Substantial Rent Overcharge Finding Must Be Reevaluated

Tenant sued landlord, claiming rent overcharge and improper deregulation of his apartment. The court ruled for tenant and ordered landlord to give tenant a rent-stabilized lease at a monthly rent of $471. Using the default method, the court also ordered landlord to refund overcharges totalling $822,900, including triple damages.

Landlord appealed, and the case was reopened. The trial court had applied June 2019 HSTPA amendments to the Rent Stabilization Law to look back more than four years before tenant filed his complaint in order to establish the legal rent. But in April 2020, New York's highest court had ruled in Regina Metropolitan v. DHCR that certain HSTPA amendments to the RSL overcharge provisions couldn't be applied retroactively. Fraud by the landlord remained the only basis in this case for looking back beyond the base date to determine any rent overcharge. The overcharge finding was based on landlord's failure to prove the cost of individual apartment improvements (IAIs) it claimed were made to the apartment before tenant moved in. But, since the trial court made a specific finding as to whether landlord engaged in a fraudulent scheme to deregulate the apartment, the case must go back to the trial court for further review and, if warranted, recalculation of the overcharge finding.

Rossman v. WIndermere Owners LLC: 2020 NY Slip Op 05705, App. No 12031/Case No. 2019-2688 (App. Div. 1 Dept.; 1013/20; Webber, JP, Mazzarelli, Oing, Shulman, JJ)