Voiding of DHCR Fee Policy Affirmed


The Appellate Division of the State Supreme Court last month unanimously upheld a lower-court decision barring the state Division of Housing and Community Renewal from giving amnesty to landlords who failed to pay a $10 a year administrative fee.

The court upheld Civil Court Justice Charles Ramos' 1995 ruling (Tenant/Inquilino, Dec. 1995) in Moreira et al. v. Halperin etc. nullifying DHCR Policy Statement 92-1, which gave landlords who had not paid the fee for at least one year a 60-day period to pay it without being penalized.

DHCR announced the policy in 1992 over the objections of the tenant movement. The fee is used to support the operation of the rent regulation system. Landlords who do not pay it are legally ineligible to collect or apply for rent increases.

Before 1992, DHCR completely ignored non-payment of the fees; it had never penalized a single landlord for it. Tenant leaders say the policy was clearly a response to their demands that the agency enforce the no-rent-increase penalty. As the policy required it to give notice to landlords prior to imposing the penalty, DHCR simply neglected to send out notices, ensuring that landlords would never be penalized for not paying the fees. It was DHCR's way of continuing to ignore the issue as they had in the past.

Landlord non-payment of fees became a hotter issue after the so-called Rent Regulation Reform Act of 1993, which eased the penalties for landlords who failed to register their apartments' rents. Before then, a landlord who had not registered in one or more years could be found ineligible for rent increases from the year they didn't register and liable for overcharge penalties if they collected those increases. The RRRA extended amnesty to landlords who had not registered as long as they were not otherwise collecting more than the legal rent. They were allowed to pay the $10 fee, plus a $5 penalty, and escape any finding of overcharge. The amnesty does not apply to landlords who are overcharging.

The Legislature did not enact amnesty for late payment of administrative fees. However, it is practically certain that a landlord who has not registered has also not paid the fee, because the city Department of Finance bills the fees on the basis of a list of registered apartments obtained annually from DHCR.

The practical impact depends on how DHCR will implement the decision, if at all. After years of ignoring the fee penalties, the agency is not likely to feel it is above ignoring the courts. Tenants who have any kind of proceeding pending at DHCR can and should amend their cases to claim that their landlord is ineligible to either apply for or collect any rent increases (based on MCI, guidelines, individual apartment improvements, etc.) because he has not paid one or more annual fees.

It is not necessary for the tenant to prove non-payment-tenants cannot get access to the fee-payment records-but simply allege it and demand that DHCR require the landlord to prove timely payment. Registration records can be obtained from any DHCR district office. Tenants should ask for the "Apartment Detail" printout (other printouts do not give complete information), from 1984 to date.

Met Council is preparing a fact sheet on how to interpret DHCR registration printouts for evidence of non-registration and overcharge. It will be ready in February.

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