Tenants Can't Get Additional Attorneys' Fees from DHCR for PAR

(Decision submitted by Ronald S. Languedoc, Esq. of the Manhattan law firm of Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP, attorneys for the tenants.)

Tenants in one apartment claimed that the unit had been improperly deregulated and filed separate rent overcharge complaints with the DHCR. The DRA consolidated the claims and ruled for tenants. The DRA found that the overcharge wasn't willful, and directed landlord to refund $59,000, including interest and attorney fees.

Tenants appealed and lost. They claimed that all rent increases for individual apartment improvements (IAIs) claimed by landlord and granted by the DRA should be disallowed or, alternatively, reduced based on their expert's opinion that the IAI costs were inflated. The DHCR noted that the IAIs were subject to RSC Section 2522.4(a)(1) and DHCR Policy Statement 90-10, as in effect in 2014 when the work was done. The DRA reasonably relied on proof submitted by landlord and a DHCR inspection that confirmed that 18 of the 21 improvements listed in the contractor invoice were made. Triple damages weren't warranted. The aparment was gut-renovated in 2014 and most of the work was verified. And landlord believed it had justified a rent increase that resulted in a rent exceeding the deregulation threshold.

The DHCR rejected tenants' claim that the DHCR should apportion the overcharge to all of the tenants in occupancy from 2014 to 2018. Since there were overlapping tenants in that period and insufficient proof of payments of tenants not parties to the complaint, it would be unreasonable for the DRA to apportion liability. The DHCR also rejected tenants' request for additional attorney's fees to cover the PAR. Any fees request for work done after the issuance of the DRA's order were outside the scope of review of the underlying proceeding.

Lauto, Aigen & Heidke: DHCR Adm. Rev. Docket No. IS210025RK (2/9/21) [8-pg. doc.]