DHCR Properly Reopened Rent Overcharge Case

Facts: Tenant moved into a rent-stabilized apartment in 1982 and filed a rent overcharge complaint with the CAB, the DHCR's predecessor agency. In 1985 tenant became the building's 7-A administrator. In 1986 the DRA ruled for tenant and found that her legal monthly rent was $300. Tenant appealed, showing that the registered rent for her apartment was $185. Tenant had registered the rent herself in her role as 7-A administrator. The DHCR ruled for tenant in 1992, reduced her rent, and found an $8,500 overcharge. In the meantime, landlord had bought the building at a judicial foreclosure sale in 1985 but wasn't informed of tenant's PAR. Landlord later asked the DHCR to reconsider its PAR decision based on an irregularity in a vital matter since tenant was both a tenant and 7-A administrator when her PAR was filed and landlord wasn't given notice of the case. The DHCR reopened the case at landlord's request and ruled for landlord, finding that its prior order was improper. Tenant appealed, claiming that the DHCR's new order was improper. The court ruled for tenant. DHCR and landlord appealed. Court: Landlord and DHCR win. It wasn't necessary for the DHCR to find that tenant had acted improperly in order to reopen the PAR case. The conflict of interest in tenant's dual role, as well as the fact that landlord wasn't joined in the PAR case, were sufficient reasons to find an ''irregularity in vital matters'' warranting reopening of the case. The DHCR reviewed the facts and made a reasonable redetermination of the overcharge claim.

Dowling v. DHCR: NYLJ, p. 25, col. 5 (4/30/98) (App. Div. 1 Dept.; Rosenberger, JP, Nardelli, Wallach, Mazzarelli, JJ)