Landlord Discontinued Electrical Inclusion Without DHCR Permission

Sixty-nine tenants, rent stabilized and rent controlled, complained of a reduction in building-wide services because landlord discontinued electrical inclusion without prior permission from the DHCR. The DRA ruled for tenants and reduced their rents. In addition, the DRA ruled that landlord continued to be responsible for the costs relating to the provision of electrical service. If tenants had made payments for electric service and weren't credited by landlord, they could file rent overcharge complaints.

The DHCR later denied landlord's appeal, finding that landlord unilaterally discontinued electrical inclusion without the DHCR's permission in March 2011, authorized Con Edison to set up individual billing accounts as part of the owner's action in switching over to direct metering, and tenants were billed by Con Ed for electric usage contrary to the terms of their leases. Landlord acknowledged that Con Ed billing of tenants was an error and that they would receive rent credits for any payments they made. But the fact that tenants faced newly imposed duties of receiving unwanted account statements from Con Ed, of ensuring that timely payments of bills was made to avoid shut-off of electricity, and of following up with landlord for monthly reimbursement didn't amount to a de minimis decrease in services.

Landlord then filed an Article 78 court appeal, claiming that the DHCR's decision was unreasonable. The court ruled against landlord, finding that the DHCR's decision had a rational basis. Landlord failed to maintain required services and, without seeking DHCR permission, changed from a master metering system by which landlord paid for all electrical use included in tenant's rent to an individual metering system requiring tenants to pay for their own electrical service.

98 Riverside Drive v. DHCR: Index No. 101285/13, NYLJ No. 1202631715760 (Sup. Ct. NY; 12/2/13; Kern, J)