Statute of Limitations for FMRA Began When First Rent-Stabilized Tenant Commenced Occupancy

Rent-stabilized tenant complained to the DHCR of rent overcharge, claiming that landlord charged an inflated rent increase for individual apartment improvements (IAIs), that landlord collected a 30 percent rent increase over the apartment's prior maximum base rent (MBR) under rent control, and that landlord had a history of engaging in fraudulent rent overcharge practices. The DRA converted the proceeding to a fair market rent appeal (FMRA) and dismissed the case because tenant filed the FMRA more than four years after the unit was decontrolled.Tenant filed a PAR and lost.

Tenant then filed an Article 78 court appeal, and the court sent the case back to the DHCR for reconsideration based on a recent appeals court decision. The DHCR noted that in these decisions an appeals court ruled that the calculation of the four-year statute of limitations in a fair market rent appeal should begin based on the date the first rent-stabilized tenant commenced occupancy rather than the date the rent-controlled tenant vacated. Under these rulings, tenant's FMRA was timely, and was sent back to the DRA for reconsideration.

Schertz: DHCR Adm. Rev. Docket No. MN410005RP (5/30/24)[4-pg. document]