Landlord Fraudulently Registered Prior Rent and Nonexistent Tenant

Tenant moved into a rent-stabilized apartment in November 2003 at a rent of $1,800 per month. In December 2003, landlord registered the apartment with the DHCR, stating that a prior tenant paid $1,000 per month. The apartment also was registered for a previous tenant at $475 per month. Landlord sued to evict tenant for nonpayment in 2009. Tenant claimed harassment, breach of the warranty of habitability, and rent overcharge. In that case, the court found that landlord had fraudulently registered prior tenant, who didn't exist, and claimed nonexistent improvements to the apartment to inflate the rent. The court also found that the base rent was affected by the fraud. But because tenant didn't prove the amount of the legal regulated rent, the overcharge claim was dismissed without prejudice.  

Tenant then sued landlord for rent overcharge and sought triple damages and attorney's fees. Tenant also claimed that the corporate landlord abused the corporate form by intermingling assets and asked the court to pierce the corporate veil. The court ruled for tenant without a trial.

Landlord appealed and lost. Since a court had already ruled that there was fraud, landlord couldn't now claim that there was none. Because there was fraud, the four-year rule didn't apply to tenant's new overcharge claim. And there was proof that landlord intermingled his corporate funds with personal funds. Landlord also failed to prove that the overcharge wasn't willful, so the court properly awarded triple damages.

Conason v. Megan Holding LLC: 2013 NY Slip Op 05956, 2013 WL 5311526 (App. Div. 1 Dept.; 9/24/13; Acosta, JP, Renwick, Richter, Frinman, JJ)