Opinion
104832/05.
Decided September 6, 2005.
David Rozenholc Associates, New York City (Amy N. Mack of counsel), for petitioner.
David B. Cabrera, New York City (Caroline M. Sullivan of counsel), for respondent.
Petitioner seeks an order annulling the February 7, 2005 determination by a deputy commissioner of respondent New York State Division of Housing and Community Renewal (DHCR) which denied a petition for administrative review (PAR) and adhered to a prior determination denying and terminating petitioner's complaint that his landlord failed to offer a renewal lease on the same terms and conditions as were contained in the preceding lease. In this proceeding, petitioner claims that DHCR acted in an arbitrary and capricious manner in denying his "lease renewal" complaint on grounds that his claims should have been raised in a rent overcharge complaint.
Petitioner's apartment at 539 West End Avenue is a rent-stabilized unit. In 2001, petitioner entered into a lease for the apartment that included a preferential rent rider. The rider stated that the legal rent the landlord was entitled to collect on the apartment was $1926.99 per month, but that petitioner's rent would be $1698.32 per month, which figure would also be used for calculating future rent increases. In 2004, however, the landlord presented petitioner with a lease renewal offer with a monthly rent that apparently was based on the legal rent for the apartment, as opposed to the preferential rate established in the 2001 lease. On August 1, 2004, petitioner signed the renewal, agreeing to a two-year lease term at the higher rent, but wrote over his signature that he was signing "under duress pending DHCR complaint."
Although not directly involved here, the parties' dispute apparently finds its genesis in the Legislature's 2003 amendment to the Rent Stabilization Law of 1969 which allowed landlords to offer lease renewals at the legal regulated rent notwithstanding the existence of a preferential rent rider in the original lease ( see, L 2003, ch 82, § 6; Administrative Code of the City of New York § 26-511 [c] [14]).
On August 10, 2004, petitioner filed a complaint with respondent DHCR claiming that his landlord refused to offer a renewal lease on the same terms and conditions as those contained in his expiring lease. In an order dated October 27, 2004, a DHCR rent administrator denied/terminated the complaint concluding that since petitioner signed a renewal before filing the complaint, the issue of the alleged failure to offer a proper lease renewal was essentially moot. Significantly, the rent administrator noted that petitioner had already filed a rent overcharge complaint against the landlord in which petitioner's claims concerning the correct rent for the apartment would be addressed.
On his PAR, petitioner argued, inter alia, 1) that the 2004 lease renewal offer that he signed was undated and, therefore, there was no proof that the landlord offered it within the legally-required window period; 2) that the renewal improperly changed the terms of the lease by revoking the preferential rent rider in the original lease; and 3) that, because of these alleged improprieties, petitioner was presented with an offer that in actuality amounted to "no offer at all" which he only signed under duress to avoid the threat of a holdover proceeding. In denying the PAR the deputy commissioner concluded first, that where there is no initial allegation that the renewal offer was untimely, there is no affirmative obligation on the part of the landlord to establish its timeliness. Second, with respect to the claimed revocation of the preferential rent rider, the commissioner noted that the renewal offer contained no explicit revocation of the rider and, to the extent that a revocation was implied by the lease, that issue could be dealt with in a rent overcharge proceeding. Finally, the commissioner observed that even an (allegedly) improper renewal offer is nonetheless an offer and that there were other alternatives available to petitioner besides asserting a failure to offer a proper renewal. For example, petitioner could have refused to pay the disputed rent and asserted its impropriety as a defense in holdover action or any other proceeding commenced by the landlord. Alternatively, petitioner could have paid the disputed rent and filed a rent overcharge complaint with DHCR which, in fact, petitioner did in addition to filing a complaint for failure to offer a proper renewal.
