Rent Overcharge Wasn't Fraudulent

Rent-stabilized tenant complained of a rent overcharge. The DRA ruled for tenant and ordered a refund, including triple damages. Tenant appealed, claiming that there should be a further overcharge finding based on fraud. Landlord charged the prior tenant an illegal rent because it treated the apartment as prior tenant's nonprimary residence temporarily exempt from rent stabilization. The DHCR ruled against tenant. In the case ofThornton v. Baron, New York's highest court found that landlord and tenant conspired to circumvent rent stabilization by renting apartments as nonprimary residences above the legal regulated rents and then sublet them at even higher rents. In this case, landlord rented the apartment to a business couple who primarily resided in Suffolk County, but who used the apartment as a second residence when they stayed in the city. This didn't qualify as a fraudulent scheme that would warrant looking back more than four years at the apartment's prior rent history.

Second 82nd SM LLC/Peritz: DHCR Adm. Rev. Docket Nos. YI410035RO, YI410051RT (7/28/11) [4-pg. doc.]