HPD Rent Adjustment Order Didn’t Invalidate DHCR Rent Reduction Order

Rent-stabilized tenants complained of a reduction in building-wide services. The DRA ruled for tenants in 1993 and reduced their rents. In 2013, the DRA denied landlord’s application to restore rents, finding that the conditions in question had been only partly corrected. In 2014, landlord sued to evict eight building tenants for nonpayment of rent. The court ruled against landlord based on the outstanding rent reduction order, which barred landlord from collecting any rent increases until the rents were restored.

Landlord appealed and lost. Landlord never appealed the DRA’s denial of its rent restoration application and therefore couldn’t attack that decision indirectly through the nonpayment proceedings. Landlord argued that a 1994 HPD order adjusted the tenants' rent in connection with a Private Housing Finance Law rehabilitation loan. But landlord never raised this argument before the DHCR and didn’t claim it had no opportunity to do so. The loan in question was made under PHFL Article VIII-A. Landlord claimed that the HPD order reset initial rents but, under this particular program, the HPD order only adjusted the rents of apartments that remained rent stabilized. 

Atsiki Realty LLC v. Munoz: 2015 NY Slip Op 25166, 2015 WL 3368975 (App. T. 1 Dept.; 5/22/15; Hunter Jr., JP, Shulman, Ling Cohan, JJ)