Tenant Can't Claim Overcharge in Nonpayment Case

Landlord sued to evict rent-stabilized tenant for nonpayment of rent. Landlord and tenant signed a settlement agreement, and tenant paid the rent demanded. Tenant then filed a rent overcharge complaint with the DHCR, claiming that the amount tenant paid under the settlement agreement was unlawful. The DHCR ruled against tenant, finding that the rent charged was the legal rent. Tenant then asked the court to vacate the settlement agreement, making the same overcharge claim. The court ruled against tenant. Tenant didn't appeal the court's decision, but continued to pay rent at the preferential rate provided in an expired lease. Tenant refused to sign a renewal lease in which landlord demanded the maximum legal rent. Landlord then sued tenant to evict tenant for nonpayment a second time. Tenant failed to appear in court, so the court ruled for landlord based on tenant's default. Tenant then asked the court to vacate the default judgment. The court refused. Tenant appealed and lost. To vacate a default, tenant must show he has a meritorious defense. Here, the DHCR had ruled that the rent demanded by landlord was the legal rent. So tenant had no meritorious defense to the nonpayment proceeding. Tenant can't raise the same issue in housing court after the DHCR has ruled on it, and tenant didn't file any further appeal.

Heritage Place, LLC v. Davis: NYLJ, 6/23/08, p. 34, col. 4 (App. T. 2 Dept.; McCabe, JP, Tanenbaum, Scheinkman, JJ)