Rent Overcharge Must Be Recalculated to Reflect Four-Year Lookback

Landlord sued to evict rent-stabilized tenant for nonpayment of rent. In response, tenant claimed rent overcharge and asked the court to dismiss the case. The court ruled for tenant and awarded tenant an overcharge refund of $8,112 with triple damages, based on an unregistered legal regulated rent of $592.

Tenant appealed, and the case was sent back for recalculation of the overcharge amount using the default formula. Under the Court of Appeals April 2020 ruling in Regina Metropolitan v. DHCR, provisions of HSTPA governing rent overcharge and the statute of limitations on such claims can't be applied retroactively to overcharges that occurred before June 14, 2019. By applying pre-HSTPA law to this case, it was clear that landlord engaged in a fraudulent scheme to remove the apartment from rent stabilization. Neither tenant nor prior tenant were informed that the apartment was rent stabilized or offered a stabilized lease. Landlord charged illegal rents and didn't file annual rent registrations. Documents showed a pattern of unsubstantiated and unexplained rent increases.

The appeals court also ruled that rent history records outside the four-year lookback period were permitted only to determine whether there was a fraudulent scheme. The default formula must be used to the set the base rent, and triple damages should be applied.

Vendaval Realty, LLC v. Felder: Index No. 570444/19, 2020 NY Slip Op 50786(U)(App. T. 1 Dept.; 7/6/20; Shulman, PJ, Cooper, Edmead, JJ)