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Hyde Park Gardens v N.Y.S. Div. of Hous. & Comm. Ren.

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Hyde Park Gardens v N.Y.S. Div. of Hous. & Comm. Ren.

Postby TenantNet » Fri Jun 30, 2006 7:08 am

In the Matter of the TENANTS OF HYDE PARK GARDENS et al., Respondents, v. STATE OF NEW YORK, DIVISION OF HOUSING AND COMMUNITY RENEWAL, OFFICE OF RENT ADMINISTRATION, Appellant (And Another Proceeding)

[No number in original]

Court of Appeals of New York

73 N.Y.2d 998; 539 N.E.2d 101; 541 N.Y.S.2d 345; 1989 N.Y. LEXIS 489


Argued March 21, 1989
April 27, 1989, Decided

PRIOR HISTORY: [**1]

APPEAL, by permission of the Appellate Division of the Supreme Court in the Second Judicial Department, from an order of that court, entered May 2, 1988, which affirmed an order of the Supreme Court (Arthur W. Lonschein, J.), entered in Queens County in a proceeding pursuant to CPLR article 78, upon reargument, adhering to a prior determination granting the petition to the extent of determining that the Division of Housing and Community Renewal (DHCR) erred in not ordering a rent reduction and remitting the proceeding to DHCR for a determination of that reduction. The following question was certified by the Appellate Division: "Was the order of this court insofar as it affirmed the order upon the cross appeal properly made?"

Petitioners, as tenants of rent-stabilized apartments in an apartment complex, sought review of a determination of DHCR to the extent that it failed to order a rent reduction after it found that the owner of the complex failed to maintain required services by implementing a new over-all security system, which involved, inter alia, a removal of preexisting outer door locks on each apartment building.

The Appellate Division concluded that Supreme Court [**2] correctly remitted the matter of rent reduction to DHCR, since the agency's determination not to order a rent reduction constituted an exercise of discretion which that agency did not possess, based upon the mandatory nature of the language in the Rent Stabilization Law of 1969 (Administrative Code of City of New York § 26-514), which provided that when the agency determines that there has been a diminution of a "required service", "the commissioner shall so reduce the rent".

Matter of Hyde Park Gardens v State of New York, Div. of Hous. & Community Renewal, Off. of Rent Admin., 140 AD2d 351, affirmed.

HEADNOTES: Landlord and Tenant -- Rent Regulation -- Reduction in "Required Service" -- Rent Reduction

In a proceeding to review a determination of the State Division of Housing and Community Renewal (DHCR) finding that petitioners, as tenants of rent-stabilized apartments, had suffered a diminution in required services after a new security system was implemented but not imposing a rent reduction, an order of the Appellate Division, which affirmed an order, upon reargument, adhering to a judgment granting the petition and remitting the matter for a determination of an appropriate rent reduction, is affirmed for reasons stated in the memorandum at the Appellate Division, which concluded that DHCR's determination not to order a rent reduction constituted an exercise of discretion which that agency did not possess based upon the mandatory nature of the language in the Rent Stabilization Law of 1969 (Administrative Code of City of New York § 26-514), which provided that when the agency determines that there has been a diminution of a "required service", "the commissioner shall so reduce the rent".

COUNSEL: Richard Hartzman and Dennis B. Hasher, for appellant.

Richard M. Creditor, for respondents.

OPINION: [*1000] Order insofar as appealed from affirmed, with costs, and certified question answered in the affirmative for the reasons stated in so much of the memorandum at the Appellate Division as related to the issue of rent reduction (140 AD2d 351).

Concur: Chief Judge WACHTLER and Judges SIMONS, ALEXANDER, TITONE, HANCOCK, JR., and BELLACOSA. Taking no part: Judge KAYE.
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Postby TenantNet » Fri Jun 30, 2006 7:17 am

In the Matter of Hyde Park Gardens et al., Respondents-Appellants, v. State of New York, Division of Housing and Community Renewal, Office of Rent Administration, Respondent-Appellant. (Proceeding No. 1.); In the Matter of Hyde Park Associates, Appellant-Respondent, v. New York State Division of Housing and Community Renewal, Respondent-Appellant. (Proceeding No. 2.)

