Tenant's Apartment Improperly Deregulated Based on Fraud

Tenant complained of rent overcharge and that her apartment had been fraudulently deregulated. Landlord claimed that the apartment was unregulated. The DRA ruled for tenant, finding that landlord had engaged in a fraudulent scheme to deregulate the apartment, that the base date rent was unreliable, and that tenant's legal rent was $838 using the DHCR's default method to set the rent. The DRA ordered landlord to refund $72,000, including triple damages.

Landlord appealed and lost. The DRA properly requested pre-base date rent history records to explain how the apartment rent increased from a rent-stabilized rent of $645 in 2006 to a claimed deregulated rent in 2008. Landlord submitted no evidence to the DRA to justify the large rent increase. While the DHCR need not scrutinize pre-base date IAIs the same way it would if they were performed during the four-year look-back period, landlord submitted no records showing that any work was performed in the apartment. The 2010 deregulated lease that landlord provided set forth a monthly rent of $3,200, but didn't contain a rider explaining the rent. Landlord's 2008 exit registration wasn't proof that the apartment was legally deregulated. 

BLDG Management Co., Inc.: DHCR Adm. Rev. Docket No. FP410037RO (10/12/17) [6-pg. doc.]