New Hearing Required on Landlord's Right to Rent Increase

Landlord applied to the DHCR for rent increases for rent-controlled tenants based on significant and unavoidable increase in operating costs for the prior two years. The DHCR ruled against landlord because landlord hadn't owned the building for at least two years. Landlord appealed. The court ruled against landlord, and landlord appealed again. The appeals court ruled for landlord. The DHCR's two-year ownership policy was issued under Operational Bulletin No. 110 in July 1997, after the effective date of the State Administrative Procedure Act (SAPA). The DHCR's policy wasn't a minor rule change and wasn't made in accordance with SAPA procedures. So the rule was invalid. The case was sent back to the DHCR for review in accordance with DHCR's prior Operational Bulletin no. 107, Supplement 2, which allowed new landlord to prove that it met requirements to receive rent increases.

10 Apt. Assocs., Inc. v. DHCR: NYLJ, p. 31, col. 3 (6/20/97) (App. Div. 1 Dept.; Joy, JP, Goldstein, Florio, McGinity, JJ)