Aras v. B-U Realty Corp.

Summary

The New York Court of Appeals held that the Appellate Division applied an improper standard when evaluating whether tenants could invoke the fraud exception to the four-year lookback period under Rent Stabilization Law § 26-516(a). The Court remitted the case for application of the standard requiring sufficient indicia of fraud or a colorable claim of a fraudulent scheme, answered the certified question in the negative, and reversed the order insofar as appealed from.

Holdings

1. A plaintiff need not demonstrate each element of common-law fraud to invoke the fraud exception; the plaintiff must instead present sufficient indicia of fraud or a colorable claim of a fraudulent scheme.

Questions Presented

1. Whether a plaintiff seeking to invoke the fraud exception to the four-year lookback period under Rent Stabilization Law § 26-516(a) must establish every element of common-law fraud.
2. Whether the case should be remitted for application of the standard announced in Burrows v. 75-25 153rd St., LLC.

Disposition

reversed_and_remanded