72A Realty Assoc. v. Lucas

In 72A Realty Assoc. v. Lucas, 28 Misc.3d 585, 902 N.Y.S.2d 791 [Civ. Ct. N.Y. Cty., 2010], the Appellate Division found that the lower courts should have calculated the rent based on the last proper registration in effect, even if the rent reverted back to a period in excess of four years prior to the date of the claim. The Appellate Division held that "in light of the improper deregulation of the apartment and given that the record does not clearly establish the validity of the rent increase that brought the rent-stabilized amount above $2,000, the free market lease amount should not be adopted, and the matter must be remanded for further review of any available record of rental history necessary to set the proper base date rate." (Lucas, 101 A.D.3d at 402). In addition, the Appellate Division held that the lower courts failed to make an adequate inquiry into the issue of whether the landlord had willfully overcharged the tenant. The Appellate Division wrote: The courts also erred to the extent they dismissed, as a matter of law, tenant's counterclaim seeking treble damages. Landlord, in its affidavit, states that in 2001, $30,000 worth of renovations to the apartment were completed, bringing the monthly rent above the $2,000 threshold. However, the record does not contain anything to support landlord's renovation claim, including, for example, bills from a contractor, an agreement or contract for work in the apartment, or records of payments for the renovations. A $1,491 monthly increase in rent is a substantial amount, and landlord did not provide sufficient information to validate the increase. Further inquiry upon remand is required to determine whether the overcharge was not willful, but rather the result of reasonable reliance on a DHCR regulation. (Id., 101 A.D.3d at 402-403).