N.Y. Comp. Codes R. & Regs. tit. 9 § 2506.8

Current through Register Vol. 46, No. 36, September 4, 2024

Section 2506.8 - Determination of legal regulated rents; penalties; fines; assessment of costs; attorney's fees; rent credits; where the proceeding is commenced on or after June 14, 2019

(a) Definitions.

(1) Base Date: For the purposes of this section, the Base Date shall be the date of the most recent reliable annual rent registration statement, filed and served upon a tenant six or more years prior to the filing of a complaint of overcharge or the initiation of a proceeding to determine the legal regulated rent of an apartment. Any registration statement filed contemporaneously with a certification of service shall be presumed to have been served upon the tenant in occupancy. In no event shall the base date be prior to June 14, 2015. Absent an exception set forth in 2506.1, if no base date can be determined subsequent to June 14,2015, the base date shall be June 14, 2015.

(2) Reliable rent registration statement: A rent registration shall be considered to be reliable if, prior to the filing of such registration statement, and subsequent to June 14, 2015, the rent history contains no unexplained increases in the rent.

(b) The division shall consider all available reasonably necessary evidence when making a determination as to the reliability of a rent registration statement, including but not limited to:

(1) any rent registration or other records filed with the state division of housing and community renewal, or any other state, municipal or federal agency, regardless of the date to which the information on such registration refers;

(2) any order issued by any state, municipal or federal agency;

(3) any records maintained by the owner or tenants; and

(4) any public record kept in the regular course of business by any state, municipal or federal agency.

(c) The division shall set the legal regulated rent by adding any lawful rent increases and adjustments to the rent on the base date.

(d) The division shall examine the rent prior to the base date and subsequent to June 14, 2015 to make a determination as to:

(1) whether the legality of a rental amount charged or registered is reliable in light of all available evidence including, but not limited, to whether an unexplained increase in the registered or lease rents, or a fraudulent scheme to destabilize the housing accommodation, rendered such rent or registration unreliable.

(2) whether an accommodation is subject to the emergency tenant protection act or the rent stabilization law;

(3) whether an order issued by the division of housing and community renewal or by a court, including, but not limited to an order issued pursuant to section 2503.4(a) of this Title, or any regulatory agreement or other contract with any governmental agency, and remaining in effect within six years of the filing of a complaint pursuant to this section, affects or limits the amount of rent that may be charged or collected;

(4) whether an overcharge was or was not willful;

(5) whether a rent adjustment that requires information regarding the length of occupancy by a present or prior tenant was lawful;

(6) the existence or terms and conditions of a preferential rent, or the propriety of a legal registered rent during a period when the tenants were charged a preferential rent;

(7) the legality of a rent charged or registered immediately prior to the registration of a preferential rent; or

(8) the amount of the legal regulated rent where the apartment was vacant or temporarily exempt on the date six years prior to a tenant's complaint.

(e) The division shall examine the rent prior to June 15, 2015, pursuant to section 2506.1 of this Part.

(f) A tenant may file a complaint of overcharge at any time.

(g) An owner may, prior to the issuance of an order determining the existence of an overcharge, file late registration statements. Provided that increases in the legal regulated rent were lawful except for the failure to file a timely registration, the owner, upon the service and filing of a late registration, shall not be found to have collected an overcharge at any time prior to the filing of the late registration.

(h)

(1) Any affected tenant shall be given notice of and an opportunity to commence a subsequent proceeding or an opportunity to join in any proceeding commenced by the division pursuant to this section.

(2) Where a complainant pursuant to this subdivision vacates the housing accommodation, and the division continues the proceeding, the division shall give any affected tenant notice of and an opportunity to commence a subsequent proceeding or an opportunity to join in such proceeding.

(i) Damages

(1) Any owner who is found by the division, after a reasonable opportunity to be heard, to have collected any rent or other consideration in excess of the collectable rent shall be ordered to pay to the tenant a penalty equal to three times the amount of such excess, except as provided in subdivision (f) of this section. If the owner establishes by a preponderance of the evidence that the overcharge was not willful, the division shall establish the penalty as the amount of the overcharge, plus interest, which interest shall accrue from the date of the first overcharge on or after the base date, at the rate of interest payable on a judgment pursuant to section 5004 of the Civil Practice Law and Rules, and the order shall direct such a payment to be made to the tenant.

