Matter of Gold v New York State Div. of Hous. & Community Renewal

Annotate this Case

Download PDF

Matter of Gold v New York State Div. of Hous. & Community Renewal 2012 NY Slip Op 31558(U) June 6, 2012 Supreme Court, New York County Docket Number: 113218/11 Judge: Michael D. Stallman Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 611312012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: PART Justice Index Number : 11321 81201 1 GOLD, DAVID vs. NYS DIVISION OF HOUSING SEQUENCE NUMBER : 001 ",/ INDEX NO. MOTION DATE MOTION SEQ. NO. ARTICLE 78 FILED JUN 1 3 2012 COUNTY CLERK'S OFFICE NEW Y M K 0 NON-FINAL DISPOSITION 1. CHECK ONE: .... CHECK IF APPROPRIATE: ................................................ i 2. CHECK AS APPROPRIATE: 3. 0SEllLE ORDER DO NOT POST SUBMIT ORDER 0FIDUCIARY APPOINTMENT 0REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 21 __-___-___-_____________________________--X In the Matter of the Application of DAVID GOLD, as Court Appointed Receiver of 654 Broadway, New York, New York, Petitioner, For a Judgment Pursuant to Article the Civil Practice Law and Rules -against- 78 of DECISION AND JUDGMENT Index No. 113218/11 NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, and LLOYD MCNEIL, Respondents. Petitioner David Gold, as Court Appointed Receiver of 654 Broadway, New York, New York ( t h e 'Building) , commenced this Article 78 proceeding to annul, in part, the September 23, 2011 determination by t h e deputy commissioner of respondent New York State Division of Housing and Community Renewal (DHCR), which denied petitioner's petition for administrative review (PAR) of t h e district rent administrator's (R.A.) June 8 , 2010 order reducing respondent Lloyd McNeil's maximum legal regulated rent. McNeil, the rent-stabilized tenant of apartment 2-R (the 1 [* 3] Apartment) in the Building, commenced the DHCR proceeding by filing an Application For A Rent Reduction Based Upon Decreased Service(g) including, insofar a8 is relevant here, the claim that his former landlord had transferred to him the cost of providing hot water by removing the Building's boiler and installing in the Apartment an electric-powered hot water tank. On the basis of the landlord's failure to maintain various services, other than the provision of hot water, the R.A. reduced McNeil's maximum legal regulated rent to the rent that had been charged prior to the then most recent rent guideline adjustment. In addition, as a remedy for the landlord's failure to provide hot water to t h e Apartment at his own expense, the R.A. directed McNeil to reduce the regulated rent by the amount of his electric bill, until such time as the landlord assumed the cost of providing hot water, and invited him to file an overcharge complaint seeking to recover the c o s t of his electric bills for the four y e a r s preceding such a complaint. The petition seeks an order directing DHCR to modify the rent reduction order by removing therefrom the provision requiring petitioner to pay the cost of providing hot water to the Apartment. Alternatively, the petition requests an order directing DHCR to modify the rent reduction order by removing the 2 [* 4] provision directing McNei1 to deduct the entire amount.of his electric bills prospectively and allowing him to file an overcharge complaint to recover the entire cost of his electricity f o r the preceding four years. At the outset, the Court notes that petitioner is the courtappointed receiver of the Building. See CIT Lending Serv. Corp. v 654 B r o a d w a y P a r t n e r s LLC, Sup Ct, NY County, O c t . Edmead, J., Index No. 112833/09. 9, 2009, Although petitioner callnot be personally faulted f o r the a c t s of the previous owner, he is considered, with exceptions that are not here relevant, an llownerll purposes of the Rent Stabilization Code (RSC). RSC 5 for 2520.6 (i), The Court uses the word "owner," here, to refer to the receiver, the previous owner of the Building, and the defaulting mortgagor, who apparently remains the fee owner of the Building. A court reviewing an administrative determination may consider o n l y those argurnentB that were made in the administrative proceeding. Silberzweig v Doherty, 76 AD3d 915 (1st Dept 2010) ; Matter of Molloy v N e w York C i t y P o l i c e D e p t . , 5 0 AD3d 98 (1st Dept 2008). Accordingly, the following t w o arguments that petitioner urges here, but did not raise in his PAR, or in the August 11, 2010 supplement thereto, may not be 3 [* 5] considered now: (1) that the provision of hot water at no expense to the tenant is not a required service, because such service was not provided on the base date, that is, the date upon which the Apartment first became rent- stabilized; and (2) that the failure to provide hot water at no c o s t to the tenant is de minimis, within the meaning of RSC § 2523.4 ( f ) (11, and therefore, does "not rise to the level of failure to maintain a required service for the purpose of this section.Il Id. The Court notes that, even had petitioner raised these arguments in his PAR, they would fail. RSC § 2520.6 (r) (1) defines "required services" as "those services which the owner was maintaining or was required to maintain on the applicable base dates ...I1 (emphasis added). Since well before the inception of McNeilIs tenancy, section 27-2031 of the Administrative Code of t h e City of New York has required landlords of multiple dwellings, or of tenant occupied one- or two-family houses, to provide hot water supply.'I Ilfrom A s to the second argument, RSC § a central source of 2523.4 (f) ( 2 ) provides that "services required to be provided by laws or regulations other than t h e [Rent Stabilization Law] and [the RSC] shall not be subject to this subdivision." Accordingly, an owner's failure to provide hot water cannot be de minimis. 