DHCR Properly Increased Rent Reductions for Electric Meter Conversion

In January 2006, landlord applied to the DHCR for permission to convert a building with 433 rent-regulated apartments to individual electric metering and to terminate the inclusion of the cost of electricity in tenants’ rents. The DRO ruled for landlord in June 2006 and reduced rents based on a rent reduction schedule set forth in DHCR Operational Bulletin 2003-1. Tenants appealed, arguing that these rent reduction schedules were outdated. The DHCR ruled against tenants in 2008. Tenants then filed an Article 78 court appeal. While that appeal was pending, the DHCR issued Update No. 1 to Operational Bulletin 2003-1 in September 2008. The court later ruled for tenants and sent the case back to DHCR for a new ruling that applied the DHCR’s revised rent reduction schedules. The DHCR did so, and landlord filed a new Article 78 appeal.

The court ruled against landlord, who appealed and lost. The court’s prior ruling was a final judgment, not an order, and landlord could have appealed that but didn’t. The DHCR also had no discretion because the court ordered the agency to make a specific ruling to apply the revised rent reduction schedule. Landlord also couldn’t relitigate the issue already decided in the prior Article 78 proceeding. There also was a rational basis to send the case back to the DHCR for a new ruling consistent with the revised Operational Bulletin.

Trump Village Apartments One Owner. v. DHCR: 2016 N.Y. Slip Op. 07032, 2016 WL 6270305 (App. Div. 2 Dept.; 10/26/16; Chambers, JP, Dickerson, Miller, Connolly, JJ)