No Rent Fraud Where Landlord Set New Rent After Base Date Vacancy

Rent-stabilized tenants complained of rent overcharge in 2007. The DRA ruled for tenants and ordered landlord to refund $2,951, including interest. Tenants appealed, claiming that landlord had fraudulently set the rent. The DHCR ruled against tenants. The apartment had been vacant on the base rent date, four years prior to the date the complaint was filed. Under Rent Stabilization Code Section 2526.1(3)(iii) in effect at the time the complaint was filed, the legal regulated rent became the first rent set by landlord in 2006 at $1,495, after the base-date vacancy. The default formula didn't apply to an overcharge claim when the unit was vacant on the base date. There was no proof of a fraudulent scheme to deregulate the apartment. And the first agreed-upon stabilized rent following the base date vacancy can never be the product of fraud.

Manela/Lim: DHCR Adm. Rev. Docket No. JP410027RT (7/6/21)[5-pg. document]