Grill and Tare Victorious in Denial of Tenants’ Complaint

April 6, 2016 | Real Estate, Zoning & Land Use | Commercial Litigation | Construction

David M. Grill and Joshua Tare, partners in the firm’s commercial litigation/real estate practice group, were victorious in the denial of tenants’ complaint for rent overcharge in a proceeding filed by the tenants with the New York State Division of Housing and Community Renewal (DHCR).

Tenants’ complaint (“Complaint”) at the DHCR alleged that the rent the tenants had paid was in excess of the legal regulated rent (LRR) and that the prior landlord engaged in a fraudulent scheme to deregulate the apartment.  In support of the tenants’ allegation tenants alleged, among other things, that the rent registrations for the apartment were fraudulent, the tenants’ two prior leases were backdated, and individual apartment improvements (IAI) done in 2010 while the tenants were in possession were illegal and tenants never agreed in writing to increase in the LRR based upon the IAI.  Additionally, the tenants acknowledged that they knowingly entered into the back dated leases at the request of the prior landlord.  As a result of the allegations, the Tenants requested that the DHCR determine the LRR for the apartment based upon the DHCR’s default formula.

In denying the Complaint, the DHCR determined, among other things, that  since the IAI improvements were done in 2010 they were beyond the four year statute of limitation.  Therefore, the IAI were not subject to challenge.  Additionally, the DHCR’s determination that the LRR charged in tenants’ last lease was proper illustrates that the DHCR found tenants’ argument of a fraudulent scheme to deregulate the apartment to be without merit.

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