"If you don't have the paperwork from 15 years ago when you deregulated a unit, when the rent was $900, and now you're charging $6,000 He didn't need to finish the sentence, because rent-stabilized owners know exactly what he's talking about: the risk of having to pay a tenant years' worth of overcharges because they can't document renovations that removed a unit from stabilization, back when that was allowed."
"The records must be precise about what renovations were done to each unit and the cost. An invoice from a contractor without those specifics doesn't cut it. Landlords better have saved the canceled check, too. Banks get rid of their records after seven years, the broker lamented. No record-retention law existed, so not all landlords kept the paperwork. But years later, new laws and court rulings required it. Without the benefit of a time machine, some landlords are vulnerable to rent-overcharge lawsuits."
New York rent-stabilized properties face severe financial and legal risks when historical deregulation paperwork is missing. Precise documentation proving renovations and costs is required to defend past deregulations; generic contractor invoices are insufficient and canceled checks may be necessary. Banks often purge records after seven years and no earlier record-retention mandates left many owners without proof. Recent laws and court rulings enable retroactive reversal of deregulations, requiring reimbursement of the difference between legal stabilized rent and paid rent, with fraud findings triggering treble damages. Single-unit treble awards can exceed $200,000, creating acute exposure for owners.
Read at therealdeal.com
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