Landlord Can Collect Increase from Tenants Who Didn't Sign PAR

(Decision submitted by Daniel S. LoPresti of the Manhattan law firm of Shaw & Binder, attorneys for the landlord.) Facts: Landlord applied for MCI rent hikes for the building's 1,000 rent-stabilized tenants. The DRA ruled for landlord, and 10 tenants appealed the MCI order granting the MCI increase. Landlord also appealed the portion of the order that denied an MCI increase for $318,000 in improvements. Landlord continued to collect prospective MCI rent increases from all tenants and to collect retroactive MCI increases from all but the 10 tenants who filed the PAR. Tenant who didn't sign the PAR then complained of a rent overcharge, claiming that, under the Rent Stabilization Code, landlord couldn't collect the retroactive portion of the MCI rent increases pending the DHCR's decision of tenants' PAR. Landlord claimed that the Rent Stabilization Code section delaying collection of the increase pending tenants' PAR wasn't automatic in every case. Landlord argued that the DHCR could allow landlord to start collecting the increase and that any delay shouldn't apply to tenants who didn't sign the PAR, especially when the vast majority of tenants didn't do so. The DHCR ruled for tenant, and landlord appealed to court. Court: Landlord wins. The Rent Stabilization Code authorizes the DHCR to choose not to impose an automatic delay ''under appropriate circumstances.'' A DHCR ''Public Information Manual and Reference Guide'' also stated that it wasn't DHCR policy to delay collection of MCI increases from all tenants when only some file PARs---the delay only applies to the tenants who sign the PAR. So the DHCR clearly can't rely on a PAR filing by several tenants to bar retroactive rent increases for tenant who didn't sign the PAR. Landlord also raised the issue of whether its PAR asking for modification of a small portion of the DRA's otherwise favorable MCI ruling rendered a delay inappropriate. The case was sent back to the DHCR for the agency to decide the issue.

Presidential Property Services, Inc. v. DHCR: Index No. 3096/97 (7/3/97) (Sup. Ct. Kings; Kramer, J) [7-page document]