Landlord Discontinued Electrical Inclusion Without DHCR Approval

(Decision submitted by David Hershey-Webb of the Manhattan law firm of Himmelstein, McConnell, Gribben, Donoghue & Joseph, attorneys for the tenants.)

Rent-stabilized and rent-controlled tenants complained of a reduction in building-wide services. They claimed that landlord removed the service of electrical inclusion in their rents without prior approval by the DHCR. In March 2011, landlord authorized Con Edison to set up individual billing accounts as part of landlord's plan to switch to direct metering. The DRA ruled for tenants and reduced their rents. The DRA stated that landlord was responsible for all costs related to tenants' electrical service. If tenants had made payments for electrical service and didn't receive rent credits from landlord, they could file rent overcharge complaints. Landlord was ordered to have all billing for electric service transferred from tenants' names to landlord's name immediately. The DRA also stated that if landlord didn't correct this condition, it could be subject to further penalties.

Landlord appealed and lost. Landlord claimed that it had filed an application to eliminate rent inclusion of electricity with the DHCR after upgrading electric service to the building and that Con Ed had started billing tenants prematurely. But DHCR records showed that landlord's application, filed in May 2011, had been withdrawn and that proceeding was terminated in February 2012. Some tenants were reimbursed by landlord for electric service payments they made to Con Edison. But  there was no lawful basis for the Con Ed billing to tenants in the first place. The DRA properly reduced tenants' rents based on the reduction in services. 

98 Riverside Drive, LLC: DHCR Adm. Rev. Docket No. AW430009RO (8/14/13) [4-pg. doc.]