[NO NUMBER IN ORIGINAL]

Supreme Court of New York, Appellate Division, Second Department

140 A.D.2d 351; 527 N.Y.S.2d 841; 1988 N.Y. App. Div. LEXIS 4605

May 2, 1988

JUDGES: [***1] Bracken, J. P., Lawrence, Rubin and Kooper, JJ., concur.

OPINION: [*351] [**842] In two proceedings pursuant to CPLR article 78 for review of a determination of the New York State Division of Housing and Community Renewal (hereinafter DHCR), which found that the landlord, Hyde Park Associates, the petitioner in proceeding No. 2, had failed to maintain required services, but declined to order a rent reduction, (1) Hyde Park Associates, the petitioner in proceeding No. 2, appeals from (a) so much of a judgment of the Supreme Court, Queens County (Lonschein, J.), dated November 13, 1986, as dismissed its petition, denied its motion to intervene in proceeding No. 1 and granted the petition of the tenants in proceeding No. 1 and (b) so much of an order of the same court dated April 10, 1987, as, upon reargument, adhered to the original determination; (2) the DHCR cross-appeals from so much of the judgment as (a) granted the petition in proceeding No. 1 to the extent of determining that it erred in not ordering a rent reduction and (b) remitted the proceeding to the DHCR for a determination of the rent reduction; and (3) the tenants of Hyde Park Gardens, the petitioners in the first proceeding, cross-appeal [***2] from so much of the judgment as denied their application to intervene in proceeding No. 2. The appeals of DHCR and tenants from the judgment brings up for review the order dated April 10, 1987 (see, CPLR 5517 [b]).

Ordered that the appeal and cross appeals from the judgment dated November 13, 1986, are dismissed, without costs or disbursements, as that judgment was superseded by the order of the same court dated April 10, 1987, made upon reargument; and it is further,

Ordered that the order dated April 10, 1987, is affirmed insofar as appealed from and reviewed, without costs or disbursements.

The principal issue determined by the DHCR was whether [*352] the tenants of Hyde Park Gardens had sustained a reduction [**843] in a "required service" as defined by the Rent Stabilization Law of 1969 (Administrative Code of City of New York § 26-514). Specifically, the issue determined by the agency was whether there had been a reduction in security caused by the landlord's implementation of a new over-all security system. "The question of what constitutes a required service presents a factual issue which is to be determined by the * * * administrative agency" ( Fresh Meadows Assocs. v Conciliation & Appeals Bd., 88 Misc 2d 1003, 1004, [***3] affd 55 AD2d 559, affd 42 NY2d 925). The DHCR made its determination after a hearing held at the request of the parties, pursuant to section 26-514 of the Administrative Code of the City of New York. Upon our review of the record, we find that the determination of the DHCR was supported by substantial evidence at the hearing. We further find that the determination had a rational basis and was not arbitrary and capricious (see, Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d 51, 55; Villas of Forest Hills Co. v Lumberger, 128 AD2d 701, 703; Matter of Plaza Realty Investors & Queens Blvd. Props. Co. v New York City Conciliation & Appeals Bd., 111 AD2d 395, 396). Clearly the enumerated factors considered by the agency establish that a rational basis existed for its determination which accordingly should not be disturbed (see, Matter of Bambeck v State Div. of Hous. & Community Renewal, supra; see also, Matter of Mid-State Mgt. Corp. v New York City Conciliation & Appeals Bd., 112 AD2d 72, affd on opn below 66 NY2d 1032).

Nor [***4] was the agency's determination barred by res judicata or collateral estoppel by the prior decision of the New York City Civil Court. There was not an identity of issues as the Civil Court's determination focused on habitability within the complex generally, whereas the DHCR's decision turned on the determination that there had been a diminution in a specific "required service". As previously noted this matter was precisely within the jurisdiction of the DHCR (see, Fresh Meadows Assocs. v Conciliation & Appeals Bd., supra). Moreover, the Civil Court's decision expressly provided it was "without prejudice to the rights of the parties in their present pending proceedings before other tribunals".

