Ralph Carbone
May 25, 2000

My name is Ralph F. Carbone. I am President of District Council 37, Local 1359, AFSCME, AFL-CIO. I am also a member of the DC 37 Housing Committee. Moreover, I have been in the field of rent regulation for almost 18 years as an attorney, and, for the record, been employed by the DHCR for the past 16 years.

Before I touch upon the substance of the proposed revisions, I must comment on the method that DHCR used to present these amendments to the public. The process utilized appears deliberately designed to confuse and to obfuscate. In many instances a reader is required to go back and forth from the existing code to the revisions; sometimes the deletions are specified, other times they are merely referred to; at times the new material is underlined, in other instances it is not. Rather than creating a clear and concise document using the existing code with all additions underlined and all deletions [bracketed] -- the code as it currently exists is complicated and complex enough -- the agency performed a gross disservice to the public by, in effect, attempting to bury the very pro-landlord amendments to this revised code.

Substantively, it appears the agency choose, in many instances, to legislate rather than simply codify existing judicial precedents and changes and/or additions to New York state and city law.

For example, a proposed revision to section 2526.1 is ultra vires. That section requires the first tenant after luxury decontrol to file a complaint of rent overcharge with the agency within 90 days of taking occupancy. This is incorrect. Such tenant has four years within which to file a complaint of this nature. It is patently hypocritical to, throughout the proposed code, emphasize the four year rule (including in this very section!) when it appears to benefit owners, but only provide a tenant of a luxury decontrolled apartment 90 days in which to file such a complaint. It's not in the law. The agency has badly overreached.

Section 2527-A.9 is insufficient, based on various New York state Court of Appeals decisions, to codify excusable tenant defaults in luxury decontrol applications. This is especially true when one of the prime purposes of the amendments to the code is, as previously stated, to update it based on judicial decisions. Moreover, the agency currently has a policy on excusable defaults. Throughout the revised code, the DHCR has attempted to codify its primarily pro-landlord policies. Why then has the agency refused to codify what could easily be considered (even though mandated by the Court of Appeals) a tenant friendly policy?

Revisions to section 2523.4 of the code create a chilling effect on tenants who would otherwise desire to file a service complaint with the DHCR and appear designed to discourage them from initiating such complaints. First, there is no "four year rule" for determining what is or is not a required service and any such requirement, even if the agency attempts to describe the service as "de-minimis", is ultra vires. The Rent Stabilization Law (RSL) sets the base date for services and the code cannot supersede the law. The agency has apparently also chosen to go out of the heat and hot water complaint business. To codify a requirement that a tenant must first go to another governmental agency to get a violation finding for this service prior to filing a DHCR complaint, when its own inspectors are perfectly capable of handling this type of complaint, is an affront to the RSL's mandate that owners maintain services. And the agency is required to implement the RSL and not excuse itself from its precepts. Moreover, the burden upon tenants to, in many instances, obtain a licensed architect or engineer to dispute the report of an owner's expert concerning the provision and maintenance of services, needlessly puts an expensive cost upon low and moderate income tenants who are simply asking for a level of services to which they are entitled under law. What makes this burden even more egregious is that it is totally unnecessary as agency inspectors can easily verify whether services are being maintained. Finally, in other testimony before the state legislature, I have already criticized the agency's procedural hurdles used to prevent tenants from filing service complaints (e.g., the 10 to 60 day time periods, attaching copies of letters to owner to the complaint, etc.).

Revisions to code section 2520.6(f) obliterate the definition of the term "base date". As presently written, in the absence of a f air market rent appeal or rent overcharge complaint, there is no base date under the revised code. One wonders on what an MCI or hardship rent increase will be based upon. And the agency seems to forget that a base date for services also needs to exist. Moreover, the legislature in 1983 went to great lengths to create a central registry of rents which would be maintained by the DHCR. For all practical purposes such requirement should now be scrapped because the agency apparently will no longer utilize or need such data. The agency must establish a properly defined base date.

There are so many other sections which weaken rent protections they are almost too numerous to mention. Here are a few:

* The loosened regulations for substantial rehabilitation allow owners to deregulate non-rehabilitated units and units subject to $1 "fire orders", as well as apartments unoccupied due to vacate orders from other governmental agencies, upon the legal vacature of the tenant in occupancy at the time of the triggering event. These rules should be stricken from the revised code.

* Deconversion of cooperatives or condominiums results in a market rent being charged the tenant in occupancy if it has been more than four years since the apartment was subject to regulation. Since most "deconverted" tenants will be the previous tenant in occupancy (or former owner) who has already suffered the equity loss of the value of his apartment, the rent should not be free market (where the tenant can be thrown out to boot) but the former maintenance amount for the unit.

* Section 2520.11 permits the luxury decontrol of units regardless of whether a rent of $2000 or more is charged if the owner can demonstrate that such a rent could have been charged! A fundamental principle of rent regulation has always been that the rent charged and paid is to be utilized to determine a legal rent (not a hypothetical rent the owner could have charged but, for market conditions for example, was unable to charge). This language should be excised.

* Multiple 20% vacancy allowances during the same guidelines period are now permitted [section 2522.5(f)] regardless of the short duration of any tenancy (e.g., one month) . During the period before the rent guidelines board limited such allowances to one per guideline period, the New York City Conciliation and Appeals Board (the predecessor to DHCR) instituted a "90 day rule" before such multiple increases could be granted even though there was no explicit regulation limiting such increases at that time. The CAB was upheld on its policy by the courts. The agency should also specify such a policy.

* No waiver for tenants who install dishwashers, dryers or washing machines to a surcharge to their rents regardless of the date of installation or whether the owner or its agents were aware of the installation (section 2522.9) . This change overturns decades of prior decisions where an owner was deemed to have waived its right to remove or charge for the item which had long been in use in the tenant's apartment unless it constituted a nuisance.

* Weakened the reduction in rent for failure to maintain services section (see 2523.4) by allowing owners to collect MCI and individual apartment improvement rent increases so long as the rent reduction order was issued after the increase was collected from the tenant even though the effective date of the order reducing rent was prior to the collection of such increase I The purpose of the legislative policy is to penalize an owner for its failure to maintain services by reducing and then freezing the tenant's rent. As this goes against that policy, this part of the section should be excised.

* Deemed leases [section 2523.5(c)). Regardless of whether the owner provides a legally proper renewal lease to the tenant, said owner will be permitted to charge a guideline increase (it doesn't say for one or two years, another defect in the section) to that tenant. Currently, an owner is obligated to offer a tenant a lease renewal extension agreement on a DHCR form (RTP-8). Many owners don't. Others do but at an incorrect rent. Tenants have not had to accept these offers. However, now, regardless, an owner will get an increase "deemed" for the apartment. This amendment should be revoked.

* Tenant harassment of owners [section 2524.3(b)]. Previously attempted to be placed in the existing code in 1987 was excised as being improperly promulgated by the agency. Now the agency is trying it again. This time, however, DHCR has expanded the definition. It now not only includes acts by a tenant against an owner (or other tenants) in the tenant's building, but also includes acts the tenant purportedly commits in an adjacent building or structure! So a tenant may now be evicted by his/her own landlord for acts allegedly committed against a completely different owner or tenants in an adjoining building. This amendment is designed to harass tenants and should be excised. The current nuisance statutes adequately cover tenant conduct.