Landlord & Tenant Law

In tenant's action to recover damages for rent overcharges, tenant appealed from Supreme Court's order granting landlord's summary judgment motion. The Appellate Division affirmed, finding that tenant had not established fraud that would warrant application of DHCR's default formula for determining rent.

In 2008, landlord obtained a J-51 tax abatement for a 95-unit Jackson Heights building in which apartments were rent stabilized or rent controlled. Subsequently, landlord registered 26 apartments as exempt from regulation because they had reached the high-rent vacancy decontrol amount. Tenant rented one of those apartments in 2015. In January 2016, when DHCR informed landlord and other landlords that Roberts v. Tishman Speyer Props, LP, 13 NY3d 270, applied retroactively and that high rent decontrol was not available for J-51 properties, landlord registered each of its rent-stabilized apartments with DHCR and offered tenant a rent-stabilized lease, which tenant accepted. In 2019, tenant brought this action alleging that failure to register the apartment before 2016 was part of a fraudulent scheme to deregulate the apartment requiring rent to be set pursuant to DHCR's default formula. Tenant conceded that the legal regulated rent for the apartment would be higher than the market rent tenant was paying, but nevertheless contended that landlord's fraud required application of the default formula, which would have resulted in a still-lower rent. Supreme Court granted summary judgment to landlord, and tenant appealed.