DHCR Improperly Fined Managing Agent

(Decision submitted by James R. Marino of the Manhattan law firm of Kucker Kraus & Bruh, attorneys for the landlord.) Facts: Tenant complained of a continuous humming noise and vibration coming from the basement into his first-floor apartment, which resulted from the removal of asbestos from around a water pump. The complaint was served on landlord, the holder of unsold cooperative shares to tenant's apartment, and landlord's managing agent. The DRA ruled for tenant and ordered landlord's managing agent to correct the condition. When the condition hadn't been corrected more than a year later, the DHCR held a hearing, attended by landlord, landlord's managing agent, the cooperative owner's corporation, and the coop corporation's managing agent (Kreisel). The DHCR found that the coop corporation and its managing agent couldn't be held responsible for violating the DRA's order but still fined them $250 for knowingly violating the rent stabilization code. Kreisel appealed. Court: Kreisel wins. A cooperative corporation isn't considered an ''owner'' of a rent-stabilized apartment within the meaning of the rent stabilization code. Therefore, the DHCR didn't have the authority to impose a penalty on the coop corporation's managing agent in this situation. And even if it did, the DHCR had admitted that it would be unfair to charge Kreisel with violating an order of which they were unaware. Even if Kreisel knew of the condition since December 1992, they weren't served with the DRA's order, so they couldn't have known there was a violation. The fine was revoked.

Kreisel C. v. DHCR: Index No. 101153/95 (8/10/95) (Sup. Ct. NY; Huff, J) [6-page document]