Aras v. B-U Realty Corp., 2023 NY Slip Op 04917 (2023)

Citation: Aras v. B-U Realty Corp., 2023 NY Slip Op 04917 (2023)
Parent Document: Aras v. B-U Realty Corp., 2023 NY Slip Op 04917 (2023)
Jurisdiction: New York (state)
Effective Date: 2023-10-03
Original Source: https://www.courtlistener.com/opinion/9430365/aras-v-b-u-realty-corp/ ↗

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The Court held that cases in which the alleged overcharges occurred prior to the enactment of the Housing Stability and Tenant Protection Act of 2019 (L 2019, ch 36, §1, part F [HSTPA]) had to be decided by the law in effect before HSTPA's effective date in 2019. Accordingly, it stated, "under pre-HSTPA law, the four-year lookback rule and standard method of calculating legal regulated rent govern in Roberts overcharge cases, absent fraud" (35 NY3d at 361).[FN3] The Court reiterated its approval of the use of the RSC's "default formula where fraud is established" (Regina, 35 NY3d at 358-359). Under the RSC, that formula is applicable in cases where "the rent charged on the base date cannot be determined" or "the base date rent is the product of a fraudulent scheme" (9 NYCRR 2522.6[b][2][i] and [iii]). In lieu of using the base date, the default formula uses "the lowest rent charged for a rent-stabilized apartment with the same number of rooms in the same building on the relevant base date" (Regina, 35 NY3d at 354-355 [internal quotation marks omitted]). The Regina Court pointed out that, in many J-51 overcharge cases, "the owners removed apartments from stabilization consistent with [DHCR] guidance" (id. at 356). As a result, the Court concluded that, [*12]"[b]ecause conduct cannot be fraudulent without being willful, it follows that the fraud exception to the lookback rule is generally inapplicable to Roberts overcharge claims" (id.).

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