HPD Order Setting Rents Didn't Override DHCR Rent Reduction Order

Landlord sued to evict nine tenants for nonpayment in consolidated proceedings. In each case, tenants claimed that the amount of rent sought was incorrect. In 1993, the DRA had issued a rent reduction order based on landlord's failure to maintain a door lock in the vestibule and other building-wide services. In 1994, HPD set rents for the building in connection with landlord's PHFL 8A loan without reference to the DHCR's order. In 1996, the DHCR denied landlord's PAR of the rent reduction order and made no mention of the HUD rents. Landlord continued to collect rent increases from tenants over the years. Tenants now claimed that they had been overcharged. Landlord argued that the 1994 HPD order overrode the DHCR's rent reduction order and that the DHCR's order had no effect.

The court ruled against landlord. The two agencies' orders were separate and concerned different issues. The DHCR's rent reduction order affected collectible rent rather than the amount of the legal regulated rent. A trial was needed to determine whether, in each instance, there had been an actual overcharge. 

Atsiki Realty LLC v. Munoz: Index No. L&T74565/12, NYLJ 1202628473181 (Civ. Ct. NY; 11/12/13; Halprin, J)