Default Formula Can't Be Used to Decide Tenant's Rent Overcharge Claim
LVT Number: #31609
Landlord sued tenant for nonpayment of rent. In response, tenant claimed rent overcharge, asked the court to utilize the default formula in determining the apartment rent, and sought pre-trial document production. In December 2019, the court denied landlord's request to dismiss tenant's defense and counterclaim. Landlord later sought to reargue and renew the court's decision.
The court again permitted tenant's defense and counterclaim to go forward. Under HSTPA, tenant was permitted to review rent registrations for the apartment at least six years prior to the date he asserted his overcharge claim in 2018. Doing so showed that landlord didn't file updated registrations for the apartment from 2001, when it removed the unit from rent control, or from 2005 through 2012, when the building was receiving a J-51 tax credit. Under HSTPA amendments to the Rent Stabilization Law, the court must consider all available rent history that's reasonably necessary to make a determination of the rent. Landlord again renewed its request for reconsideration of the court's prior decision in light of the Court of Appeals' 2021 ruling in Regina Metropolitan v. DHCR.
The court granted landlord's request and took another look since there was an actual rent charged for the apartment on the base rent date. The Regina Court had reinstated and refined the pre-HSTPA four-year statute of limitations for examining rent histories in rent overcharge cases. The Regina Court barred the examination of the rent history for the purpose of "reconstructing" what the base date rent should've been. Regina rephrased and tightened the rule for when it's appropriate to examine the rent history outside the four-year lookback period. Here, the base date rent must be used to calculate and determine the overcharge claim. Tenant claimed that the court should still look back further due to landlord fraud, but the court found no indication of landlord fraud to deregulate the apartment. The court now dismissed tenant's first defense and counterclaim seeking to employ the default formula in determining the legal apartment rent.
350 Cent. Park W. Assoc., LLC v. Udo: Index No. LYT 71196/18, 2021 NY Slip Op 50812(U)(Civ. Ct. NY; 8/19/21; Capell, J)
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