DECISION/ORDER This nonpayment proceeding was commenced in May 2016. The petition alleged that the apartment was rent stabilized and that the monthly rent was $2000.00. Respondent answered by counsel and raised a defense and counterclaim of rent overcharge. When respondent moved to dismiss the proceeding, and for discovery on her overcharge counterclaim, petitioner asserted that the apartment was not rent stabilized and that the allegation to the contrary in the petition was an inadvertent pleading error. Specifically, petitioner asserted that the apartment was high rent vacancy decontrolled in 2011 before respondent moved in. By order dated December 14, 2018, Hon. Kimon Thermos of this court dismissed the proceeding without prejudice, on the grounds that the rent demand was not a good faith approximation by petitioner of the amount owed. Judge Thermos also granted respondent’s motion for discovery on her overcharge counterclaim, finding that respondent had made a colorable claim of fraud and was therefore entitled to examine documents dated more than four years prior to the assertion of her claim. See Grimm v. DHCR, 15 NY 3d 358 (2010). Judge Thermos found that respondent’s claim was asserted on August 10, 2017 when respondent served her amended answer. Judge Thermos’s order did not decide the regulatory status of the apartment. After completion of discovery, including a motion to compel, the counterclaim was referred to me for trial in January 2020. The trial, which consisted of stipulated documents and the testimony of the respondent only, was held on February 7, 2020. The time for submission of post-trial memos was extended eventually to May 29, 2020, first due to the pandemic and then so that the parties could address the significance of Regina Metropolitan v. DHCR, 2020 NY Slip Op. 02127, decided by the Court of Appeals on April 4, 2020. Petitioner did not articulate a position on the rent regulatory status of the building either at trial or in its post-trial submission. At trial, respondent established the following facts, which petitioner did not dispute. In 2008 the apartment was registered with DHCR as rent stabilized, at a monthly rent of $850.00. Petitioner had a two year lease with Victoria Felicia Mora running from February 1, 2006 through January 31, 2008 at $850.00 per month. The 2009 registration showed a regulated rent of $1600.00 and a “preferential” rent of $1425.00. Petitioner produced a lease running from April 1, 2009 to April 30, 2010 showing the same figure. This lease contained no rent stabilization riders and no explanation of how the rent was calculated. The 2010 registration reflects the same lease and the same figures. In 2011 petitioner registered the apartment with DHCR at a monthly rent of $2100.00 with a preferential rent of $1325.00. However, the lease petitioner produced for this period, running from June 1, 2010 through May 31, 2011, stated clearly that the apartment was not rent stabilized and that it was a “free market apartment.” This lease also included no rider containing the calculation of the rent or showing how the apartment was taken out of regulation. The apartment was not registered after 2011. Respondent’s first lease ran from August 1, 2011 through July 31, 2012 at a monthly rent of $1500.00. This lease also stated clearly that the apartment was not regulated and that it was a “free market apartment.” This lease also contained no riders explaining how the apartment came to be deregulated or how the rent was calculated. Next, respondent signed a “lease extension covering the period from August 1, 2012 through July 31, 2013, which again stated that this was a “free market apartment”, that the rent was $2500.00 per month, and that respondent was given a “rent concession” and would have to pay only $1530.00 per month. This second lease also said, though, that the rent would rise to $2500.00 on August 1, 2013. The respondent’s third lease was a rent stabilized renewal lease at $2550.00 per month with a preferential rent of $1560.00. This lease had the riders required by rent stabilization. During the term of this third lease, petitioner sent respondent several other leases for the same period with higher rents and higher preferential rents, but respondent did not sign any further leases. Petitioner did not offer any additional documents or call any witnesses at the trial. When this litigation began, examination of the rent history more than four years prior to the filing of a rent overcharge claim was permitted only if the rent regulatory status of the apartment was at issue (East-West Renovating Co. v. DHCR, 16 AD 3d 166 (1st Dept. 2005) or if the tenant articulated a colorable claim of a fraudulent scheme to deregulate the apartment (Grimm). With the passage of the HSTPA of 2019, there was no longer any limit on the look-back period. However, the decision by the Court of Appeals in Regina Metro v. DHCR, supra., restored the need to meet the pre-HSTPA standard, by finding that the new statute of limitations contained in the HSTPA could not be applied to claims on which the old statute of limitations had expired prior to the passage of the new law. Here, respondent amply established that the rent charged for the subject apartment on the base date was affected by a fraudulent scheme to deregulate the apartment. None of the leases after 2008 contained the required riders showing how the new rent was calculated or what factors justified the deregulation of the apartment. Petitioner and its predecessors deliberately hid the regulatory status of the apartment from their tenants by claiming the apartment was deregulated when it was actually registered with the DHCR and by omitting the required riders that would have demonstrated to a tenant that the apartment was still subject to regulation. Petitioner offered no r=evidence at the trial that would have justified deregulation either in 2010 when the rent charged was $2100.00, still below the deregulation threshold in effect at that time, or in 2011 when respondent signed her first lease. Petitioner offered no evidence to rebut the presumption of willfulness. Therefore, respondent is entitled to treble damages. Under Regina Metro, the legal regulated rent in this case can be established only by application of the default formula. This was not the state of the law at the time of trial. Therefore, the court must reopen the trial to permit respondent and petitioner to present additional evidence relevant to the default formula. Because the court is not currently conducting trials in this county, the case is restored to court’s virtual calendar on September 14, 2020 at 10:00 a.m. for a conference on scheduling of a further trial. Dated: July 13, 2020
