Trial Needed to Determine Facts Needed to Calculate Rent Overcharge

Landlord sued to evict unregulated tenants for nonpayment of rent in 2019. Tenants claimed improper deregulation and rent overcharge, and asked the court for a ruling without trial. The court ruled for tenants. Landlord claimed that the building was exempt from rent stabilization due to substantial rehabilitation, but, in a prior case, another court had ruled that landlord made false filings concerning substantial rehab. After the prior court ruling, landlord couldn't dispute again whether the building was rent stabilized. Tenants' overcharge claims were subject to the pre-HSTPA four-year lookback period. But there also was fraud by the landlord and no reliable base date rent that could be used to calculate an overcharge. So, the default formula set forth in Rent Stabilization Code Section 2526.1 applied to determine the base date rent. The only mode available given the lack of information otherwise was one that required data compiled by the DHCR, using sampling methods determined by the DHCR, for regulated housing accommodations. Since no such data had been presented to the court, a trial would be needed. But the court ruled without trial that landlord was responsible for refunding rent overcharges to tenants.

Epoch Corp. v. Doe: Index No. 83761/19, 2020 NY Slip Op 51533(U)(Civ. Ct. Kings; 12/18/20; Harris, J)