Finally, the Supreme Court was correct in remitting the matter of a rent reduction to the DHCR for a computation of the appropriate amount thereof. The agency's determination not to order a rent reduction constituted an exercise of discretion which that agency did not possess based upon the mandatory [*353] nature of the language in the Rent Stabilization Law of 1969 (Administrative Code § 26-514). When the agency determines that there has been a diminution of a "required [***5] service * * * the commissioner shall so reduce the rent" (Administrative Code § 26-514 [emphasis supplied]).
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Postby TenantNet » Fri Jun 30, 2006 7:18 am

In the Matter of Hyde Park Associates et al., Petitioners, v. Richard Higgins, as Commissioner of the New York State Division of Housing and Community Renewal, et al., Respondents

Index No. 5576/90

Supreme Court of New York, Queens County

149 Misc. 2d 682; 564 N.Y.S.2d 651; 1990 N.Y. Misc. LEXIS 635

November 19, 1990

NOTICE: [***1]
[Portions of Opinion Omitted for Purposes of Publication.]

DISPOSITION: Accordingly, the court finds that section 26-514 of the Rent Stabilization Law was constitutional as applied to the petitioners and that the rent refund ordered by the DHCR on March 9, 1990 was not "excessive" nor "wholly disproportionate" and therefore the petition is dismissed.

HEADNOTES:
Constitutional Law -- Validity of Statute -- Excessive or Disproportionate Sanction as Applied -- Sanctions for Reduction of Housing Services

The statutory sanctions in the form of retroactive rent reductions and rent freezes estimated at over $ 750,000 imposed on petitioner landlord by respondent State Division of Housing and Community Renewal for reduction of essential services pursuant to Rent Stabilization Law (Administrative Code of City of New York) § 26-514 are not excessive, or disproportionate to the wrong, are reasonably related to the statutory purpose, and are constitutional as applied. Although the monetary amount which petitioner must pay is very large, it is not excessive or disproportionate to the wrong; the reduction in essential services extended over a long period of time and affected a large number of tenants, resulting in each complaining tenant receiving an average refund of $ 43.55 per month for reduced services and each noncomplaining tenant receiving an average refund of $ 5.81 per month, and these refunds are clearly not excessive. The sanctions are reasonably related to the statutory goals of compelling a landlord to restore services, affording tenants a measure of compensation, and preservation and maintenance of the rental housing stock in New York City. Accordingly, the landlord's CPLR article 78 proceeding to vacate respondent's order on the ground that the sanctions imposed are excessive and so disproportionate to the offense as to render Rent Stabilization Law § 26-514 unconstitutional as applied is dismissed.

COUNSEL: White & Case for petitioners.

Richard Creditor for tenants of Hyde Park Gardens.

Dennis Hasher for respondents.

Cadwalder, Wickersham & Taft for Thrift Associates.

JUDGES: Sidney Leviss, J.

OPINIONBY: LEVISS

OPINION: [*683] OPINION OF THE COURT

[**652] In these CPLR article 78 proceedings petitioners Hyde Park Associates (hereinafter HPA) and Hyde Park Owners Corp. (hereinafter HPOC) seek a judgment vacating the March 9, 1990 order of respondents Commissioner Richard Higgins and the New York State Division of Housing and Community Renewal (hereinafter Commissioner and DHCR) which ordered a rent reduction and rent freeze for the period of February 1, 1984 to September 1, 1989 during which time there was a reduction in essential services.

This court, in an order dated March 29, 1990, granted petitioners' [***2] request for a temporary restraining order staying enforcement of the DHCR's order of March 9, 1990.

HPA is the landlord of the rent-stabilized tenants who reside at a garden apartment complex known as Hyde Park Gardens. HPOC is the owner of a cooperative located at Hyde Park Gardens. HPA was the sponsor of the cooperative, is a majority shareholder of HPOC, and pays maintenance to HPOC. The rent-stabilized tenants, however, only pay rent to HPA.

The DHCR in an order dated February 11, 1986 determined that HPA had reduced essential services at Hyde Park Gardens, but declined to order a rent reduction. That portion of the Commissioner's order which found a reduction of essential services was affirmed by this court in Matter of Hyde Park Assocs. v New York State Div. of Hous. & Community Renewal (Lonschein, J.) and by the Appellate Division, Second Department (140 AD2d 351, lv denied 72 NY2d 809). This court, in Matter of Tenants of Hyde Park Gardens v State of New York, Div. of Hous. & Community Renewal, Off. of Rent Admin. (Lonschein, J.), held that upon the finding of a reduction of essential services, the DHCR was required, as a matter of law, to order a rent reduction, [***3] under section 26-514 of the Administrative Code of the City of New York. (Commonly known as the Rent Stabilization Law.) This court's decision was upheld by the Appellate Division, Second Department, on May 2, 1988 (140 AD2d 351, supra) and the Court of Appeals on April 27, 1989 (73 NY2d 998). The matter was remanded to the DHCR for the sole purpose of determining the amount of the rent reduction. The landlord restored the security services at Hyde Park Gardens on September 1, 1989.

