Rent Reduction Increased After Tenant Appeal

In 2006, landlord asked the DHCR for permission to terminate inclusion of electrical service in the rents of 443 rent-stabilized and rent-controlled tenants in the building. Landlord planned to convert from master metering to individual apartment submetering, by which each tenant would be billed directly for individual apartment electrical usage. The DRA ruled for landlord on the condition that the rents were reduced in accordance with the schedule set forth in the DHCR's Operational Bulletin 2003-1.

Tenants appealed, claiming that the DRA used an outdated rent reduction schedule. The DHCR ruled against tenants, who filed an Article 78 appeal. The court sent the case back to the DHCR for reconsideration. The DRA then modified its original order by applying a 2008 update to the rent reduction schedule set forth in Operational Bulletin 2003-1. Landlord then appealed, arguing that only one tenant had filed the Article 78 petition, so the DRA's new order should be applied only to him. Landlord also argued that the original rent reduction schedule ordered by the DHCR in 2006 should be applied and that the new, higher rent reductions would result in financial hardship to landlord. The DHCR ruled against landlord, who then filed an Article 78 court appeal.

The court ruled against landlord. The prior court order naming one tenant didn't bar the DHCR from applying its new ruling to all affected tenants at the building. The DHCR's use of Update 1 to Operational Bulletin 2003-1 wasn't arbitrary or capricious, because it followed the court order that remanded the case to the agency for reconsideration. And landlord didn't appeal the prior court decision. 

Trump Village Apartments One Owner v. DHCR: 44 Misc.3d 1210(A), 2014 NY Slip Op 51077(U) (Sup. Ct. Kings' 7/18/14; Schack, J)