DHCR Must Consider Prior Orders Issued

Facts: In 1983, first rent-stabilized tenant filed a fair market rent appeal. In 1989, the DRA ruled for that tenant and reduced the apartment's first stabilized rent from $775 to $390 per month. In the meantime, first stabilized tenant moved out. The second rent-stabilized tenant complained of a rent overcharge in 1986. The DHCR ruled for second tenant in 1995, based on the rent reduction set forth in the prior fair market rent appeal order. At that point the DHCR realized that it hadn't mailed the prior fair market rent appeal order to landlord at its proper address. Because of this, it allowed landlord to file a PAR of the 1989 fair market rent appeal order in 1995. The DHCR notified current tenant in 1995 of the rent overcharge order and landlord's PAR. The DHCR advised tenant that he may have an overcharge claim after landlord's PAR was decided. This was the first time tenant learned of the prior DHCR orders. In 1993, landlord had retroactively filed its annual rent registrations back to 1986, and they didn't reflect the reduced rent. The DHCR ruled against landlord on its PAR, upholding the original rent reduction. The DHCR ordered landlord to adjust all subsequent rents in accordance with the reduction of the initial stabilized rent. After various appeals, the DHCR's order became binding in November 1996. At that point, current tenant filed a rent overcharge complaint. The DRA ruled for tenant, and landlord appealed. The DHCR ruled for landlord in May 1998, applying the four-year time limit on rent overcharge complaints set forth in the Rent Regulation Reform Act of 1997 (RRRA 97). The DHCR didn't consider the rent reduction resulting from the prior fair market rent appeal because it dated back to more than four years before the tenant's complaint was filed. Tenant appealed, claiming that the DHCR's decision was arbitrary and unreasonable. The DHCR claimed that the prior orders concerned ''rental events'' that had occurred more than four years before tenant filed his complaint. Court: Tenant wins. Although RRRA 97 applied, under the law tenant could challenge annual rent registrations filed within four years of his complaint. Since landlord filed all registrations back to 1986 in 1993, these were filed within four years of tenant's complaint. Also, the DHCR order upon which tenant based his overcharge complaint had been issued in 1995. This was also within four years of tenant's complaint. In any event, the DHCR's 1995 order was a ''rental event.'' Among other things, it ordered the recalculation of rents after 1989. Tenant could get a calculation of his legal rent based on the reduced fair market rent. Collection of any overcharges was, however, limited to the period starting in 1992, four years before tenant filed his complaint.

Crabtree v. DHCR: NYLJ, p. 26, col. 1 (12/9/98) (Sup. Ct. NY; Lippman, J)