The DHCR, in an order issued on March 9, 1990, modified [*684] its prior order of February 11, 1986, and reduced the rent in accordance with the formula set forth in section 26-514 of the Rent Stabilization Law. The [**653] Commissioner, upon a review of the evidence, found that there was no basis "to order an extended payback period or to vary the Division's standard refund directive in any other respect" and directed that those tenants who had joined the complaint of a decrease in building wide services, would have their rents reduced to the level in effect prior to the last rent guideline increase commencing before the effective date of the rent reduction. This rent reduction was [***4] for the period of February 1, 1984, the date of the tenants' complaint, to August 31, 1989. In addition, as the housing complex had been the subject of various major capital improvement (MCI) increases over the years, the owner was barred from applying for or collecting rent increases for MCIs from all tenants in the complex for the period that the owner failed to maintain essential services. The Commissioner directed the owner to refund to the tenants all amounts collected in excess of the reduced rent attributable to guidelines or the MCI increases. The Commissioner also directed the restoration of the rents as of September 1, 1989, the date the owner had restored the services in question.

Petitioners now seek to vacate the DHCR's order of March 9, 1990 and assert that as they acted in good faith, the penalty of a rent reduction estimated to be over $ 750,000 is excessive and so disproportionate to the offense as to render section 26-514 of the Rent Stabilization Law unconstitutional as applied to them under the 8th, 5th and 14th Amendments of the US Constitution, and article I, §§ 5 and 6 of the NY Constitution.

Respondents Commissioner and DHCR, in opposition, assert that [***5] the statutory sanctions imposed under section 26-514 of the Rent Stabilization Law are not excessive, or disproportionate to the wrong, are reasonably related to the statutory purpose, and are constitutional as applied. Respondents further assert that the 8th Amendment is inapplicable, as the rent reduction, while serving governmental purposes in protecting tenants, is neither a fine nor a penalty and is payable only to the tenants and not the government. It is further asserted that the rent reduction formula has not been challenged by petitioners, and is neither "wholly disproportionate" nor "grossly excessive" so as to violate due process. Rather, respondents assert that petitioners only complain as to the amount of the rent reduction, which they could have minimized by restoring the required services prior to September 1, [*685] 1989. Finally, respondents assert that petitioners' good faith may not be taken into consideration in fixing the amount of the rent reduction, as the sanction imposed is nondiscretionary and fixed by statute.

It is well settled that an article 78 proceeding is the proper method for determining whether a statute in a specific instance has been [***6] applied in an unconstitutional manner. An article 78 proceeding, however, is not the proper method of testing the general constitutionality of a statute ( Matter of R & G Outfitters v Bouchard, 101 AD2d 642). Petitioners herein do not challenge the general constitutionality of section 26-514 of the Rent Stabilization Law. Rather, petitioners assert that section 26-514 was applied to them by the DHCR in an unconstitutional manner. Petitioners assert that the DHCR's order reducing and freezing the rent for the period in question resulted in the imposition of a penalty estimated at $ 762,814.16 and as such is so large and disproportionate to the offense that it violates their due process rights. Petitioners argue that the penalty imposed upon them is unconstitutionally excessive because they acted in good faith to improve services. Petitioners further argue that the penalty is unconstitutionally excessive because the tenants suffered little or no actual injury. Finally, petitioners argue that the penalty imposed is unconstitutional because it has no relation to the statute's purpose.

It is well established that a civil penalty violates due process when it is "grossly excessive" [***7] or "so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable." ( St. Louis, Iron Mountain & S. Ry. Co. v Williams, 251 U.S. 63, 67; [**654] Browning-Ferris Indus. v Kelco Disposal, 492 U.S. 257.)

The DHCR, upon a finding of a reduction in essential services, is mandated by section 26-514 of the Rent Stabilization Law to reduce the tenants' rent to the guidelines level in effect in the tenants' prior lease, and to prohibit any further rent increases until such time as the services have been restored. The DHCR has no discretion in ordering such a rent reduction, and must follow the statutory formula for determining the amount of the rent reduction. ( Matter of Tenants of Hyde Park Gardens v State of New York, Div. of Hous. & Community Renewal, Off. of Rent Admin., 140 AD2d 351, affd 73 NY2d 998, supra.) Petitioners do not claim that a rent reduction pursuant to this formula, or a rent freeze itself is excessive.

