Using Default Formula, Court Orders Landlord to Refund $120,000 Overcharge

Landlord sued to evict unregulated tenant for nonpayment of rent. Tenant claimed rent overcharge and improper deregulation of his apartment. The court dismissed landlord's case and ruled for tenant, finding that landlord had engaged in a fraudulent scheme to deregulate the apartment. The court initially directed the parties to settle an order calculating the rent overcharge but later granted tenant's request for recalculation based on the Court of Appeals' decision in Regina Metro. v. DHCR. The court ruled that calculation of the legal regulated rent must be based on the default formula providing that when the base date rent was affected by fraud, rent would be set at the lowest of four amounts set forth under the Rent Stabilization Code's default formula. The total amount of the overcharge, including triple damages and minus any unpaid rent arrears, was $120,000. The court granted tenant a money judgment for the overcharge.

Upper Broadway LLC v. Iverson: Index No. 80175/17, NYLJ No. 1612989327 (Civ. Ct. NY; 2/4/21; Schneider, J)