No Fraudulent Scheme Found in Connection with Rent Overcharge

Tenant complained to the DHCR in February 2019, claiming rent overcharge. The DRA ruled for tenant, finding a total overcharge with triple damages of $55,995. But, since tenant owed $92,000 in back rent, there was no money owed to tenant.

Tenant appealed and won, in part. She claimed that landlord engaged in a fraudulent scheme to deregulate the apartment by registering two "phantom" tenants in prior years in order to increase the apartment rent while the unit was vacant. The DHCR found that tenant's fraud claim had no merit. The base date rent was legal and valid, and any claim by tenant of fraudulent activity concerned rental events only after the base date. The DHCR also won't find that registrations containing inaccurate information were invalid under RSL Section 26-517(e) for purposes of freezing the rent. Plus, landlord never deregulated the apartment. In addition, the fact that some of landlord's checks for IAIs were written after the tenant moved in didn't discount the IAI rent increase. But the DHCR discounted some of the IAI costs, so the total overcharge was $72,000. But, since the total outstanding rent arrears were now calculated as $78,443, there still was no money owed to tenant.

Bautista: DHCR Adm. Rev. Docket No. HN210046R (4/16/25)[5-pg. document]