(2) Any recovery of overcharge penalties, including treble damages, where appropriate, shall be limited to the six years preceding the complaint, provided, however, that there shall be no recovery of treble damages for overcharges that occurred prior to June 15, 2017, and no recovery of damages for overcharges that occurred prior to June 15, 2015. After a complaint of rent overcharge has been filed and served on an owner, the voluntary adjustment of the rent and/or the voluntary tender of a refund of rent overcharges shall not be considered by the division as evidence that the overcharge was not willful.

(3) A penalty of three times the overcharge may not be based upon an overcharge having occurred prior to April 1, 1984.

(4)

(i) Complaints filed prior to April 1, 1984 shall be determined in accordance with the ETPA and this Title provisions in effect on March 31, 1984, except that an overcharge collected on or after April 1, 1984 may be subject to treble damages pursuant to this section.

(ii) Complaints filed on or after April 1, 1984 and prior to June 14, 2019 shall be determined pursuant to section 2506.1 of this Part.

(5) The division shall determine the owner's liability between or among two or more tenants found to have been overcharged during their particular occupancy of a housing accommodation, and at its discretion, may require the owner to make diligent effects to locate prior tenants who are not parties to the proceeding, and to make refunds to such tenants or pay the amount of such penalty as a fine.

(6) An owner who is found to have overcharged by the division shall be assessed and ordered to pay as an additional penalty the reasonable costs and attorney's fees of the proceeding, and except where treble damages are awarded, interest from the date of the overcharge occurring on or after April 1, 1984, at the rate of interest payable on a judgment pursuant to section 5004 of the Civil Practice Law and Rules.

(7) A tenant may recover any overcharge penalty established by the division by deducting it from the rent due to the present owner at a rate not in excess of 20 percent of the amount of the penalty for any one month's rent. If no such rent credit has been taken, the order of the division awarding penalties may be entered, filed and enforced by a tenant in the same manner as a judgment of the Supreme Court, on a form prescribed by the division, provided that the amount of the penalty exceeds $1,000 or the tenant is no longer in possession. Neither of these remedies are available until the expiration of the period in which the owner may institute a proceeding pursuant to Part 2510.12 of this Title.

(8) Responsibility for overcharges.

(i) For overcharges collected prior to April 1, 1984, an owner will be held responsible only for his or her portion of the overcharges, in the absence of collusion or any relationship between such owner and any prior owners.

(ii)

(a) For overcharge complaints filed or overcharges collected on or after April 1,1984, a current towner shall be responsible for all overcharge penalties, including penalties based upon overcharges collected by any prior owner. However, in the absence of collusion or any relationship between such owner and any prior owner, where no records sufficient to establish the legal regulated rent were provided at a judicial sale, or such other sale effected in connection with, or to resolve, in whole or in part, a bankruptcy proceeding, mortgage foreclosure action or other judicial proceeding, an owner who purchases upon or subsequent to such sale shall not be liable for overcharges collected by any owner prior to such sale, and treble damages upon overcharges that he or she collects which result from overcharges collected by any owner prior to such sale. An owner who did not purchase at such sale, but who purchased subsequent to such sale, shall also not be liable for overcharges collected by any prior owner subsequent to such sale to the extent that such overcharges are the result of overcharges collected prior to such sale.

(b) Court-appointed Receivers. A Receiver who is appointed by a court of competent jurisdiction to receive rent for the use or occupation of a housing accommodation shall not, in the absence of collusion or any relationship between such Receiver and any owner or other Receiver, be liable for overcharges collected by any owner or other Receiver, and treble damages upon overcharges that he or she collects which result from overcharges collected by any owner or other Receiver, where records sufficient to establish the legal regulated rent have not been made available to such Receiver. Penalties pursuant to this subdivision shall be subject to the time limitations set forth in paragraph (2) of subdivision (a) of this section.

(9) This subdivision shall not be construed to entitle a tenant to more than one refund for the same overcharge.

(j) Where no rent history for the housing accommodation is available, the rent shall be determined in the manner set forth in Section 2509.2 of this Title.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 2506.8

Adopted New York State Register November 8, 2023/Volume XLV, Issue 45, eff. 11/8/2023