Overcharge Finding Revoked

(Decision submitted by Robert H. Berman of the Manhattan law firm of Kucker & Bruh, LLP, attorneys for the landlord.)

Nassau County rent-stabilized tenant complained of a rent overcharge. The DHCR ruled that landlord willfully overcharged tenant between July 1, 2005, and June 30, 2008, because it didn’t comply with Rent Guidelines Board Order 39. Landlord filed an Article 78 appeal, claiming that the DHCR’s decision was arbitrary and unreasonable. The court ruled for landlord and sent the case back to the agency for recalculation of the legal rent.

The DHCR appealed and lost. Nassau Guideline 39, issued in 2004, stated that certain landlords couldn’t collect rent increases unless they filed maintenance and operation cost schedules with the Guidelines Board. Although the ETPA permitted the Guidelines Board to set rent adjustments based on certain factors, it didn’t allow the board to deny otherwise authorized rent increases based on failure to submit timely cost schedules. So the DHCR improperly applied Guideline 39 to determine there was a willful rent overcharge. The DHCR’s new argument, that it had no authority to reject or modify findings made by the Guidelines Board, wasn’t stated in the DHCR order, so it couldn’t be raised on appeal.

Ashland Properties, Inc. v. DHCR: NYLJ, 4/26/10, p. 35, col. 2 (App. Div. 2 Dept.; Skelos, JP, Austin, Roman, Sgroi, JJ)