ADDITIONAL CASES Hussain, Chaudhry G., Claimant(s), v. Butt, Humayun Q., Defendant(s); 2752/2019-11 OPINION Upon consent of both parties, a trial was held before an arbitrator of the Civil Court on November 26, 2019. (22 NYCRR §208.41[n][2]). The claimant, Humayun Q. Butt (hereinafter, “Butt”), sought damages in the amount of $5,000.00 for alleged rent overcharges collected by the defendant, Chaudhry G. Hussain (hereinafter “Hussain”), who in turn counterclaimed against Butt for an alleged unpaid cash loan in the amount of $5,000.00. Based upon the credible evidence adduced at trial, Butt is awarded $5,000.00 for his claim, and Hussain’s counterclaim is dismissed. The Overcharge Claim It is undisputed that A. Anwar and Hussain rented 37-06 72nd Street, Apartment 1A (hereinafter, “the apartment”), from Skaros Realty, LLC. Hussain did not have the original lease but presented a 2015 lease renewal, establishing that the apartment was subject to the rent stabilization laws. The lease was renewed by A. Anwar and Hussain in 2013 for a period of two years. The lease was renewed again in 2015 for another two-year period. The lease was renewed again in 2017 for another two-year period. The 2015 lease renewal showed that the legal rent for the two-year period that commenced on May 1, 2013 was $1,317.18 and was increased to $1,353.40 during the two-year period that commenced on May 1, 2015. As such, legal rent for the one-year period that commenced on May 1, 2012 would have been $1,266.52,1 and for the two-year period that commenced on May 1, 2017, the legal rent would have been $1,380.47.2 Butt testified that he moved into the apartment with Hussain sometime in May of 2012. It is unclear if A. Anwar ever resided in the apartment. At the time that Butt moved into the rent stabilized one-bedroom apartment, he testified that Hussain lived there with three other adult men for a total of five people living in the apartment. In 2013, Hussain sublet the premises to an additional two adult men for a total of seven people living in the apartment. From 2013 through 2016, the specific subtenants rotated in and out of the premises; however, the number of subtenants remained consistently at seven. In 2017, Hussain sublet to an additional two adult men for a total of nine people living in the apartment. With the addition of two more adults, the living arrangement became so overcrowded that Butt awoke one night to find someone’s foot pressing on his neck. Butt moved out by the end of September 2017. Butt testified that he paid $360.00 per month in 2012, $375.00 per month in 2013 and 2014, $385.00 per month in in 2015 and 2016, and $395.00 per month in 2017. Butt was unaware of the amount paid by the other subtenants each month. However, Hussain produced signed rental agreements with some of the other subtenants in the amount of $439.06 per month, and he testified that all the other subtenants paid the same amount of rent. Hussain was unable to remember how many subtenants lived in the apartment at any given time and asserted that it was “maybe three.” He was only able to name two of the subtenants who resided in the apartment from 2012 through 2017: Abdul Rasheed and Naveed Ahmad. Incredibly, Hussain could not even recall the full name of the co-tenant, A. Anwar. Hussain averred that the subtenants were not his relatives but were merely friends or acquaintances. There was no evidence that any of the subtenants were related to A. Anwar. Hussain did not present written authorization from Skaros Realty, LLC, allowing him to sublet the apartment, and Hussain did not testify that he ever sought such permission from the landlord. Hussain collected $1,677.18 per month in 2012, $2,570.30 per month in 2013 and 2014, $2,580.30 per month in 2015 and 2016, and $3,458.42 per month through September 2017 from the subtenants. Simply put, from 2012 to 2017, Skaros Realty, LLC, was entitled to collect a lawful rent totaling $86,194.51 from the lawful tenants of the apartment, namely A. Anwar and Hussain. During that same period, Hussain collected $161,032.66 from the subtenants for a profit of $74,838.15. While a landlord has a right to bring an action to recover possession of the premises from a tenant for improperly profiting from systematically overcharging subtenants for a substantial period (Goldstein v. Lipetz, 150 AD3d 562 [1st Dep't 2017], app dis sub nom Pearce v. Lipetz, 30 NY3d 1009[2017]), an occupant that subleases from such a tenant may also seek financial damages for said rent overcharge pursuant to RSC §2525.7 (Bryant v. Carey, 196 Misc.2d 412 [Civ. Ct., NY Co. 2003]). A subtenant is overcharged when she pays more than her proportional share of the legal rent for which the tenant is obligated to pay a landlord. The subtenant’s proportional share is determined by dividing the number of tenants on the lease plus subtenants occupying the premises, minus any members of a tenant’s immediate family (RSC §2525.7[b]). The legal rent for the one-year period that commenced on May 1, 2012 was $1,266.52. The credible evidence shows that, at a minimum, there were two tenants plus three subtenants in possession.3 Butt’s proportional share was $253.30 per month. During this same period, Butt paid $360.00 per month and was overcharged $106.70 for each month, in the total sum of $1,280.40. The legal rent for the two-year period that commenced on May 1, 2013 was $1,317.18. The credible evidence shows that, at a minimum, there were two tenants plus five subtenants in possession. Butt’s proportional share was $188.17. During this same period, Butt paid $375.00 per month and was overcharged $186.83 for each month, in the total sum of $4,483.92. The legal rent for the two-year period that commenced on May 1, 2015 was $1,353.40. The credible evidence shows that, at a minimum, there were two tenants plus five subtenants in possession. Butt’s proportional share was $193.34. During this same period, Butt paid $385.00 per month and was overcharged $191.66 for each month, in the total sum of $4,599.84. The legal rent for the five-month period that commenced on May 1, 2017 and ending on September 30, 2017 was $1,380.47. The credible evidence shows that, at a minimum, there were two tenants plus seven subtenants in possession. Butt’s proportional share was $153.39. During this same period, Butt paid $395.00 per month and was overcharged $241.61 for each month, in the total sum of $1,208.05. Butt has established damages totaling $11,572.21, which constitutes reimbursement for the overpayment. However, the court is constrained to award damages no greater than the current jurisdictional limit of Small Claims Court (NYCCCA §1801). Accordingly, the claimant, Humayun Q. Butt, is awarded $5,000.00 in damages for rent overcharges by the defendant, Chaudhry G. Hussain. The Loan Claim Hussain asserts that he loaned Butt $5,000.00 in cash. Hussain’s demeanor and lack of candor renders his testimony regarding the counterclaim entirely incredible. Hussain did not testify to the date when the loan was made, the circumstances under which the loan was made, or terms of repayment for the loan. He did not present a written loan agreement or any financial records in support of his claim. The only other evidence Hussain presented was a witness, Mohamed A. Ahmad, who testified that he knew both Hussain and Butt and that he knew that Hussain loaned money to Butt. Mr. Ahmad did not witness the exchange of money or hear an agreement to repay the money. Mr. Ahmad’s only basis of knowledge regarding the loan was that Hussain stated to him that Butt had borrowed money. Such a self-serving hearsay statement is insufficient to establish the existence of a loan. In opposition, Butt denied ever borrowing money from Hussain and asserted that the counterclaim was only brought in retaliation for the initial overcharge claim. The credible evidence does not establish the existence of a loan but does support a reasonable inference that Hussain brought the unpaid loan claim in retaliation for Butt’s overcharge claim. Accordingly, the counterclaim raised by Chaudhry G. Hussain is dismissed. The foregoing constitutes the opinion of the arbitrator. Dated: November 26, 2019 Jamaica, New York
