650 Crown Equities, LLC v Sealey

Holding The court denied the tenant’s motion to amend the answer to include a fraudulent overcharge claim, finding that a single unexplained rent increase did not constitute a colorable claim of fraud under the totality of the circumstances. However, the court granted the tenant’s motion for discovery to examine rent history for the purpose of prospectively setting the legal regulated rent, while holding that post-HSTPA overcharge damages based on a reconstructed rent from pre-HSTPA conduct would have an unconstitutional retroactive effect.

The court’s words

the court finds that respondent has not properly raised a colorable claim of a fraudulent scheme to deregulate the premises

90 Misc 3d 280, at the official text

the court agrees that respondent is entitled to discovery with respect to her rent setting claim

90 Misc 3d 280, at the official text

allowing for monetary damages for pre-HSTPA conduct based on the new rent reconstruction methodology has an unconstitutional retroactive effect

90 Misc 3d 280, at the official text