Tenant's Fraud Claim Insufficient to Thwart Four-Year Rule

Tenant complained to the DHCR of rent overcharge. Landlord claimed that the apartment was unregulated, but the DHCR found that tenant was rent stabilized because the building was receiving J-51 benefits. However, the DHCR found no overcharge. Tenant filed an Article 78 appeal, arguing that the DHCR should look back more than four years.

The court ruled against tenant, who appealed further and won. The appeals court ruled that tenant made a sufficient showing of fraud to require the DHCR to investigate the legality of the base date rent. A prior tenant paid $572 per month when he moved out in July 2004. The next tenant paid $1,750 per month starting in October 2004, and landlord needed to spend $39,000 on apartment renovations to justify an individual apartment improvement rent increase supporting the new rent. The complaining tenant moved into the apartment in 2007 and paid over $2,000 per month. Tenant claimed that landlord couldn't possibly have spent $39,000 based on the condition of the apartment in 2007. Two of the five judges disagreed with the appeals court's decision, so the DHCR appealed to New York's highest court.  

The Court of Appeals ruled for the DHCR and reinstated the lower court's decision upholding the agency's decision. The DHCR's decision wasn't arbitrary or capricious. Tenant failed to show sufficient indications of fraud that would warrant consideration of the rent history predating the four-year look-back period in a rent overcharge proceeding.

Boyd v. DHCR: 2014 NY Slip Op 04806, 2014 WL 2883894 (Ct. App.; 6/26/14; Lippmann, CJ, Graffeo, Read, Smith, Pigott, Rivera, Abdus-Salaam, JJ)