[*686] The court finds that the rent reductions ordered by the DHCR are neither "grossly excessive" nor "wholly disproportionate" to the offense so as to be unreasonable and unconstitutional. The rent [***8] reductions mandated by section 26-514 upon a finding of reduction in essential services are payable or credited to each individual tenant. The amount in question is large only because the reduction in essential services lasted for a period of 5 years and 7 months, and affected a total estimated 602 tenants who reside in the complex. According to petitioners' calculations, the 209 tenants who joined in the decrease in services complaint will receive a refund of $ 609,929.73, and the 393 noncomplaining tenants will receive a total refund of $ 152,884.94 based solely on MCI increases. Thus, on an average, each complaining tenant will receive a refund of $ 2,918.32, which is equal to $ 43.55 per month or $ 522.68 per year for the entire 67-month period. The noncomplaining tenants, on an average, will receive a refund of $ 389.02, which is equal to $ 5.81 per month or $ 69.68 per year for the entire 67-month period. These refunds, per tenant, are clearly not excessive. Moreover, the Legislature, in fashioning a remedy to compensate tenants for the reduction in essential services, was not required to limit the sanction to the actual damages sustained by the tenants. (See, St. [***9] Louis, Iron Mountain & S. Ry. Co. v Williams, 251 U.S. 63, supra.) Petitioners may not relitigate the issue of reduction in essential services under the guise of a constitutional attack on the DHCR's order of March 9, 1990. In addition, petitioners may not reargue the issue of good faith. The rent reduction mandated by section 26-514 is nondiscretionary, and therefore the landlord's good faith may not be considered in calculating the amount of the rent reduction. The fact that this statutory provision is nondiscretionary does not render its application unconstitutional. Moreover, the issue of petitioners' good faith was argued by the DHCR before the Court of Appeals and implicitly rejected in Matter of Tenants of Hyde Park Gardens v State of New York, Div. of Hous. & Community Renewal, Off. of Rent Admin. (140 AD2d 351, affd 73 NY2d 998, supra).

Finally, the sanctions of a rent refund and rent freeze mandated by section 26-514 of the Rent Stabilization Law, and ordered by the DHCR, are clearly and reasonably related to the statutory goal of compelling a landlord to restore services, and affording tenants a measure of compensation for the period that these services [***10] were not provided. In addition, these sanctions serve the governmental interest in the preservation [*687] and maintenance of the rental housing stock in New York City. (Administrative Code § 26-501.) It is clear that it was only the imminent imposition of a rent reduction and rent freeze which compelled petitioners to restore the security services on September 1, 1989. Petitioners took no steps to restore these services prior to the Court of Appeals decision. Petitioners, however, were not parties to that litigation, and their appeals of the essential services issue ended on October 18, 1988 when the Court of Appeals denied leave to appeal from the Appellate Division's determination. ( Matter of Hyde Park Assocs. v New York State Div. of Hous. & Community [**655] Renewal, 140 AD2d 351, lv denied 72 NY2d 809, supra.) Petitioners thus could have restored essential services after October 18, 1988, without forfeiting any right to appeal, and could have reduced the period of the rent refunds by nearly a year. Contrary to petitioners' assertions, they did not have to await an order of a rent reduction, in order to restore essential services, and the DHCR [***11] could not have extended the refund beyond the date the essential services were restored. (See, Administrative Code § 26-514.)

Accordingly, the court finds that section 26-514 of the Rent Stabilization Law was constitutional as applied to the petitioners and that the rent refund ordered by the DHCR on March 9, 1990 was not "excessive" nor "wholly disproportionate" and therefore the petition is dismissed.

[Portions of opinion omitted for purposes of publication.]
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Postby TenantNet » Fri Jun 30, 2006 7:19 am

In the Matter of Hyde Park Associates, et al., petitioners-appellants, v Richard Higgins, etc., et al., respondents; Thrift Associations Service Corporation, intervenor-appellant.

