Reichenbach v. Jacin Invs. Corp., 2025 NY Slip Op 02023 (2025)

Citation: Reichenbach v. Jacin Invs. Corp., 2025 NY Slip Op 02023 (2025)
Parent Document: Reichenbach v. Jacin Invs. Corp., 2025 NY Slip Op 02023 (2025)
Jurisdiction: New York (state)
Effective Date: 2025-04-03
Original Source: https://www.courtlistener.com/opinion/10491002/reichenbach-v-jacin-invs-corp/ ↗

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Thus, we find that the tenants established a colorable fraudulent scheme to deregulate apartments 2J, 3D, 4C, and 5J based on the evidence in the record. The rent increases in the DHCR rent history for each apartment were haphazard, unsupported, and would have required numerous instances of IAI and MCI work while these tenants were in occupancy to reach the rents registered. Because the tenants swore in their affidavits that no work had been performed in the building or in their apartments to justify those increases during their tenancies, the record provided ample basis for the court to find a fraudulent scheme to deregulate apartments throughout the building, and the owners failed to rebut this showing. That apartments 2J and 3D had not yet reached the high-rent vacancy deregulation threshold before the law changed does not overcome the fraudulent nature of the scheme (435 Cent. Park W. Tenant Assn. v Park Front Apts., LLC, 183 AD3d 509, 510-511 [1st [*4]Dept 2020] ["In the event it is proven that defendant engaged in a fraudulent rent overcharge scheme to raise the pre-stabilization rent of each apartment, tainting the reliability of the rent on the base date, then the lawful rent on the base date for each apartment must be determined by using the default formula devised by DHCR"]). Contrary to the owners' contention, the tenants specifically pleaded the fraudulent scheme in the complaint, the record supports the motion court's conclusion that the tenants were intentionally overcharged, which rendered their base date rents unreliable (9 NYCRR 2522.6[b][2], [3]), and the owners failed to raise a question of fact necessitating a trial on whether the default formula applies here.

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