In explaining DHCR's policy in this area, the decision noted that all complaints over the correct amount of rent, regardless of their source, are better suited to resolution through a rent overcharge complaint:
The Commissioner must first point out that the rent reserved in a renewal offer is different from other lease terms (e.g., permission to have a pet) in that a separate remedy the overcharge determination with presumed treble damages is available in relation to the former. Now under petitioner's theory, every time an overcharge is found to have commenced with a renewal lease, that lease is ipso facto improper, so that the rent must be frozen at the last lawful level in our damage calculations; that has never been, however, the policy or practice of this Division or, we believe, the intent of the Legislature.
Based on the commissioner's conclusion that petitioner's complaints were more appropriately addressed in a rent overcharge proceeding, and the fact that petitioner had already filed a rent overcharge proceeding concerning the very same facts, the PAR was denied. This article 78 proceeding ensued.
Although petitioner necessarily alleges that DHCR's determination denying his PAR was arbitrary and capricious, in point of fact, most of the arguments in the petition (and the reply affirmation) attempt to justify petitioner's decision to bring a complaint for failure to offer a proper lease renewal, as opposed to explaining why the decision to deny the lease-renewal complaint was irrational. It is simply insufficient for purposes of article 78 review for petitioner to demonstrate that there are sound rationales why he could have presented his claims in a complaint for failure to offer a proper lease renewal. In order to prevail here, petitioner must demonstrate that it was irrational for DHCR to deny his lease-renewal complaint and require that his claims be presented in a rent overcharge proceeding ( see, Matter of Pell v. Board of Education, 34 NY2d 222). Petitioner has not carried this burden.
There is nothing particularly unreasonable or illogical about petitioner's belief that he was offered an improper lease renewal because the rent specified in the renewal offer did not comport with the terms of the preferential rent rider. That being the case, petitioner who was unrepresented by counsel in the administrative proceedings understandably chose to present his claims in a complaint for failure to offer a proper lease renewal. The problem with this reasoning, however, is that it contravenes DHCR's well settled policy in these kinds of disputes. Specifically, DHCR interprets its legislative mandate as requiring disputes over the amount of rent charged on rent regulated apartments to be decided in the context of rent overcharge complaints, regardless of the source of the overcharge. This interpretation is entitled to deference ( see, Matter of KSLM-Columbus Apartments, Inc. v. New York State Div. of Housing and Community Renewal, ___ NY3d ___, 2005 NY LEXIS 1255 [2005]). This is not a situation where DHCR is alleged to have departed from past policy or practice and has treated petitioner differently than any other tenant with a similar complaint. For purposes of complying with its legislative mandate, and for reasons of administrative efficiency articulated in respondent's answer, DHCR addresses all rent-related complaints on regulated apartments in rent overcharge proceedings.
In fact, respondent persuasively argues that petitioner's claims could not have been properly addressed in a "lease renewal" proceeding because such proceedings do not provide an efficient mechanism for resolution of this type of dispute or appropriate relief.
Finally, petitioner urges the Court to hold its resolution of this proceeding in abeyance pending the outcome of his PAR of the rent overcharge proceeding currently before DHCR. In petitioner's view, if he prevails at PAR in the rent overcharge proceeding then this petition should automatically be granted and, if the PAR is denied, then both this petition and the inevitable challenge to that denial should be consolidated for review. Neither scenario is appropriate, however. If petitioner's rent overcharge PAR is granted it will, ipso facto, be based on an administrative determination that petitioner's landlord charged too much for the apartment because of the preferential rent rider or for some other reason. Such a merits-based determination, however, would be completely distinct form the procedural and policy considerations that formed the basis for the agency's denial of the lease-renewal complaint under review. By the same token, denial of the rent overcharge PAR would implicate issues unrelated to the determination under review here and would accomplish little more than giving petitioner an impermissible "second bite at the apple," procedurally speaking. Thus there is no compelling reason to delay resolution of this proceeding. Accordingly, it is
Ordered and adjudged that the petition is denied and the proceeding dismissed.
This constitutes the decision and judgment of the Court.