DHCR Didn't Give Landlord Chance to Correct Problems

Facts: Landlord received notice of tenants' building-wide service complaint to the DHCR in January 1991. Tenants claimed there were problems with building maintenance, elevator and boiler operation, hallways, and waste area. Landlord answered that it had corrected the conditions and asked to be notified of any future conditions. In February 1994, more than three years later, the DHCR inspected the building and found unclean hallways and elevator, improperly secured railings, and a poorly maintained trash area. Contrary to prior procedure, the DHCR didn't provide landlord with notice of a chance to fix the conditions. The DRA issued an order reducing tenants' rents. The DHCR denied landlord's PAR, and landlord appealed. The court ruled against landlord, and landlord appealed again. Court: Landlord wins. Between January 1991, and March 1994, it was the DHCR's processing practice, before reducing rents, to permit landlords to correct conditions discovered during an inspection. The DHCR changed its practice on March 17, 1994, but didn't announce the change until an Owners' Advisory Council meeting on April 21, 1994. This was two weeks after the DRA's order was issued against landlord. Although the DHCR's procedure wasn't required by law or due process and may or may not have constituted an administrative rule, it was a recognized procedure relied upon by landlord. It was arbitrary and capricious for the DHCR to change the procedure without explanation.

Brusco v. DHCR: NYLJ, p. 25, col. 4 (5/19/97) (App. Div. 1 Dept.; Murphy, PJ, Rosenberger, Rubin, Mazzarelli, Andrias, JJ)