Landlord Discontinued Electrical Inclusion Without 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 DRA also ordered landlord to have all billing for electric service transferred from tenants' names to its name as soon as possible.

Landlord appealed and lost. Landlord claimed that no rent reduction was warranted. But 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. Only some of the tenants were reimbursed by landlord for payments they made to Con Ed. Landlord acknowledged that Con Ed billing of tenants was an error and that they would receive rent credits for any payments they made. 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.

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