4 [* 6] The petition, otherwise, argues that the hot-water-related provisions in the rent reduction order exceed the powers granted to DHCR by RSC 5 2523.4 ( a ) (1), and that those provisions are, therefore, arbitrary and capricious. RSC 8 2 5 2 3 . 4 (a) (1) provides, in relevant p a r t , that [a] tenant may apply t o the DHCR for a reduction of the legal regulated rent to the level in effect prior to the most recent guidelines adjustment . . . and the DHCR shall so reduce the rent for t h e period for which it is found that the owner has failed to maintain required services. Petitioner has not cited any case, and this Court knows of none, that h o l d s that, when DHCR finds t h a t an owner has reduced required services, the sole remedy within i t s power is that set forth in RSC 5 2523.4 ( a ) ( 1 ) . Indeed, RSC § 2522.7 provides that [ i l n issuing any order adjusting or establishing any legal regulated rent, . . . the DHCR shall take into consideration a l l factors bearing upon the equitiea involved . . . . As the New York Court of Appeals has repeatedly instructed, 'Ithe w o r d 'any' means *all' or 'every' and i m p o r t s no limitation." Z i o n v Kurtz, 5 0 NY2d 92, 1 0 4 (1980); see a l s o R a y n o r v Landmark Chrysler, 18 NY3d 48 (2011). Accordingly, while DHCR is mandated to reduce rents when it finds that an owner has failed to provide r e q u i r e d services (Matter of T e n a n t s of Hyde P a r k 5 [* 7] G a r d e n s v S t a t e of New York D i v . of Hous. Off. of R e n t A d m i n . , 7 3 NY2d 9 9 8 t h e reduction provided f o r in RSC [1989]) § & C o m m u n i t y Renewal, , DHCR is not limited to 2523.4 (a) (1). See Matter of Lillian Goldman Family, LLC v New York S t a t e Div. of Hous. a n d Community R e n e w a l (12 AD3d 161, 162 [lst Dept 20041) (in which the Court affirmed the lower court's denial of a petition challenging a DHCR o r d e r reducing the rent of all the rentstabilized tenants in a building, in which elevator service had been reduced, by a uniform $15, an amount which the Court found was "reasonable";but see Mattex of ANF Co. v D i v i s i o n of Hous. & Community R e n e w a l , 176 AD2d 518 (1st Dept 1991) (where DHCR finds a reduction in required services, i t l a c k s diBcretion to r e d u c e r e n t by less than one guideline adjustment). A s the agency charged with enforcement of the RSL and the RSC, DHCR was well within its powers in ruling that McNeil should be compensated f o r having had to pay f o r his hot water, above and beyond the rent reduction imposed f o r a l l of the other reductions in his services. DHCR did not act arbitrarily by reducing t h e rent in the amount of McNeilIs t o t a l e l e c t r i c bil1B. In an administrative proceeding entitled In t h e Matter of t h e Administrative Appeal of MBZ A s s o c i a t e s LLC, Administrative Review Docket No. SK410040-RO, 6 [* 8] the R . A . , citing RSC 5 2522.7, determined that a reduction of the tenant's legal regulated r e n t by one guideline adjustment would not adequately compensate him for the cost of having paid for his heat and hot water for 3 8 months, a f t e r the Owner had individual gas and water meters installed, and reduced the tenant's rent by 12 percent. The deputy commissioner denied the owner's PAR and explained that, while the 12 percent reduction substantially exceeded the tenant's monthly cost for heat and hot water, the total amount of the rent reduction, from the effective date of the total amount that the tenant had paid f o r heat and hot water restored at any time after the R.A.'s order, and could still do so at any time, by assuming the cost of the tenant's heat and hot water. RSC § 2522.4 (d) provides that [aln owner may file an application to decrease required services for a reduction of the legal regulated rent . . . on the grounds that: ... such decrease is not inconsistent with the RSL or this Code. (4) Here, as in MBZ A s s o c i a t e s , the owner unilaterally shifted to the 7 [* 9] tenant the cost of providing hot water, a required service, rather t h a n applying to DHCR for permission. RSC § 2522.6 provides, in relevant part, that [wlhere the legal regulated r e n t or any fact necessary to the determination of the legal regulated rent . . . is in doubt, or is not known, the DHCR at any time . . . may issue an order in accordance with the applicable provisions of this Code determining the facts, including the legal regulated rent . . . . DHCR noted that, because McNeil had been required to s t a r t paying the monthly reduction in rent exceeds the monthly c o s t impermissibly foisted onto the tenant. It was not o n l y reasonable, but a l s o equitable (see RSC 5 2522.7) for DHCR to place on the owner, who had avoided paying for McNeilIs hot water for more than 10 years, rather than on McNeil, on whom such payments had devolved, s u c h costs as were imposed by the uncertainty of h o w much of McNeil's electric bill was attributable to the operation of t h e hot water tank in his apartment. It is in the owner's power to have t h e rent restored before 8 [* 10] such time as the total amount of rent reduction exceeds the tenant's multi-year cost of providing a required service, by having Con Edison segregate, e.g., by submetering and separately charge to petitioner, the cost of the electricity used to o p e r a t e McNeil's hot water tank. Accordingly, it is hereby ADJUDGED t h a t the petition i s denied and the proceeding is dismissed. Respondent is directed to telephone t h e Clerk of P a r t 21 (646-386-3738 or 646-386-3342) to retrieve its bound administrative record (the "return") within 30 days. n Dated: : ?+~+EF&~~ 2012 York, E New York : New R T N E 9

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.