No Fraud by Landlord Who Omitted J-51 Rider from Renewal Lease

Rent-stabilized tenant complained of rent overcharge. The DRA found that the Sept. 15, 2005, base date rent of $3,148 was the legal rent at that time. But later landlord collected excessive rent increases. Landlord was ordered to refund $8,000, including triple damages. Tenant appealed and won, in part. Tenant pointed out that landlord failed to register the apartment and had treated it as deregulated from 1992 to 2009. Tenant argued that landlord had obtained an unlawful rent by fraud, so the DHCR should calculate the overcharge using its default method. The DHCR found that landlord's failure to register the apartment before the base date had no effect on the legal base date rent. But, since landlord didn't file late registrations until December 2010, tenant's Oct. 1, 2007, rent increase wasn't effective until then. So this increased the amount of the overcharge to $28,705, including triple damages. Otherwise, there was no indication of fraud on landlord's part. Tenant had lived in the apartment since 1984, and the building was receiving J-51 benefits at that time. In 1985, landlord failed to attach to tenant's renewal lease a J-51 rider advising tenant that she was subject to deregulation when J-51 expired. Although landlord attached the rider to later renewal leases, landlord was later barred by law from deregulating tenant's apartment when the J-51 benefits expired. Landlord's error didn't demonstrate fraud.

Kreloff: DHCR Adm. Rev. Docket No. ZD410032RT (10/9/13) [5-pg. doc.]