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J-51 & the four-year rule

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J-51 & the four-year rule

Postby Anna » Tue Mar 15, 2005 4:00 pm

As demonstrated in this Appellate Division (2nd highest court in NYS) decision, tenants and courts CAN go back to the original lease to determine things other than a plain-vanilla rent overcharge. In this case, the RS status of a J-51 apt. This should also be applied to Pref Rent cases, despite a recent Housing Court judges refusal to do so.

East West Renovating Co., Petitioner-Appellant,
v.
New York State Division of Housing and Community Renewal, Respondent-Respondent,
Joseph Vitale, et al., Intervenors-Respondents.

OPINION 5553

Supreme Court, Appellate Division, First Department, New York

Decided on March 8, 2005

Tom, J.P., Saxe, Ellerin, Nardelli, Sweeny, JJ.
APPEARANCES OF COUNSEL
Borah, Goldstein, Altschuler, Schwartz & Nahins, P.C., New York (Paul N. Gruber of counsel), for appellant.
Marcia P. Hirsch, New York (Louis A. Novellino of counsel), for State respondent.
Cornicello & Tendler, LLP, New York (Susan Baumel-
Cornicello of counsel), for Joseph Vitale and Anthony Pescatore, respondents.

Judgment, Supreme Court, New York County (Ronald A. Zweibel, J.), entered on or about February 5, 2004, which denied petitioner landlord's application to annul respondent DHCR's finding of a rent overcharge and imposition of treble damages, and dismissed the petition, unanimously affirmed, without costs.
It appears that on the October 1, 1992 commencement date of petitioner's initial one-year lease with the tenants, the apartment in question was rent stabilized by reason of the fact that petitioner was receiving J-51 benefits that were not due to expire until June 30, 1993. These circumstances required that the lease include a notice that the apartment was to become deregulated on or about June 30, 1993 (Rent Stabilization Code [9 NYCRR] § 2520.11[o]). With ample record support, DHCR found that the lease contained no such notice, and that a purported copy of the notice produced by petitioner and purporting to bear the tenants' signatures was neither signed nor received by them. DHCR further held that even if the purported copy were authentic, it would not avail petitioner in view of another provision in the lease explicitly stating that the apartment was not subject to any kind of regulation. These findings rationally support the determination that the apartment did not become destabilized after expiration of the J-51 benefits, and that petitioner willfully overcharged the tenants a free market rent. In fixing the overcharge, DHCR set a base date of January 20, 1996, four years prior to the filing of the overcharge complaint, and calculated the lawful increases forward from that date based on the free market rent that the tenants were paying immediately prior to the base date. We reject petitioner's argument that by so doing, DHCR improperly considered events surrounding the execution of the 1992 lease more than four years prior to the filing of the rent overcharge *2 complaint in January 2000, in violation of Rent Stabilization Law (Administrative Code of City of NY) § 26-516(a)(2). DHCR's consideration of events beyond the four-year period is permissible if done not for the purpose of calculating an overcharge but rather to determine whether an apartment is regulated (cf. Matter of Hargrove v DHCR, 244 AD2d 241 [1997]; Matter of Condo Units v DHCR, 4 AD3d 424 [2003]).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: MARCH 8, 2005
CLERK
Copr. (c) 2005, Randy A. Daniels, Secretary of State,
State of New York.
Anna
 
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