Provisions Not Applied Retroactively to 2019 Complaint

Tenant complained to the DHCR in August 2019 of rent overcharge and fraudulent deregulation of his apartment. Landlord answered that the apartment was lawfully deregulated when the rent reached $2,500 in 2011, that the prior tenant lived in the unit for over 25 years, and that the prior landlord renovated the apartment at a cost of $61,000. Landlord submitted a contract proposal, contractor's affidavit, and four checks as proof of payment. In reply, tenant claimed that any individual apartment improvements (IAIs) done couldn't have cost more than $14,600.

The DRA ruled against tenant, who appealed and lost. HSTPA amendments to the rent stabilization law applied to tenant's complaint and, under the HSTPA, the earliest base date for overcharge complaints was June 14, 2015. But the DRA  also considered pre-base date records to determine the validity of the apartment deregulation. Later rent law amendments enacted in 2024 and 2024 concerning fraud were inapplicable and wouldn't be applied retroactively.

Claimed insufficiencies in pre-base date IAI documents, without more, was insufficient to prove fraud. Also, the DHCR has long held that review of such pre-base date IAI records need not meet the same level of scrutiny as records maintained within the four-year overcharge lookback period. Landlord's proof of IAIs comported with DHCR Policy Statement 90-10, in effect at the time the work was done. And, contrary to tenant's claims, tenant never claimed that the work wasn't done, landlord wasn't required to submit DOB permits for the work to qualify as an IAI, and the submitted checks were consistent with the contractor's affidavit even though the checks didn't list the apartment number that payment was made for. The prior tenant's $776 rent in 2011 was properly increased by a 16.5 percent vacancy increase, 16.2 percent longevity increase, and $1,525 IAI increase. This brought the legal rent over the $2,500 deregulation threshold then in effect.

Gomes: DHCR Adm. Rev. Docket No. MO410007RT (8/13/24)[6-pg. document]