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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Therefore, when, as here, a tenant has presented evidence establishing a colorable claim of fraud, the court has an obligation to examine the rent charged on the base date. Indeed, in Regina, the Court confirmed that its holding in Grimm remains the law when it stated that "use of a potentially inflated base date rent, flowing from an overcharge predating the limitations and lookback period, was proper in the absence of fraud" (Regina, 35 NY3d at 360 [emphasis added]). Thus, these precedents establish that, if a tenant is successful in demonstrating fraud resulting in an unknowable, inflated or otherwise unreliable base date rent, the appropriate remedy is to apply the default formula rather than to use the improper base date rent. Furthermore, and as discussed below, since the Court of Appeals has approved of the default formula's application in cases where the base date rent was known and undisputed, a showing of fraud is sufficient to render a base date rent amount at least presumptively unreliable.

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