Landlord applied for MCI rent hikes based on the installation of new windows building-wide. The DRA ruled for landlord. Tenants appealed, claiming that the new windows were defective in four of the 19 rent-stabilized apartments. The DHCR ruled for tenants and revoked the MCI rent hikes for those tenants who got defective windows. Landlord filed an Article 78 appeal with the court, claiming that the DHCR’s decision was arbitrary and unreasonable. Landlord argued that the DHCR went against its own policy, without explanation. Landlord claimed that in other cases, the DHCR merely suspended the rent increases temporarily until repairs were made. The DHCR claimed that, in the other cases, MCI rent hikes were temporarily halted because the landlord hadn’t been given a chance to make repairs. The DHCR argued that, in this case, landlord previously claimed that it had already repaired the windows in question prior to the DHCR inspection. The court ruled against landlord, finding that the DHCR’s explanation was reasonable and not arbitrary.
Landlord appealed and won. The DHCR's decision was arbitrary and unreasonable because the agency neither indicated a reason for its drastic penalty nor followed its own prior rulings in similar cases where only a few apartments were affected. At most, the DHCR should have suspended the MCI increase, but not revoked it entirely. The court revoked the DHCR's ruling and sent the case back to the agency for reconsideration.
Langham Mansions LLC v. DHCR: NYLJ, 9/16/10, p. 28, col. 3 (App. Div. 1 Dept.; Andrias, JP, Saxe, Catterson, Freedman [dissenting], Abdus-Salaam, JJ)
