Tenant Claiming Rent Overcharge Can Seek Discovery in Housing Court Nonpayment Case

Landlord sued to evict tenant in 2018 for nonpayment of rent. In response, tenant claimed rent overcharge and asked the court for permission to conduct pretrial questioning on that issue. The court ruled for tenant.

Landlord appealed and lost. The rent overcharge lookback period for claims made in 2018 generally is limited to four years of rent history production. An exception to that rule applies if a landlord has engaged in fraud when initially setting the rent or removing an apartment from rent regulation. In such case a court can review rent history records beyond the four-year statutory period. In this case, tenant demonstrated "ample need" for discovery by showing that there was an unexplained 47.9 percent rent increase between the last rent of the immediately preceding tenant and his first rent, as well as a failure by landlord to file any rent registrations for several years, and what the lower court characterized as "multiple and unclear registrations." So tenant had alleged a colorable claim of fraud in the initial setting of the rent and was entitled to discovery. 

603 N.J. Ave., LLC v. Hall: Index No. 2021-47KC, 2022 NY Slip Op 50303(U)(App. T. 2 Dept.; 4/1/22; Aliotta, PJ, Weston, Golia, JJ)