Landlord Who Purchased Building Responsible for Overcharge Refund

Landlord sued to evict tenant for nonpayment of rent. The court granted tenant's request to dismiss the case. Landlord appealed and lost. In 2012, the DHCR had ruled there was a rent overcharge and directed prior landlord to refund $38,640. Tenant then began crediting the award against rent due. In 2016, the DHCR issued a second order, finding that tenant was still being charged incorrect rent and finding an additional overcharge of $12,210. The court properly dismissed the case because tenant was still deducting the overcharge award from rent as it accrued. Current landlord claimed that it bought the building at a judicial sale, which may be a grounds to exempt a new landlord from prior landlord's overcharge liability under Rent Stabilization Code Section 2526.1(f)(2)(i). But landlord failed to show that no records to establish the legal rent were provided at the judicial sale. Merely being a successor to a purchaser at a mortgage foreclosure action wasn't enough to shield the current landlord from rent overcharge liability.

Fordham Fulton Realty Corp. v. DeLeon: 65 Misc.3d 141(A), 2019 NY Slip Op 51712(U) (App. T. 1 Dept.; 10/24/19; Ling-Cohan, JP, Gonzalez, J)