April Insights
By Eileen O’Toole, Esq., Contributing Editor
Several decisions reported here this month present unusual issues, with some results that run counter to prior policies or precedent.
Building owners, rather than tenants, generally shoulder the burden of HPD fines for violations issued for unlawful short-term rentals, even if conducted by tenants without an owner’s consent or knowledge. But when Airbnb and HomeAway.com challenged Local Law 146 of 2018, by which the city sought to require monthly reports from short-term rental platforms with voluminous identifying data concerning their listings, a settlement was reached that resulted in relaxed reporting requirements. Although unusual in a settled case, a federal court recently awarded rental service HomeAway.com $600,000 in costs and attorneys’ fees because the case involved potential violations of Fourth Amendment protections against unreasonable searches and seizures (see LVT #31346).
Owners continue to face DHCR rent reductions in some cases where they are not responsible for reductions in service and may be powerless to correct the offending conditions. In Matter of Surat Realty v. DHCR (LVT #31339), the owner hit a wall where the DHCR reduced the rents of tenants who lost air and light because apartment windows that previously faced a vacant lot now abutted a newly constructed neighboring building.
Owners also frequently face DHCR rent reduction orders when Con Ed shuts off gas service for extended periods due to work needed in a building or in an adjoining street, even if through no fault of the owner. In one recent case, no rent reduction resulted, only because gas service had been restored by the time the DHCR inspected the condition (see LVT #31370).
At one time, the DHCR maintained a policy that public utility steam heat systems had no useful life limitation, so no MCI increase could be obtained for replacement of such systems. But in 360 E. 65th St. Tenants’ Assn. v. DHCR (LVT #31373), a court upheld the DHCR’s change in policy and application of a 50-year useful life to a Con Ed steam heat system. Over tenant objections, the DHCR permitted MCI increases for the owner’s installation of a new boiler system 52 years after the Con Ed system had been installed.
In another proceeding, the DHCR reiterated a rule issued in some prior court cases that, if building demolition was required after a fire, the owner wasn’t obligated to restore rent-regulated tenants to possession after construction of a new building (see LVT #31369).