Recitation, as required by CPLR §2219(a), of the papers considered in the review of respondent’s motion for an order granting summary judgment pursuant to CPLR 3212(b) and dismissing the petition and granting respondent leave to conduct discovery pursuant to CPLR §408.Papers NumberedNotice of Motion and Affidavits Annexed 1Order to Show Cause and Affidavits AnnexedAnswering Affidavits 2Replying AffidavitsExhibitsOther (Memorandum in Further Support of Motion) 3DECISION/ORDER Upon the foregoing papers, the Decision / Order on this motion is as follows:BackgroundPetitioner commenced the instant holdover proceeding to recover possession of apartment 3C located at 504 West 143rd Street, New York upon expiration of respondents’ lease. Polivio Gahui (“respondent”) interposed an answer dated June 19, 2018 alleging, among other things, that the proceeding must be dismissed because petitioner failed to plead the proper regulatory status of the apartment. The answer also contained a counterclaim for damages as a result of a rent overcharge. Respondent now moves for summary judgment and leave to conduct discovery so that he may pursue his rent overcharge counterclaim.DiscussionSummary judgment is a drastic remedy that will only be granted where the movant establishes his cause of action or defense “sufficiently to warrant the court as a matter of law in directing judgment” in his favor. CPLR 3212(b); Alvarez v. Prospect Hosp., 68 NY2d 320 [Ct of App 1986]. This must be done by the tender of evidentiary proof in admissible form. Zuckerman v. New York, 49 NY2d 557 [Ct App 1980]. Once this burden has been met the opponent of the motion must show the existence of issues of fact that require a trial. This too must normally be done by producing evidentiary proof in admissible form. While the opponent of the motion may be permitted to demonstrate acceptable excuse for his failure to meet this requirement Alvord & Swift v. Stewart M. Muller Constr. Co., 46 NY2d 27 [Ct App 1978], mere conclusions or expressions of hope are insufficient. Alvord v. Swift & Muller Constr. Co., 46 NY2d 276, 281-282.The crux of respondent’s argument is that petitioner unlawfully deregulated his apartment by improperly increasing the rent beyond the permitted rent stabilization guidelines. Specifically, petitioner notes that the legal rent increased $813.32 in 2004. Respondent asserts that this increase is implausible given that petitioner would have had to make $25,122.40 in improvements in order to reach this level. Moreover, assuming arguendo that the last registered rent of $1,599.05 in 2006 was proper, the legal rent still could not have reached the $2,000.00 luxury threshold even taking into account the 20 percent vacancy increase when respondent moved in 2006. Respondent concludes that the petition therefore must be dismissed because it improperly alleges that the apartment is not subject to rent regulation. Respondent also argues that based on this there is ample need to conduct discovery so that he may pursue his overcharge counterclaim.Petitioner argues that respondent cannot challenge the rent and regulatory status of the premises more than four years prior to the date of his answer because he has failed to establish that the increase was a result of fraud. In addition, respondent has provided nothing to support his allegation that it did not spend the amount necessary to justify the 2004 rent increase.Rent overcharge claims are generally subject to a four year statute of limitations. RSL §26-516 (a)(2); Thornton v. Baron, 5 NY3d 175 [Ct App 2005]. However, this four year limitation is not applicable where there is evidence of a landlord’s fraudulent scheme to remove an apartment from the protections of rent stabilization. Matter of Grimm v. DHCR, 15 NY3d 358 [Ct App 2010]. An increase in the rent alone will generally not be sufficient to establish a colorable claim of fraud, and a mere allegation of fraud, without more, is not sufficient to permit inquiry beyond the four year look back period. Matter of Grimm, supra. In contrast, a challenge to the regulatory status of a housing accommodation is not subject to a statute of limitations because apartment status is a continuous circumstance. Gersten v. 56 7th Avenue LLC, 88 AD3d 189 [1st Dept 2011].In opposing the motion petitioner conflates the two legal principles. Petitioner asserts that respondent is precluded from challenging either the regulatory status or legal rent because he failed to establish that it engaged in a fraudulent scheme to deregulate the apartment. However, since respondent seeks summary judgment based on the alleged status of the apartment he may search its entire rental history to establish his claim. The apartment registration shows that the rent increased from $679.41 to $1,492.73 upon a vacancy in 2004. The new tenant signed a one year lease therefore petitioner was entitled to a 17 percent vacancy increase which would have raised the rent by $115.50 to $794.91. In addition, since the last vacancy increase occurred in 1987 petitioner would also be entitled to a longevity increase of $47.69 ($794.91 x 0.6) bringing the total to $842.60. In order for the legal rent to reach $1,492.73 as registered, petitioner would have to have made $26,005.20 (($1,492.73-$842.60) x 40) in improvements to the apartment.Petitioner offers no proof of any such improvements nor does it even allege that improvements were made prior to the 2004 tenancy. Instead, it argues that respondent failed to support his allegation by attaching an expert’s inspection report, photos or an affidavit attesting to the condition of the premises at the time of his initial occupancy in 2006. Petitioner’s conclusory contention that “[s]urely, after sixteen (16) years of continuous occupancy the premise was in need of improvements in 2004″ is not enough to refute the claim established by respondent. Petitioner also failed to allege that it made any improvements to the apartment immediately prior to respondent’s tenancy in response to his contention that the apartment would still not be subject to rent deregulation even if the requisite repairs were made in 2004.Petitioner’s position with respect to respondent’s rent overcharge claim is equally unpersuasive. Respondent has made the requisite showing to justify looking beyond the four year statutory period. As the court in 560-568 Audubon Realty Inc. v. Rodriguez, 54 Misc. 3d 1226(A) [Civ Ct NY 2017] noted, “[i]f a landlord of a rent-stabilized apartment wished to evade the Rent Stabilization Law, one way to do so would be to register rents higher than otherwise allowed while only charging tenants a lower ‘preferential’ rent so that a tenant would have no incentive to challenge the rent.” In 2004 petitioner charged the new tenant a $1,050.00 preferential rent as opposed to the $1,492.73 legal registered rent. While the registration history notes the preferential rate, respondent’s failure to offer any explanation for the increases in 2004 and 2006 coupled with the apartment’s removal from rent stabilization increases leads the Court to find sufficient indicia of fraud. Consequently, respondent has ample need to obtain disclosure regarding the two challenged increases. New York University v. Farkas, 121 Misc2d 643 [Civ Ct NY 1983].ConclusionBased on the foregoing the motion is granted in its entirety. The petition is dismissed. The matter is marked off calendar to allow respondent the opportunity to conduct discovery regarding the rent increases in 2004 and 2006.This constitutes the decision and order of the Court.Dated: March 22, 2019New York, New York
