Tenants Lisa and Goran Tomic entered into possession of apartment #4 at 92 East Broadway, New York, New York 10002 on May 2007 pursuant to a fair market residential lease. The tenants’ initial rent was $1,700.00 per month, increasing throughout the years to $1, 872.00 per month. The building changed owners in 2014. The Tomics discovered that the apartment was rent stabilized and the last registered rent was $267.23 per month. The building owners allege that renovations coupled with statutory rent increases increased the apartment’s rent beyond $2,000.00. Thus, the apartment was deregulated. The Tomics challenged their landlord’s contention that over $70,000 of renovations were completed in the apartment to increase the legally regulated rent beyond $2,000 per month. The tenants commenced the instant proceeding alleging that the apartment is still subject to Rent Stabilization Law and that they were being overcharged. Both parties moved for summary judgment, however the Court denied both parties’ requests.The Tomics filed a motion to renew the court’s decsion based upon new facts unknown the tenants. The Tomics discovered a letter from the landlord’s attorney stating that the landlord is willing to reimburse the Tomics for rent overcharges in the amount of $741.00 for the years 2011 through 2015 based on the facts that the landlord was unable to prove that the alleged improvements were actually made to the apartment, because the landlord did not receive any documentation from the previous building owner regarding the improvements.The court held that a tenant may assert a claim for liability against a new owner for the fraudulent deregulation of an apartment by a prior owner based on a theory of carry-over liability if the tenant alleges the fraud committed by the prior owner in the complaint. The court granted the Tomics leave to amend their complaint to allege that the previous building owners engaged in a fraudulent scheme to remove the apartment from rent stabilization. Such allegations would be sufficient to assert carry-over liability against the current owner under the Rent Stabilization Code for any fraud perpetrated by the previous owner.
Link to case:http://law.justia.com/cases/new-york/other-courts/2016/2016-ny-slip-op-32398-u.html
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