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Menachem J. Kastner and Ally HackMenachem J. Kastner and Ally Hack ()

Much ink has been spilled by the New York State courts, the New York State Division of Housing and Community Renewal (DHCR), and legal commentators,1 about the application of the “four-year rule” post-Grimm v. DHCR2 (and its progeny), and, specifically, the slow and painful erosion of the rule. The “four-year rule” is embodied in RSL 26-516(a)(2) and CPLR 213-a, and is a statute of limitations on claims brought by a residential tenant against his landlord based on allegations that he was overcharged in rent, whereby the look-back period of increases was limited to four years prior to the interposition of tenant’s overcharge claims, whether in court or before the DHCR. Prior to Thornton v. Baron, Grimm, and other similarly decided cases that have come down over the past decade, the four-year rule was a statute of limitations that was as much set in stone as any other statute of limitations in New York.

However, after Thornton,Grimm, and the other similarly decided cases, the courts began sidestepping (or trampling) the four years and examining rent increases or “bumps” well beyond four years simply based on a tenant’s mere invocation of a “colorable claim of fraud,” thereby putting the landlord to the task of refuting the tenant’s fraud allegations in order to limit the court’s or DHCR’s look-back period to the statutory four years. But, perhaps, no longer.

On June 26, 2014, the Court of Appeals revisited the issue and, by its unanimous ruling in Boyd v. DHCR,3 implicitly held that the four-year statute of limitations is still very much the rule and its “indicia of fraud” pronouncement in Grimm is still, as much, the exception. Merely waiving the “fraud” flag does not open the Grimm floodgates, sweeping away the four-year rule.

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