Landlord Didn't Comply with Rent Reduction Order that Froze Apartment Rent

LVT Number: #32401

The DHCR's Tenant Protection Unit (TPU) commenced a rent overcharge complaint against a building's new landlord on behalf of one tenant, after conducting an audit of the building's rents and finances in 2017. The DRA ruled for tenant, and ordered an overcharge refund with interest and triple damages. Landlord appealed and lost. Landlord then brought an Article 78 court proceeding against the DHCR, claiming that its PAR decision was arbitrary and capricious. 

The DHCR's Tenant Protection Unit (TPU) commenced a rent overcharge complaint against a building's new landlord on behalf of one tenant, after conducting an audit of the building's rents and finances in 2017. The DRA ruled for tenant, and ordered an overcharge refund with interest and triple damages. Landlord appealed and lost. Landlord then brought an Article 78 court proceeding against the DHCR, claiming that its PAR decision was arbitrary and capricious. 

The court ruled against landlord. Landlord claimed that the overcharge finding wasn't supported by substantial evidence. But that standard of review doesn't apply in this case. The only question was whether the DHCR's decision was reasonable. There was a 2015 DHCR rent reduction order, which froze the apartment rent. Landlord collected rent increases from tenant in accordance with apartment leases rather than complying with the rent reduction order. Landlord argued that it didn't have the opportunity to fully participate in the DHCR proceeding, but landlord did in fact make several submissions in response to the DHCR's requests for documentation. The DHCR's decision had a rational basis.

197 Madison Holdings LLC v. DHCR: Index No. 154462/2022, 2022 NY Slip Op 34158(U)(Sup. Ct. NY; 12/8/22; Perry, J)