91-01071

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT

191 A.D.2d 440; 594 N.Y.S.2d 57; 1993 N.Y. App. Div. LEXIS 1741


February 2, 1993, Submitted
March 1, 1993, Decided

COUNSEL: [**1] White & Case, New York, N.Y. (Philip H. Schaeffer, Jane D. Connolly, and Theodore R. Snyder of counsel), for petitioners-appellants.

Cadwalader, Wickersham & Taft, New York, N.Y. (Terence F. Gilheany, Michael A. Perino, and Jamie B. Smith of counsel), for intervenor-appellant Thrift Associations Service Corporation.

Dennis B. Hasher, Bronx, N.Y. (Richard Hartzman of counsel), for respondent Division of Housing and Community Renewal.

Richard Creditor, Forest Hills, N.Y., for respondents tenants of New Hyde Park Gardens.

JUDGES: ALBERT M. ROSENBLATT, J.P., CHARLES B. LAWRENCE, CORNELIUS J. O'BRIEN, JOHN COPERTINO, JJ.

OPINION: [*58] DECISION & ORDER

In a proceeding pursuant to CPLR article 78 to review a determination of the New York State Division of Housing and Community Renewal, dated March 9, 1990, which ordered a rent reduction, Hyde Park Associates and Hyde Park Owners Corp. appeal from so much of a judgment of the Supreme Court, Queens County (Leviss, J.), dated January 15, 1991, as dismissed the petition, and intervenor Thrift Associations Service Corporation separately appeals from so much of the same judgment as dismissed its cross claim against the respondent [**2] Division of Housing and Community Renewal.

ORDERED that the judgment is affirmed, with one bill of costs to the respondents appearing separately and filing separate briefs, payable by the appellants appearing separately and filing separate briefs.

In Matter of Hyde Park Assocs. v New York State Div. of Hous. & Community Renewal (140 AD2d 351), this court affirmed the judgment of the Supreme Court which confirmed the determination of the respondent Division of Housing and Community Renewal (hereinafter the DHCR) finding a reduction in services. We also agreed with the Supreme Court that, having found a reduction in services, the DHCR was required by Administrative Code of the City of New York § 26-514 to order a rent reduction. The Court of Appeals agreed as well, and the matter was remitted to the DHCR for a determination of the amount of the rent reduction (see, Matter of Tenants of Hyde Park Gardens v State of New York Div. of Housing & Community Renewal Off. of Rent Admin., 73 NY2d 998).

Accordingly, upon remittitur, the DHCR ordered a rent reduction for the complaining tenants in the amount of all rent increases from February 1, 1984, the first rent payment day after the [**3] DHCR informed the owner of the tenants' complaints, to September 1, 1989, which the DHCR determined to be the date that services were restored. In addition, the DHCR ordered a refund of major capital improvement rent increases for all tenants for the same period. An accounting firm retained by the petitioners calculated the total rent reduction for the 67-month period of reduced services to be $ 762,814.67.

The petitioners commenced this proceeding to review the DHCR determination, on [*59] the ground that, inter alia, the application of the Administrative Code § 26-514 in this case constitutes a denial of due process. Thrift Associations Service Corporation (hereinafter TASCO), as holder of a mortgage on the property, was granted leave to join the proceeding as an intervenor.

We find no merit to the petitioners' contention that the rent reduction is so excessive or wholly disproportionate to the offense as to shock the conscience (see, Matter of Pell v Board of Educ., 34 NY2d 222, 231; cf., Matter of Milevoi v Conciliation & Appeals Bd. of City of NY., 137 AD2d 533, 535-536). Nor do we find the rent reduction to be a denial of procedural due process (see, Matter of Colton [**4] v Riccobono, 67 NY2d 571, 576). In addition to the financial incentive for landlords to maintain services, Administrative Code § 26-514 provides a remedy for tenants who have paid rent increases during periods of decreased services (see, Administrative Code of City of NY § 26-514). While the petitioners were free to avail themselves of the judicial process, the tenants should not be made to suffer because the petitioners did not restore services until all appeals were exhausted.

Equally without merit is TASCO's argument that its cross claim against the DHCR should not have been dismissed. Cross claims are not permitted in special proceedings absent leave of court (see, Matter of O'Connor v D'Apice, 156 AD2d 610, 612). TASCO did not request, and was not granted, leave to file a cross claim, and the Supreme Court properly dismissed the cross claim on the motion of the DHCR.

ROSENBLATT, J.P., LAWRENCE, O'BRIEN and COPERTINO, JJ., concur.
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