Landlord & Tenant

False Rent Registration Statements Preclude Landlord from Collecting Renovation Increase

Bradbury v. 342 West 30th Street Corp.

NYLJ 6/2/11, p. 26, col. 4

AppDiv, First Dept.

(memorandum opinion)

In an action by tenant for a declaration that his apartment was rent-stabilized, both landlord and tenant appealed from Supreme Court's declaration that the apartment was stabilized and that landlord was entitled to a rent reflecting renovations made after the departure of the previous tenant. The Appellate Division modified to reduce the rent to the pre-renovation amount, concluding that knowingly-false rent registration statements did not constitute a proper filing and barred landlord from collecting a renovation increase.

When the former tenant moved out of the subject apartment in 2001, her rent-stabilized rent was $402.43 per month. About eight months later, landlord leased the apartment to tenant for $2,000 per month without informing tenant that the apartment was rent-stabilized. Landlord did register the apartments as rent-stabilized in both 2002 and 2003, and listed the legal regulated rent as $2,000 per month. Tenant received these annual rent registration statements and in December 2003 brought this action alleging that landlord had willfully overcharged tenant an amount above the legal regulated rent. Landlord responded by alleging that he had spent in excess of $90,000 in renovations on the apartment and was entitled to an increase of 1/40 of that amount as a rent increase, bringing the total rent to more than $2,000 per month and qualifying the apartment for luxury decontrol. After trial, Supreme Court concluded that the testimony of landlord's principal was unworthy of belief, and that bills and invoices had been fabricated for litigation. The court concluded that landlord had spent no more than $3,400 on renovations, and concluded that the lawful rent at the inception of tenant's tenancy was $1,390.87. The court awarded tenant treble damages, leading to an award of more than $58,000 and a declaration that the apartment remained rent-stabilized. Both parties appealed.

In modifying, the court relied on section 26-517[e] of the Administrative Code, which provides that an owner's failure to file a “proper and timely” annual rent registration statement bars the owner from collecting any rent in excess of the legal regulated rent in effect on the date of the last preceding registration statement. The court held that landlord's filing of knowingly false registrations statements did not constitute a “proper” filing, and barred landlord from collecting more than $402.43 per month. The court therefore remanded for recalculation of the damage award.

False Rent Registration Statements Preclude Landlord from Collecting Renovation Increase

Bradbury v. 342 West 30th Street Corp.

NYLJ 6/2/11, p. 26, col. 4

AppDiv, First Dept.

(memorandum opinion)

In an action by tenant for a declaration that his apartment was rent-stabilized, both landlord and tenant appealed from Supreme Court's declaration that the apartment was stabilized and that landlord was entitled to a rent reflecting renovations made after the departure of the previous tenant. The Appellate Division modified to reduce the rent to the pre-renovation amount, concluding that knowingly-false rent registration statements did not constitute a proper filing and barred landlord from collecting a renovation increase.

When the former tenant moved out of the subject apartment in 2001, her rent-stabilized rent was $402.43 per month. About eight months later, landlord leased the apartment to tenant for $2,000 per month without informing tenant that the apartment was rent-stabilized. Landlord did register the apartments as rent-stabilized in both 2002 and 2003, and listed the legal regulated rent as $2,000 per month. Tenant received these annual rent registration statements and in December 2003 brought this action alleging that landlord had willfully overcharged tenant an amount above the legal regulated rent. Landlord responded by alleging that he had spent in excess of $90,000 in renovations on the apartment and was entitled to an increase of 1/40 of that amount as a rent increase, bringing the total rent to more than $2,000 per month and qualifying the apartment for luxury decontrol. After trial, Supreme Court concluded that the testimony of landlord's principal was unworthy of belief, and that bills and invoices had been fabricated for litigation. The court concluded that landlord had spent no more than $3,400 on renovations, and concluded that the lawful rent at the inception of tenant's tenancy was $1,390.87. The court awarded tenant treble damages, leading to an award of more than $58,000 and a declaration that the apartment remained rent-stabilized. Both parties appealed.

In modifying, the court relied on section 26-517[e] of the Administrative Code, which provides that an owner's failure to file a “proper and timely” annual rent registration statement bars the owner from collecting any rent in excess of the legal regulated rent in effect on the date of the last preceding registration statement. The court held that landlord's filing of knowingly false registrations statements did not constitute a “proper” filing, and barred landlord from collecting more than $402.43 per month. The court therefore remanded for recalculation of the damage award.