DHCR Arbitrarily and Unreasonably Revoked Triple Damages

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $59,581 with triple damages. Landlord appealed, and the DHCR revoked the triple damages. On its own and in response to pending rent reduction orders, the DHCR found that the DRA shouldn’t have assessed triple damages before prior landlord’s rent restoration application was decided. The DHCR also dismissed a second rent reduction order.  Tenant then filed an Article 78 court appeal, claiming that the DHCR’s decision was arbitrary and unreasonable. The court ruled for tenant, finding that the DHCR’s use of facts and arguments not made by the parties and without giving tenant an opportunity to respond was arbitrary, that the DHCR’s ruling was an abuse of discretion, and that the DHCR’s independent investigation was unjustified. Landlord, who had recently bought the building and filed the PAR, was bound by the unlawful actions of prior landlord. The case was sent back to the DHCR to reconsider its decision solely on the basis of original arguments made in the PAR.

Peralta v. DHCR: Index No. 101248/15, NYLJ No. 1202773325405 (Sup. Ct. NY; 11/10/16; Schlesinger, J)