427 W 51 ST OWNERS CORP. v. DHCR

• Decision Date: 18 November 2004
• Citation: 819 N.E.2d 1032,786 N.Y.S.2d 416,3 N.Y.3d 337
• Parties: In the Matter of 427 WEST 51ST STREET OWNERS CORP., Appellant, v. DIVISION OF HOUSING AND COMMUNITY RENEWAL, Respondent.
• Court: New York Court of Appeals Court of Appeals

3 N.Y.3d 337

819 N.E.2d 1032

786 N.Y.S.2d 416

In the Matter of ST STREET OWNERS CORP., Appellant, v. DIVISION OF HOUSING AND COMMUNITY RENEWAL, Respondent.

Court of Appeals of the State of New York.

Argued October 20, 2004.

Decided November 18, 2004.

Kucker & Bruh, LLP, New York City (Nativ Winiarsky and Patrick K. Munson of counsel), for appellant.

Caroline M. Sullivan, New York City, and Marcia P. Hirsch for respondent.

Chief Judge KAYE and Judges G.B. SMITH, CIPARICK, ROSENBLATT, GRAFFEO and R.S. SMITH concur.

OPINION OF THE COURT

READ, J.

On October 2, 1996, 51 tenants of a rent-stabilized building owned by respondent landlord applied to the Division of Housing and Community Renewal (DHCR) for a rent reduction based on a diminution of building services, including loss of 24-hour access to the basement (see 9 NYCRR 2520.6 [r]; 2523.4). On September 8, 1997, DHCR issued an order generally favoring the tenants and granting a rent reduction, but determining that the complained — of cutback in basement access was a de minimis condition not warranting a finding of decreased services (9 NYCRR 2523.4 [e]). On September 22, 1997, a tenants' representative filed a timely petition for administrative review (PAR) to contest the de minimis finding.

DHCR's regulations provide that a PAR may be filed on behalf of tenants by a representative who verifies the PAR "provided that such representative includes, at the time of the filing of the PAR, written evidence of authorization to act in such representative capacity for the purpose of filing the PAR" (9 NYCRR 2529.1 [b] [2]). Further, DHCR's instructions accompanying the PAR form allow a representative of a building-wide tenant organization to file a PAR on behalf of all the organization's members. The representative must attach "either a resolution of the organization authorizing such representative filing, or if an officer of the organization is empowered to authorize such representative filing, the authorization of such officer." The instructions also require the representative to attach "a statement that the representative is filing on behalf of all members of the organization . . . and a current roster of the organization's members." In this case, a verified PAR was filed by the co-chair of the tenants' association, who had corresponded with DHCR on the tenants' behalf while the original complaint was pending. She attached a statement authorizing her to pursue the PAR in a representative capacity. This statement was signed by six individuals who identified themselves as members of the building's tenants' association committee. She also attached a copy of the lists of signatures and addresses of the 51 tenants provided with the original complaint, which included her own name and address as well as the names and addresses of the six members of the committee.

On April 22, 1998, DHCR granted the PAR insofar as there was insufficient basis for finding that curtailment of 24-hour access to basement facilities was de minimis. DHCR remanded the matter for further consideration, with notice to the tenants whose names were on the lists attached to the PAR. Thirty-three of the tenants responded, and these responses were forwarded to the landlord. DHCR held a hearing at which five of the tenants testified, including three whose names appeared only on the lists; the landlord did not appear.

On March 28, 2000, DHCR issued an order finding a reduction in service on account of the loss of 24-hour access to the basement, and directing a rent reduction for the 51 tenants. This caused the landlord to file a PAR on May 2, 2000 to challenge both the order's substance and its scope. On October 3, 2000, DHCR issued an order upholding the finding of decreased services, but agreeing with the landlord that those tenants whose reproduced signatures appeared on the September 22, 1997 PAR had not properly appealed the original order. Accordingly, DHCR revoked its March 28, 2000 order with respect to those tenants.

The tenants commenced a CPLR article 78 proceeding to contest DHCR's decision, and moved to modify DHCR's October 3, 2000 order to include all 51 tenants. DHCR cross-moved to remit for reconsideration. On May 9, 2001, Supreme Court denied the tenants' motion and granted DHCR's cross motion. On October 15, 2001, DHCR sent letters to the 51 tenants, briefly outlining what had happened and advising that "proper procedure should have been for DHCR to have first given all of the complaining tenants a chance to submit an affirmation authorizing the tenants' representative to sign the September [22], 1997 PAR on their behalf." DHCR enclosed its supplemental form for an application for a rent reduction based upon decreased building-wide services, and instructed the tenants to return the signed form within 21 days if they wished to authorize the tenants' association's co-chair to represent them in the September 22, 1997 PAR. Thirty-five tenants returned a signed form to DHCR.

On January 9, 2002, DHCR issued...