DHCR Abused Its Discretion by Freezing Tenant's Rent Based on 1996 Rent Reduction Orders

(Decision submitted by Santo Golino of the Manhattan law firm of Golino Law Group, PLLC, attorneys for the landlord.)

Tenant complained of rent overcharge. The DRA ruled for tenant based on two 1996 DHCR rent reduction orders that were still in effect without restorations of rent. Landlord appealed and argued that, under Rent Stabilization Code (RSC) Section 2526.1(a)(2)(v), the DHCR’s consideration of rent reduction orders issued beyond the four-year period of limitations was now discretionary where its application was no longer appropriate or reasonable or where the basis of the rent reduction would now be considered de minimis. Landlord pointed out that all janitorial services had been maintained since it bought the building in 2008 and that no tenants had filed noncompliance complaints regarding the rent reduction orders.

The DHCR ruled against landlord. Although rents were now restored, the rent reduction orders were in effect on the Oct. 20, 2010, base rent date and therefore landlord must refund $18,000 including interest to tenant. Landlord then filed an Article 78 court appeal, claiming that the DHCR’s decision was arbitrary and unreasonable.

The court ruled for landlord. The prior decision by New York’s highest court in Cintron v. Calogero was no longer controlling, and a 20-year look-back to 1996 rent reduction orders in this case was arbitrary and capricious. The DHCR’s decision was an abuse of discretion. There was absolutely no showing that the conditions that caused the “ancient” rent reductions in the 1990s still existed. The complaining tenant didn’t move into the apartment until 2013 and made no complaint about the 1996 conditions until discovering that the rent reduction orders existed.

Napa Partners LLC v. DHCR: Index No. 11928/2015 (Sup. Ct. Queens; 6/21/16; Raffaele, J) [9-pg. document]