DHCR Can Examine Pre-Base Date Rent History to Determine If Unit Was Properly Deregulated

LVT Number: #32168

Tenant complained of rent overcharge and improper deregulation of her apartment. The DRA ruled for tenant and ordered landlord to: (a) refund $43,575 including triple damages; (b) offer tenant a rent-stabilized renewal lease; and (c) register the apartment from 2016 to 2021. Landlord appealed and lost. Landlord argued that tenant's claim was filed more than 10 years after the apartment was deregulated and therefore was too late. Landlord also claimed that there was no willful overcharge.

Tenant complained of rent overcharge and improper deregulation of her apartment. The DRA ruled for tenant and ordered landlord to: (a) refund $43,575 including triple damages; (b) offer tenant a rent-stabilized renewal lease; and (c) register the apartment from 2016 to 2021. Landlord appealed and lost. Landlord argued that tenant's claim was filed more than 10 years after the apartment was deregulated and therefore was too late. Landlord also claimed that there was no willful overcharge. The DHCR pointed out that the requirement to maintain and produce records to substantiate the deregulation of an apartment existed even before passage of HSTPA in 2019. Before then, RSC Section 2526.1(a)(2)(iii) provided an exception to the four-year lookback period to determine whether an apartment was subject to rent stabilization. An appeals court upheld that provision in 2005. The DRA properly asked landlord for proof of individual apartment improvements (IAIs) that landlord claimed caused the legal regulated rent to exceed the deregulation threshold. Landlord failed to produce such records. A lease rider explaining the basis for the rent increase, by itself, didn't constitute proof justifying a rental increase based on vacancy improvements. As to triple damages, these were mandatory under HSTPA with very limited exceptions not applicable in this case. 

140-25 Ash Associates, LLC: DHCR Adm. Rev. Docket No. KQ110002RO (7/26/22)[3-pg. document]

Downloads

32168.pdf149.73 KB