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 "very purpose" of the system created by the RSL, first enacted in 1969, is to "preserv[e] a stock of affordable housing" (Thornton, 5 NY3d at 182), an issue which continues to be of vital public concern.[FN12] As the Regina Court noted, the relevant inquiry in this context is whether "the owner engaged in a fraudulent scheme to deregulate the apartment" (35 NY3d at 354 [emphasis added]; see Grimm, 15 NY3d at 367 ["fraudulent scheme to destabilize the apartment"]) or fraudulently attempted to increase the rent beyond what is permitted under the RSL (see 435 Cent. Park W. Tenant Assn. v Park Front Apts., LLC, 183 AD3d at 510-511 [default formula applies to fraudulent scheme to overcharge]). In other words, the issue is whether the owner has fraudulently removed or attempted to remove the apartment from lawful coverage, not whether a fraud has been perpetrated on the tenant—although, where established, both may be true (see e.g. Thornton, 5 NY3d at 182 [recognizing that circumvention of the RSL comes "at the expense of the public"]). Pursuant to RSL 26-517, owners of covered buildings are required, as an essential component of the rent regulation system, to register regulated apartments with DHCR annually, setting forth the rent charged on the registration date. Accordingly, the interests of both the public, as represented by DHCR, and a particular tenant are adversely affected by fraudulent deregulation.

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