OPINION OF THE COURT
Ciparick, J.On this appeal, we are asked to determine whether the rationale employed in Thornton v Baron (5 NY3d 175 [2005]), which allowed the parties to look back farther than four years, applies in a situation where it is alleged that the standard base date rent is tainted by fraudulent conduct on the part of a landlord. We conclude that it does, and that such base date rent may not be used as a basis for calculating subsequent regulated rent if fraud is indeed present.
I.
In 1999, prior to the tenancy of petitioner Sylvie Grimm, the rent-stabilized apartment at issue here was registered with the Division of Housing and Community Renewal (DHCR) at a monthly rent of $578.86. In 2000, upon a vacancy in the apartment, rather than using the required rent-setting formula to determine the rent that it could legally charge the next tenants of the apartment, the owner notified prospective tenants that the rent for the subject apartment was $2,000 per month. However, the owner informed the prospective tenants that, if they agreed to make certain repairs and improvements to the apartment at their own expense, the rent would be reduced to *363$1,450. Both sums were unlawful because of the rent-stabilized status of the apartment. The tenants accepted the offer, and signed a written lease agreement without a rent-stabilized lease rider. The owner apparently did not provide those tenants with a statement showing the apartment was registered with DHCR.
In 2004, petitioner moved into the apartment, agreeing to the rental rate of $1,450. Her initial lease did not specify that the apartment was rent stabilized. Thereafter, in July 2005, petitioner filed a rent overcharge complaint with DHCR. The landlord, intervenor 151 Owners Corp., soon after receiving the overcharge complaint, sent petitioner revised versions of her 2004 and 2005 leases which advised that the apartment was subject to rent stabilization. In its answer to the overcharge complaint, 151 Owners Corp. admitted that the apartment had not been registered with DHCR since 1999. At the same time it filed the answer to the overcharge complaint, 151 Owners Corp. filed registration statements with DHCR for the years 2001 through 2005.
In an order dated June 21, 2006, the DHCR Rent Administrator denied petitioner’s overcharge complaint on the ground that the rent on the “base date”—i.e., the date four years prior to the filing of the complaint—was $1,450, and the rent adjustments subsequent to the base date had been lawful. The Rent Administrator did not address the issue whether the registration statement in effect on the base date was reliable or set forth a lawful rent. DHCR denied petitioner’s request for administrative review of the Rent Administrator’s determination, and denied her request for reconsideration.
Petitioner thereafter commenced this CPLR article 78 proceeding challenging DHCR’s determination denying administrative review. The petition sought (1) a declaration that she was the legal rent-stabilized tenant of the apartment and (2) remand to DHCR “with the direction that the rent for the subject apartment should be frozen at the 1999 amount, because the owner failed to register the subject apartment for 2000, and computing the rent overcharge amount.”
Supreme Court granted the petition, vacated DHCR’s determination and “remanded [the matter] . . . for reconsideration in accordance with [the court’s] decision” (2007 NY Slip Op 34184[U], *5). Supreme Court noted that DHCR’s determination simply calculated the rent by assuming, without actually determining, that the registration in effect on the base date was *364reliable. The court also noted that DHCR did not specifically reject petitioner’s allegations of fraud. The court reasoned, under Thornton v Baron (5 NY3d 175, 181 [2005]), that DH-CR’s failure to consider petitioner’s allegations of fraud and the reliability of the rent charged on the base date warranted remand to the agency for de novo review of the overcharge complaint.
DHCR and 151 Owners Corp. separately appealed. The Appellate Division affirmed, with two Justices dissenting (Matter of Grimm v State of N.Y. Div. of Hous. & Community Renewal Off. of Rent Admin., 68 AD3d 29 [1st Dept 2009]). The court reasoned:
“Given the specific facts of this case, DHCR should not be allowed to turn a blind eye to what could be fraud and an attempt by the landlord to circumvent the Rent Stabilization Law . . .
“[W]here, as here, there is an indication of possible fraud that would render the rent records unreliable, it is an abuse of discretion for DHCR not to investigate it” (id. at 33).
The two dissenting Justices voted to reverse and “would [have found] that [DHCR] acted rationally in complying with the legislative intent expressed in the statute of limitations set forth in CPLR 213-a and [the] Rent Stabilization Law” (id. at 34 [Buckley, J., dissenting]).
DHCR and 151 Owners Corp. appealed by permission of the Appellate Division, which certified the following question: “Was the order of Supreme Court, as affirmed by this Court, properly made?” We now affirm and answer the certified question in the affirmative.
II.
As we have previously explained, rent overcharge claims are generally subject to a four-year statute of limitations. Specifically, Rent Stabilization Law of 1969 (Administrative Code of City of NY) § 26-516 (hereinafter Rent Stabilization Law), as amended by the Rent Regulation Reform Act (RRRA) of 1997, states:
“[A] complaint under this subdivision shall be filed with [DHCR] within four years of the first overcharge alleged and no determination of an *365overcharge and no award or calculation of an award of the amount of an overcharge may be based upon an overcharge having occurred more than four years before the complaint is filed . . . This paragraph shall preclude examination of the rental history of the housing accommodation prior to the four-year period preceding the filing of a complaint pursuant to this subdivision” (Rent Stabilization Law § 26-516 [a] [2]; see also CPLR 213-a).
