Rent Overcharge Wasn't Fraudulent

Tenant complained of a rent overcharge. The DRA ruled for tenant, finding a small overcharge. The DRA ordered landlord to refund $281 plus interest, but no triple damages. Tenant appealed, claiming that the overcharge was not only willful but fraudulent. Tenant claimed that between 1995 and the base date, landlord named different members of tenant's family on renewal leases so that it could claim entitlement to vacancy rent increases. Tenant argued that, in the case of fraud, New York's highest court ruled that the rent history predating the four-year look-back period can be examined.
The DHCR ruled for tenant in part. Landlord's conduct didn't amount to fraud. In Thornton v. Baron, the case decided by the Court of Appeals, the case involved an illusory tenancy that was void at the outset. But the DRA should have considered landlord's actions and assessed triple damages for willful overcharge. Landlord's pattern of raising the rent by an amount roughly equal to twice the applicable guideline increase and registering these increases as vacancy increases showed willful rent overcharge. The total refund due tenant was $762.

Guzman: DHCR Adm. Rev. Docket No. XD110020RT (6/12/09) [3-pg. doc.]