No Fraud by Landlord Where Apartment Deregulation Not an Issue

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered tenant to refund $2,800, including triple damages. Tenant appealed, claiming that the DRA failed to consider proof of landlord’s fraud in setting tenant’s rent. The DHCR ruled against tenant. There was no indication of fraud. While landlord filed late registrations, they were filed before the DRA decided the overcharge complaint and there were no other overcharges based on the lease rent. The late registrations therefore weren’t part of a fraudulent scheme to deregulated the apartment. The base date rent also was substantially lower than the $2,000 deregulation threshold in effect at that time. Fraud, as described in the case of Grimm v. DHCR, concerned actions on a landlord’s part to improperly deregulate an apartment.  Also, landlord’s demand that tenant pay rent in cash didn’t show a fraudulent scheme to deregulate the apartment. Tenant also complained that landlord didn’t give her the option of a one- or two-year renewal lease, but this didn’t prove fraud. Tenant could file a lease renewal complaint with the DHCR.

Ross: DHCR Adm. Rev. Docket No. DP110008RT (1/15/16) [4-pg. doc.]