DHCR Must Adjust Rent-Stabilized Rents

Landlords of five apartment buildings in Long Beach asked the DHCR to re-adjust initial legal regulated rents in effect in September 2000. Landlords claimed unique and peculiar circumstances. They said that section 8623(b) of the ETPA required the city to declare an end to the housing emergency in 1996 because the vacancy rate went over five percent. But the city failed to do so, and rents remained stabilized instead of being properly adjusted to fair market rents. The DRA ruled against landlords. They appealed and lost. Among other things, the DHCR claimed that it couldn't adjust rents in effect on July 1, 1996, because of the four-year rule. And some landlords had received money damages for lost rents through a separate court action. Landlords challenged DHCR's ruling in court, claiming that it was unreasonable. The court ruled for landlords and sent the cases back to the DHCR to recalculate rents. Neither the damage awards nor a Long Beach city resolution making the ETPA applicable to some buildings retroactive to July 1, 1996, reduced the effect of the city's failure to properly declare an end to the emergency requiring rent regulation. Landlords sought adjustment of rents in effect on August 1, 2000, not those in effect on July 1, 1996. So the four-year rule didn't apply. The DHCR must properly adjust the initial legal regulated rents in these buildings to fair market rents.

Executive Towers at Lido LLC v. DHCR: NYLJ, 8/5/04, p. 20, col. 1 (Sup. Ct. Nassau; Lally, J)