Court Freezes Legal Rent at Last Reliable Registered Rent

Landlord sued to evict rent-stabilized tenant for nonpayment of rent. Tenant claimed rent overcharge. The court ruled for tenant and later calculated the amount of the overcharge by applying the June 2019 amendments to the Rent Stabilization Law under the Housing Stability and Tenant Protection Act (HSTPA).

The last reliable rent registration for the apartment was filed in 2006 and listed the legal regulated rent at $647. Landlord never explained the significant increase in rent that occurred in 2007, and registered the apartment as permanently exempt from rent stabilization in 2010. Tenant argued that the legal rent should be frozen at $647. Landlord argued that the legal rent should be set at the last reliable registered rent plus Rent Guidelines Board Order increases for each of the registered and unregistered lease terms thereafter. The court didn't apply the DHCR's default formula, finding that it was "relegated to an alternate means by which to determine" whether prior rents were reliable in light of all available proof, and that "use of the default formula is no longer necessary, or desirable." The court further stated that, "Courts are now instructed to look back as far as necessary to find the most reliable rent registration upon which to base its determination regarding an overcharge claim."

The court set $647 as the base rent for purposes of determining the overcharge. And HSTPA allowed for the addition only of "subsequent lawful increases and adjustments" to that amount. A number of leases for the apartment after the 2006 registered rent were unlawful. And landlord was plainly barred from collecting any increase after permanently exempting the apartment in 2010 and ceasing altogether to register it. So, the court determined that the legal regulated rent when tenant moved into the apartment in Nov. 2014 was $647. The total rent overcharge collected was $90,673, including triple damages.

Gold Rivka 2 LLC v. Rodriguez: 64 Misc.3d 1228(A), 2019 NY Slip Op 51341(U) (Civ. Ct. Bronx; 8/13/19; Bacdayan, J)