This article is the second in a series examining developments in rent overcharge litigation over the past 10 years in the Appellate Division, First Department. It is in three parts because the First Department has issued more decisions on this topic than any other appeals court. It was observed that the First Department’s rulings since 2009 have reviewed: (1) Roberts overcharge claims; (2) Grimm overcharge claims; (3) “regulatory status” claims; (4) Article 78 petitions; and (5) other miscellaneous legal issues. This article discusses decisions from the second and third categories.

‘Grimm’-Based Rent Overcharge Claims

A “Grimm-based claim” is an allegation of an overcharge caused by a landlord’s fraudulent deregulation of an apartment to impose an excessively high rent. Matter of Grimm v. DHCR, 15 N.Y.3d 358 (2010) involved a landlord’s “illusory prime tenancy” scheme. It was followed by Conason v. Megan Holding, 25 N.Y.3d 1 (2015), wherein the Court of Appeals held that it is appropriate to examine an apartment’s rental history from before the four-year statute of limitations that governs rent overcharge claims to determine whether the apartment’s “base date rent” is also the apartment’s “lawful regulated rent” whenever a tenant has “alleged substantial evidence pointing to the setting of an illegal rent in connection with a stratagem devised … to remove tenants ’apartment from the protections of rent stabilization.” This holding encompasses many types of fraudulent deregulation schemes. Many of the First Department’s post-Roberts opinions on Grimm-based overcharge claims are simply terse rulings that there was, or was not, sufficient evidence of “a fraudulent deregulation scheme” to justify a “lookback.” Some decisions provided more detailed appellate guidance, however.

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