Rent Reduction Order Must Result in Actual Rent Decrease Despite 0% Guideline

Rent-stabilized tenant complained of rent overcharge based on two DHCR rent reduction orders that reduced and froze tenant's rent for certain periods. The DRA acknowledged that there had been a rent reduction order based on reduced services, but since the applicable rent guidelines increase under RGBO #47 by which the rent was reduced was zero percent, there was no actual overcharge.

Tenant appealed and lost. Tenant then filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable. The court agreed with tenant and found that some punishment for the service reduction must be imposed in the form of a rent reduction. The court sent the case back to the DHCR for reconsideration.

The DHCR then applied the 1 percent increase under RGBO #46 to reduce tenant's rent by that amount under the rent reduction order. This resulted in an overcharge of $8.10 per month for 18 months. Triple damages weren't assessed since the landlord had reasonably followed RGBO #47 in finding no overcharge. In addition, the DHCR noted that there was a second rent reduction order that landlord hadn't complied with. Triple damages were applied to that overcharge. The total refund due to tenant was $3,627.

Lipton: DHCR Adm. Rev. Docket No. LV210002RP (4/12/24)[6-pg. document]