Trial Required on Landlord's Liability for Excess Rent Collected by Prior Landlord

Tenant filed a fair market rent appeal, claiming that the first rent-stabilized rent for her apartment was greater than the legal rent. The DHCR ruled for tenant and ordered a refund. Tenant sued prior landlord and current landlord to enforce the order. Current landlord claimed that it wasn't responsible for any refund and asked the court to dismiss the case. The court ruled against landlord. Landlord appealed and lost. Generally, new landlords aren't responsible for fair market rent appeal refunds ordered by the DHCR. But if new landlord had a chance to appear in the fair market rent appeal case, it would be responsible for the refund. It was unclear when tenant filed her fair market rent appeal, when new landlord bought the building, what the relationship was between prior and current landlord, and whether the sale of the building was an arm's-length transaction. So a trial was needed to determine the facts.

Sciarra v. 531 E. 83rd St. Owners Corp.: NYLJ, 6/24/04, p. 26, col. 1 (App. Div. 1 Dept.; Nardelli, JP, Mazzarelli, Andrias, Gonzalez, Sweeny, JJ)