The RRRA “clarified and reinforced the four-year statute of limitations applicable to rent overcharge claims ... by limiting examination of the rental history of housing accommodations prior to the four-year period preceding the filing of an overcharge complaint” (Thornton, 5 NY3d at 180, citing Matter of Gilman v New York State Div. of Hous. & Community Renewal, 99 NY2d 144, 149 [2002]; see also Matter of Cintron v Calogero, 15 NY3d 347 [2010] [decided today]; Governor’s Approval Mem, Bill Jacket, L 1997, ch 116). To effectuate the purpose of the four-year limitations period, in rent overcharge cases DHCR regulations, as relevant here, set the “legal regulated rent” as the rent charged on the “base date,” which is the “date four years prior to the date of the filing of [the overcharge] complaint” plus any subsequent lawful increases (9 NYCRR 2520.6 [e], [f] [1]; 2526.1 [a] [3] [i]).
The four-year limitations period was explained in our decision in Thornton (5 NY3d 175 [2005]), where we held that a lease provision purporting to exempt an apartment from the Rent Stabilization Law in exchange for an agreement not to use the apartment as a primary residence was void as against public policy (see id. at 179-180). Our ruling was made in connection with a scheme between a landlord and an illusory tenant to agree that an apartment would not be used as the named tenant’s primary residence, resulting in the elimination of the rent-stabilized status of the apartment. Acknowledging that the apartment’s prior rental history could not be examined, and that the stabilized rent before the fraudulent scheme was of no relevance, we nonetheless rejected the owner’s contention that “the legal regulated rent should be established by simple reference to the rental history” on the date four years prior to the commencement of the overcharge action (id. at 180-181). We explained that the lease was “void at its inception” because its “circumvention of] the Rent Stabilization Law” violated public policy (id. at 181). As a result, the rent registration statement in effect on the base date “listing this illegal rent was also a *366nullity” (id.). Rather than using the registration statement to ascertain the rent on the base date, we instructed DHCR to use the so-called default formula to calculate the rent on the base date, as it does when no reliable records are available (see id.; see also Levinson v 390 W. End Assoc., L.L.C., 22 AD3d 397, 400-401 [1st Dept 2005]).1
DHCR contends that our holding in Thornton should be constrained to the narrow set of circumstances described in that case and that we should limit its application to cases involving illusory tenancies. We disagree and conclude that, where the overcharge complaint alleges fraud, as here, DHCR has an obligation to ascertain whether the rent on the base date is a lawful rent. Accordingly, here, as the Appellate Division concluded, DHCR acted arbitrarily and capriciously in failing to meet that obligation where there existed substantial indicia of fraud on the record.
In particular, here it is alleged that the tenants immediately preceding petitioner paid significantly more than the previously registered rent, and were not given a rent-stabilized lease rider.2 Moreover those tenants were informed that their rent would be higher but for their performance of upgrades and improvements at their own expense. Almost simultaneously with the substantial increase in the rent for the affected unit, the owner ceased filing annual registration statements (see Rent Stabilization Code [9 NYCRR] § 2528.3 [a] [requiring annual registration statements be filed with DHCR]) and later filed several years’ registration statements retroactively after receiving petitioner’s overcharge complaint. Finally, petitioner’s initial lease did not contain a rent-stabilized rider. The combination of these factors should have led DHCR to investigate the legality of the base date rent, rather than blindly using the rent charged on the date four years prior to the filing of the rent overcharge claim.
Our holding should not be construed as concluding that fraud exists, or that the default formula should be used in this case. *367Rather, we merely conclude that DHCR acted arbitrarily in disregarding the nature of petitioner’s allegations and in using a base date without, at a minimum, examining its own records to ascertain the reliability and the legality of the rent charged on that date.
DHCR also argues that, under the Appellate Division’s holding, any “bump” in an apartment’s rent—even those authorized without prior DHCR approval, such as rent increases upon installation of improvements to an apartment (see Rent Stabilization Law § 26-511 [c] [13])—will establish a colorable claim of fraud requiring DHCR investigation. Again, we disagree. Generally, an increase in the rent alone will not be sufficient to establish a “colorable claim of fraud,” and a mere allegation of fraud alone, without more, will not be sufficient to require DHCR to inquire further. What is required is evidence of a landlord’s fraudulent deregulation scheme to remove an apartment from the protections of rent stabilization. As in Thornton, the rental history may be examined for the limited purpose of determining whether a fraudulent scheme to destabilize the apartment tainted the reliability of the rent on the base date.
In sum, the Appellate Division correctly applied Thornton to this rent overcharge proceeding and properly concluded that DHCR has an obligation to ascertain whether petitioner’s allegations of fraud warrant the use of the default formula when calculating any rent overcharge that may have occurred. Accordingly, the order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.
. The default formula “uses the lowest rent charged for a rent-stabilized apartment with the same number of rooms in the same building on the relevant base date” (Thornton, 5 NY3d at 180 n 1; Levinson, 22 AD3d at 400-401).
. The Rent Stabilization Code requires that, for each vacancy or renewal lease for premises subject to the Rent Stabilization Code, the landlord “shall furnish to each tenant signing a vacancy or renewal lease, a rider in a form promulgated or approved by the DHCR, in larger type than the lease, describing the rights and duties of owners and tenants as provided for under” the Rent Stabilization Law (Rent Stabilization Code [9 NYCRR] § 2522.5 [c] [1]).