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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In Regina, the Court of Appeals drew a sharp distinction between the circumstance of the landlords in the cases before it who had deregulated apartments in reliance on DHCR guidance on J-51 benefits and whose tenants had not come forward with evidence of fraud, from earlier cases in which the Court had found fraud (Conason, 25 NY3d 1 [default formula applied where landlord was found after trial to have registered a fictitious prior tenant in order to unlawfully inflate plaintiffs' "legal" rent]; Grimm, 15 NY3d 358 [vacating DHCR's denial of overcharge petition and remanding to consider fraud allegations and the reliability of the base date rent where the landlord had significantly increased the rent, offered leases without a rent stabilization rider, required tenants to make improvements at their own expense or pay increased rent, and failed to register the apartment for several years until after service of the complaint]; Thornton, 5 NY3d at 180 [landlord's creation of illusory tenancies to raise rents above luxury decontrol thresholds [*14]and lack of "reliable rent records" required application of the default formula to overcharge claim]). Indeed, Judge Kaye pointed out in Thornton that to do otherwise would "reward[] the owner's wrongdoing." By drawing the distinction between deregulation done in good faith and that based on a fraudulent scheme, Regina was careful not to overrule those cases, or even limit them, and thus affirmed the principles decided by them. As this Court held in Montera,

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