| Matter of Ellis v Division of Hous. & Community Renewal of State ofN.Y. |
| 2007 NY Slip Op 08459 [45 AD3d 594] |
| November 7, 2007 |
| Appellate Division, Second Department |
| In the Matter of Fred Ellis, Respondent, v Division ofHousing and Community Renewal of State of New York, Appellant. |
—[*1] Rappaport, Hertz, Cherson & Rosenthal, P.C., Forest Hills, N.Y. (David I. Paul of counsel),for respondent.
In a proceeding pursuant to CPLR article 78 to review a determination of the DeputyCommissioner of the New York State Division of Housing and Community Renewal, sued hereinas Division of Housing and Community Renewal of State of New York, dated October 7, 2005,which confirmed a determination of the rent administrator dated June 21, 2005, that the tenantwas entitled to treble damages for a rent overcharge, the New York State Division of Housingand Community Renewal, sued herein as Division of Housing and Community Renewal of Stateof New York, appeals from a judgment of the Supreme Court, Kings County (Ruchelsman, J.),dated May 25, 2006, which granted the petition and annulled the determination.
Ordered that the judgment is reversed, on the law, without costs or disbursements, thedetermination dated October 7, 2005, is confirmed, the petition is denied, and the proceeding isdismissed on the merits.
From 1982 to 2000 the tenant paid the sum of $300 per month as rent for his apartment inPark Slope, Brooklyn, although he occupied the apartment without a lease since 1984. InDecember 2000, without entering into a renewal lease, the owner of the apartment increased therent to the sum of $400 per month, which the tenant paid. On November 15, 2004 the tenant filedan overcharge complaint with the New York State Division of Housing and CommunityRenewal, sued herein as Division of Housing and Community Renewal of State of New York(hereinafter the DHCR). The Rent Administrator of the DHCR found that the owner overchargedthe tenant, and awarded the tenant treble damages. The Deputy Commissioner of the DHCRupheld the rent [*2]administrator's determination. However, theSupreme Court granted the owner's petition to set it aside, finding that no overcharge occurredbecause the increased rent was well below market value. We reverse.
In reviewing a determination made by an administrative agency such as the DHCR, thecourt's inquiry is limited to whether the determination is arbitrary and capricious, or without arational basis in the record and a reasonable basis in law (see CPLR 7803 [3]; Matterof Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale &Mamaroneck, Westchester County, 34 NY2d 222, 231 [1974]; Matter of ATM One, LLC v New YorkState Div. of Hous. & Community Renewal, 37 AD3d 714 [2007]). "An agency'sinterpretation of the statutes and regulations that it administers is entitled to deference, and mustbe upheld if reasonable" (Matter of ATM One, LLC v New York State Div. of Hous. &Community Renewal, 37 AD3d at 714).
The rent administrator correctly determined that in the absence of a renewal lease the legalregulated rent was $300 per month, that is, the rent charged on the base date, which was fouryears prior to the filing of the rent overcharge complaint (see Administrative Code ofCity of NY § 26-516 [a] [2]; 9 NYCRR 2526.1 [a] [3] [i]). Therefore, contrary to theSupreme Court's determination, the rent administrator's finding of an overcharge was notarbitrary and capricious (see Matter ofAVJ Realty Corp. v New York State Div. of Hous. & Community Renewal, 8 AD3d 14,18 [2004]; Matter of Hatanaka v Lynch, 304 AD2d 325, 326 [2003]; Matter ofMcCarthy v New York State Div. of Hous. & Community Renewal, 290 AD2d 313, 314[2002]). Further, the rent administrator rationally found that the owner failed to demonstrate by apreponderance of the evidence that the overcharge was not willful (see AdministrativeCode of City of NY § 26-516 [a]; Matter of DeSilva v New York State Div. of Hous. & Community RenewalOff. of Rent Admin., 34 AD3d 673, 674 [2006]; Matter of Ador Realty, LLC v Division of Hous. & CommunityRenewal, 25 AD3d 128, 141-142 [2005]). Accordingly, the rent administrator'simposition of treble damages was not arbitrary and capricious.
Under such circumstances, the rent administrator's determination was properly upheld by theDeputy Commissioner of the DHCR, and the Supreme Court erred in granting the petition toannul the determination of the Deputy Commissioner of the DHCR. Crane, J.P., Goldstein,Florio and Dillon, JJ., concur.