Choi v. Linc LIC L.L.C.

Summary

The Appellate Division, First Department held that rent concessions granted after the enactment of the Housing Stability and Tenant Protection Act of 2019 functioned as a preferential rent and that the landlord failed to calculate rent increases lawfully. The court also held that the lease provision permitting the landlord to charge attorneys' fees without a court order was unconscionable and that the tenant was entitled to treble damages for willful rent overcharges. The order was modified to grant the tenant summary judgment on liability and remanded for further proceedings concerning damages.

Holdings

1. The concessions functioned as a preferential rent because the amount charged and paid by the tenant was less than the legal regulated rent; consequently, rent increases had to be calculated from the rent actually charged and paid before renewal, as adjusted by lawful increases.
2. The tenant was entitled to summary judgment as to liability on the second and third claims for rent overcharges and related declaratory and injunctive relief.
3. The lease provision allowing the landlord to assess attorneys' fees against the tenant without a court order was unconscionable and unenforceable.
4. Treble damages were warranted because the landlord did not overcome the presumption of willfulness by a preponderance of the evidence.

Questions Presented

1. Whether the rent concessions functioned as a preferential rent requiring the tenant's rent increases to be calculated from the rent actually charged and paid.
2. Whether the tenant was entitled to summary judgment on liability for rent overcharges and related declaratory and injunctive relief.
3. Whether the lease provision allowing the landlord to assess attorneys' fees without a court order was unconscionable and unenforceable.
4. Whether the landlord overcame the statutory presumption that the rent overcharges were willful, thereby avoiding treble damages.

Disposition

reversed_and_remanded