Opinion
9163 Index 450153/14
08-20-2020
Odilson FUENTES, Plaintiff–Respondent, v. KWIK REALTY LLC, Defendant–Appellant.
Horing Welikson Rosen & Digrugillers, P.C., Williston Park (Richard T. Walsh of counsel), for appellant. Northern Manhattan Improvement Corp. Legal Services, New York (Matthew J. Chache`re of counsel), for respondent.
Horing Welikson Rosen & Digrugillers, P.C., Williston Park (Richard T. Walsh of counsel), for appellant.
Northern Manhattan Improvement Corp. Legal Services, New York (Matthew J. Chache`re of counsel), for respondent.
Manzanet–Daniels, J.P., Gische, Webber, Moulton, JJ.
Order, Supreme Court, New York County (Ellen Coin, J.), entered October 19, 2017, amending a prior order, same court and Justice, entered October 17, 2017, which, insofar as appealed from, granted plaintiff partial summary judgment on his claim for rent overcharge and declared that his initial lease was subject to rent stabilization, solely to the extent of referring the matter to a referee or judicial hearing officer to hear and report at the earliest availability, unanimously modified, on the law, to deny plaintiff summary judgment on his claim for rent overcharge, and to vacate the order of reference, and otherwise affirmed, without costs.
Plaintiff Odilson Fuentes is the tenant of apartment five in the building located at 520 West 183rd Street in New York, NY, owned by defendant Kwik Realty LLC. The building consists of 48 residential apartments, and is subject to the Rent Stabilization Law.
By lease dated February 15, 2010 for a one-year term from February 1, 2010 to January 31, 2011, plaintiff agreed to pay defendant a preferential rent of $1,300 per month, although the listed unit charge was $2,200 per month. This lease and the later leases were Blumberg form leases that bore the notation "EXEMPT UNIT" in handwriting. The leases contained no references to rent stabilization and no rent stabilization riders were included with the leases.
By lease dated November 10, 2010 for a one-year term from February 1, 2011 to January 31, 2012, plaintiff agreed to pay defendant a preferential rent of $1,350 per month, although the listed unit charge was again $2,200 per month. By yet another lease dated November 28, 2011 for a one-year term from February 1, 2012 to January 31, 2013, plaintiff agreed to pay defendant a preferential rent of $1,400 per month, although this time, the listed unit charge was now $2,500 per month. Finally, by lease dated December 5, 2012 for a one-year term from February 1, 2013 to January 31, 2014, plaintiff agreed to pay defendant a preferential rent of $1,450 per month, although the listed unit charge was $2,600 per month. On or about December 5, 2013, defendant sent plaintiff a letter stating that his lease would not be renewed and demanding that plaintiff vacate the apartment "due to hazardous conditions." Plaintiff continued to pay his monthly rent of $1,450 to defendant.
Plaintiff commenced this action on January 27, 2014, asserting that defendant illegally deregulated the apartment and overcharged his rent. The complaint sought a declaratory judgment declaring plaintiff to be a rent-stabilized tenant and his prior leases to be illegal and fraudulent, and ordering defendant to offer plaintiff a proper, rent-stabilized lease. Plaintiff also sought declaratory and injunctive relief declaring the legal rent to be the last amount validly registered, $628.34, until defendant registered the apartment with the Division of Housing and Community Renewal (DHCR). Plaintiff also sought money damages and punitive damages for the overcharges, including interest, as well as his attorneys' fees under Real Property Law § 234 and the Rent Stabilization Law and Code.
The motion court properly held that plaintiff was entitled to a rent-stabilized lease. Plaintiff, as the first nonstabilized tenant of the apartment, was entitled to the notices required by RSL § 26–504.2(b) and RSC § 2522.5(c)(3). Defendant was required to give written notice to the first tenant of the apartment after the apartment became exempt from rent stabilization, indicating the last regulated rent, the reason that the apartment is no longer subject to rent stabilization, and how the rent amount is computed (RSC § 2522.5[c][1] ). Where an owner fails to provide the rent stabilization rider or requested documentation, "the owner shall not be entitled to collect any adjustments in excess of the rent set forth in the prior lease unless the owner can establish that the rent collected was otherwise legal" (RSC § 2522.5[c][3] ).
We find, however, that the motion court improperly awarded summary judgment to plaintiff as to liability and referred the matter to a referee to hear and report on damages, if any. Plaintiff failed to present evidence of rent overcharge four years prior to the commencement of the lawsuit in January 2014. While rental history may be examined beyond four years to determine rent-stabilized status, it may not be used for the purpose of calculating an overcharge (see East W. Renovating Co. v. New York State Div. of Hous. & Community Renewal, 16 A.D.3d 166, 791 N.Y.S.2d 88 [1st Dept. 2005] ). Rent overcharge claims are generally subject to a four-year statute of limitations (Rent Stabilization Law § 26–516[a][2]; see also CPLR 213–a ; Regina Metro. Co., LLC v. New York State Div. of Hous. and Community Renewal, 35 N.Y.3d 332, ––– N.Y.S.3d ––––, ––– N.E.3d ––––, 2020 WL 1557900, 2020 N.Y. Slip Op. 02127 [2020] ). Parties may look back farther than four years, where there is evidence of fraudulent conduct on the part of the landlord (see Matter of Grimm v. State of N.Y. Div. of Hous. & Community Renewal Off. of Rent Admin., 15 N.Y.3d 358, 362, 912 N.Y.S.2d 491, 938 N.E.2d 924 [2010] ). Here, plaintiff failed to set forth sufficient indicia of fraud to warrant consideration of the rental history beyond the four-year statutory period from January 2014 (see id. at 366–367, 912 N.Y.S.2d 491, 938 N.E.2d 924 ). The motion court improperly concluded that defendant's failure to maintain any records of the alleged individual apartment improvements (IAIs) and its failure to provide notices under the Rent Stabilization Code relating to the last legal, regulated rent, were evidence of "an attempt to circumvent the Rent Stabilization Law." While defendant failed to provide notices, defendant registered the apartment with DHCR. And, although, defendant concededly failed to maintain records of the alleged IAIs, there is no requirement under the statute that suchrecords be maintained indefinitely (see Thornton v. Baron, 5 N.Y.3d 175, 181, 800 N.Y.S.2d 118, 833 N.E.2d 261 [2005], citing Matter of Gilman v. New York State Div. of Hous. & Community Renewal, 99 N.Y.2d 144, 149, 753 N.Y.S.2d 1, 782 N.E.2d 1137 [2002] ).
The Decision and Order of this Court entered herein on December 3, 2019 ( 178 A.D.3d 451, 114 N.Y.S.3d 324 [1st Dept. 2019] ) is hereby recalled and vacated (see M–1883, ––– N.Y.3d ––––, 130 N.Y.S.3d 16, ––– N.E.3d –––– decided simultaneously herewith).