Landlord Can Get Retroactive Rent Increases

Facts: Landlord made required renovations to an interim multiple dwelling and got a residential certificate of occupancy in December 1992. Landlord then filed a rent adjustment application with the Loft Board to determine the initial regulated rents and allowable rent guidelines increases. Landlord didn't formally apply for retroactive rent increases because at the time it filed its application, Loft Board regulations didn't provide for them. The Board's practice was to automatically grant increases retroactive to the date that landlord filed the rent adjustment application. Also, the hearing officer told landlord that it would get retroactive increases without applying for them. The Loft Board didn't grant landlord retroactive rent increases, and landlord appealed. The lower court ruled against landlord, and landlord appealed again. Court: Landlord wins. The Loft Board's decision was arbitrary and unreasonable. Under regulations that became effective after landlord's application was filed, landlord may apply for retroactive rent increases. But the regulations don't say that landlord must apply or else lose a benefit that had previously been granted automatically. Also, landlord had relied on the hearing officer's representations that it didn't have to apply for the increases. Since the Loft Board had actively misled landlord, it couldn't deny the retroactive increases.

Brady Properties, Ltd. v. NYC Loft Board: NYLJ, 2/3/00, p. 29, col. 2 (App. Div.1 Dept.; Rosenberger, JP, Nardelli, Ellerin, Saxe, Buckley, JJ)