You are here: / / OWNER PROPERLY FOUND RESPONSIBLE FOR REFUNDING OVERCHARGES COLLECTED BY...
, , ,

OWNER PROPERLY FOUND RESPONSIBLE FOR REFUNDING OVERCHARGES COLLECTED BY THE PRIME TENANT WHICH HAD CREATED AN ILLUSORY TENANCY TO CIRCUMVENT THE NYC RENT STABILIZATION LAW (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Singh, determined that the NYC Department of Housing and Community Renewal (DHCR) had the authority to sua sponte vacate a nonfinal order under the Rent Stabilization Code and DHCR correctly found that petitioner 333 East 49th Partnership, LP (the owner) was responsible for refunding the overcharge collected by the prime tenant, on the grounds that the prime tenant created an illusory tenancy. The opinion is complex and comprehensive and cannot be fairly summarized here:

Section 2529.9 of the Rent Stabilization Code * * * authorizes DHCR to reopen, sua sponte, a proceeding at any time upon a finding of irregularity of vital matters, fraud or illegality, upon notice to the parties … . * * *

The rent stabilization laws [RSL] are designed “to prevent exactions of unjust, unreasonable and oppressive rents and rental agreements and to forestall profiteering, speculation and other disruptive practices … . The Rent Stabilization Code expressly provides that the legal regulated rents and other requirements “shall not be evaded, either directly or indirectly, in connection with the renting or leasing or the transfer of a lease for housing accommodations” … .

An illusory tenancy exists when the prime tenant rents an apartment for the sole purpose of re-leasing it, at a profit, or otherwise subverts the protections of the RSL … .

DHCR’s finding that the owner may be held accountable for the overcharge is not irrational or arbitrary and capricious. DHCR is not restricted, as the owner argues, to only take into account whether the owner overcharged the subtenant and actually collected rent in excess of the lawful stabilized rent. Rather, DHCR may consider that the owner “derived substantial benefits from the scheme and was aware of the nature of [the prime tenant’s] activities” … . * * *

Rent Stabilization Code 2526.1(a)(1) imposes treble damages upon owners who “have collected any rent . . . in excess of the legal regulated rent” … . However, as noted above, RSL 26-511(c)(12)(e) merely states that “where a tenant violates the provisions of subparagraph (a)” with regard to overcharging a subtenant, “the subtenant shall be entitled to damages of three times the overcharge” … . DHCR’s interpretation of these statutes to impose treble damages upon the owner, under these circumstances, is rational and thus, entitled to deference … .  Matter of 333 E. 49th Partnership, LP v New York State Div. of Hous. & Community Renewal, 2018 NY Slip Op 05735, First Dept 8-9-18

LANDLORD-TENANT (RENT STABILIZATION LAW, OWNER PROPERLY FOUND RESPONSIBLE FOR REFUNDING OVERCHARGES COLLECTED BY THE PRIME TENANT WHICH HAD CREATED AN ILLUSORY TENANCY TO CIRCUMVENT THE RENT STABILIZATION LAW (FIRST DEPT))/MUNICIPAL LAW (NYC, RENT STABILIZATION LAW, OWNER PROPERLY FOUND RESPONSIBLE FOR REFUNDING OVERCHARGES COLLECTED BY THE PRIME TENANT WHICH HAD CREATED AN ILLUSORY TENANCY TO CIRCUMVENT THE RENT STABILIZATION LAW (FIRST DEPT))/RENT STABILIZATION LAW (NYC, OWNER PROPERLY FOUND RESPONSIBLE FOR REFUNDING OVERCHARGES COLLECTED BY THE PRIME TENANT WHICH HAD CREATED AN ILLUSORY TENANCY TO CIRCUMVENT THE RENT STABILIZATION LAW (FIRST DEPT))/ILLUSORY TENANT (RENT STABILIZATION LAW, OWNER PROPERLY FOUND RESPONSIBLE FOR REFUNDING OVERCHARGES COLLECTED BY THE PRIME TENANT WHICH HAD CREATED AN ILLUSORY TENANCY TO CIRCUMVENT THE RENT STABILIZATION LAW (FIRST DEPT))

You might also like
Summary Judgment May Be Based Upon an Unpled Affirmative Defense/Oral Waiver May Be Effective in the Face of a “Written Waiver” Requirement in the Contract
BECAUSE PLAINTIFF HAD TO STAND ON THE GUARDRAILS OF THE MANLIFT TO REACH WHAT HE WAS WORKING ON, THE MANLIFT WAS NOT APPROPRIATE EQUIPMENT; PLAINTIFFS WERE ENTITLED TO SUMMARY JUDGMENT ON THE LABOR LAW 240(1) CAUSE OF ACTION (FIRST DEPT).
NO OBLIGATION TO CONTINUOUSLY MOP UP TRACKED IN WATER.
Intervention Not Available to Vacate a Default Judgment—Default Judgment is Not on the Merits and Therefore Has No Res Judicata Effect on Putative Intervenors
DEFENDANT RAILROAD’S MOTION FOR SUMMARY JUDGMENT IN THIS FEDERAL EMPLOYERS’ LIABILITY ACT (FELA) ACTION BY A RAILROAD EMPLOYEE WHO WAS ASSAULTED BY A PASSENGER PROPERLY DENIED (FIRST DEPT).
MOLINEUX/SANDOVAL HEARING IN THE HARVEY WEINSTEIN SEXUAL MISCONDUCT PROSECUTION WAS PROPERLY CLOSED TO THE PUBLIC AND THE RECORD OF THE HEARING WAS PROPERLY SEALED, NEWS-MEDIA COMPANIES’ PETITION TO UNSEAL THE RECORD DENIED (FIRST DEPT).
FAMILY COURT SHOULD NOT HAVE DISMISSED MOTHER’S PETITION FOR CUSTODY MODIFICATION WITHOUT HOLDING A HEARING AND INTERVIEWING THE CHILD.
WHETHER PLAINTIFF INHALED ENOUGH ASBESTOS TO CAUSE HIS CANCER WAS THE SUBJECT OF COMPETING SIMULATION STUDIES; PLAINTIFF’S EXPERT EVIDENCE WAS NOT SUFFICIENT TO DEFEAT DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (FIRST DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2025 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT ON HIS LABOR LAW 240 (1) AND 241... CHILD’S ATTORNEY HAD STANDING TO OBJECT TO THE SUPPORT MAGISTRATE’S...