Hall v Van Amerongen

[*1] Hall v Van Amerongen 2008 NY Slip Op 52613(U) [22 Misc 3d 1108(A)] Decided on November 26, 2008 Supreme Court, Kings County Solomon, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on November 26, 2008
Supreme Court, Kings County

Lancelot Hall, Petitioner,

against

Deborah Van Amerongen, as Commissioner of the New York State Department of Housing and Community Renewal, Respondent.



19423/2008



Chip Gray

South Brooklyn Legal Services

105 Court Street

Brooklyn, New York 11201

NYS DHCR

25 Beaver Street

Room 707

New York, NY 10004

Martin M. Solomon, J.

Petitioner brings this Article 78 proceeding, seeking reversal of respondent New York State Department of Housing and Community Renewal's ("DHCR") order, dated May 8, 2008. The order upheld the ruling of DHCR's Rent Administrator which calculated the rent reductions to which petitioners are entitled as a result of their landlord's application for permission to convert their buildings to individual electric metering. Petitioner is a tenant of 3301 Foster Avenue, Apartment 6C, Brooklyn, New York. The building has not converted to individual metering as of the date the instant Petition was heard by this court.

It is well settled that when an owner requests permission to stop providing electricity to its tenants as a service included in the rent, and install individual meters for tenants to purchase [*2]electricity from Con Edison, DHCR must decrease tenants' rents pursuant to the provisions of Section 2522.4(d) of the Rent Stabilization Code.

In order to calculate the rent reduction, the Rent Administrator uses an operational bulletin based upon the median monthly cost of electricity to tenants derived from data from the United States Census Bureau's New York City Housing and Vacancy Survey, as tabulated by the New York City Rent Guidelines Board. The operational bulletin used on the Petitioner's matter was 2003-1 which used data from the United States Census Bureau's 2002 New York City Housing and Vacancy Survey. Operational Bulletin 2003-1 sets forth a schedule that directs a $40 rent reduction for one and two bedroom apartments, and an additional $5 reduction for each additional room.

After review of the materials submitted, this court finds that the DHCR Rent Administrator did calculate Petitioner's rent correctly using the 2003-1 Bulletin. However, the Rent Stabilization Law directs the Agency to issue a new operational bulletin every three years based upon the most recent Census survey data. Although the Petitioner did argue that this operational bulletin was outdated, the Respondent, in its order dated May 8, 2008, did not state its agency's obligation to update its bulletin, only that DHCR used the most recent operational bulletin available to make its assessment.

It is well settled that the failure of an agency to comply with its own rules and procedures is arbitrary and capricious, and a determination made in violation of such procedures will be reversed by the Courts. Frick v. Bahaou, 56 NY2d 777 (1982), See also Waldman v. New York City Dept. of Housing Preservation and Development, 36 AD3d 501 (1st Dept., 2007). In this case, DHCR did not update its operational bulletin until September 2008, more than five years after their previous bulletin. DHCR's failing to update its schedule of electrical conversion rent reductions triannually, as promulgated by the Rent Stabilization Law, is a violation of its own rules and is arbitrary and capricious.

Indeed, DHCR has adopted procedures that annually adjust the compensation owed to landlords by tenants who use air conditioners. Under these procedures, DHCR increased air conditioner charges by 29 percent between 2002 and 2005.

Recently, DHCR's Rent Administrator ruled in another matter that the reduction in rent should be based on the schedule in effect on the date the tenant is compelled to start paying his or her own electricity. In the instant case, DHCR insists that petitioner's rent be reduced according to the schedule promulgated in 2003, regardless of when his landlord actually converts from master metering to direct metering. This court finds that such inconsistent application of DHCR's rules and procedures is arbitrary and capricious, and results in unjust enrichment for the landlord.

Since DHCR did not update its operational bulletin in violation of the Rent Stabilization Code, this court must vacate DHCR's orders of June 27, 2005 and May 8, 2008. DHCR is [*3]directed to promulgate a new rent reduction schedule based upon the most recent operational bulletin, in accordance with Rent Stabilization Law.

Dated:November 26, 2008Hon. Martin M. Solomon

J.S.C.