DHCR also relied on RSC § 2527.7, captioned “Pending Proceedings,” which states in its entirety:
Except as otherwise provided herein, unless undue hardship or prejudice results therefrom, this Code shall apply to any proceeding pending before the DHCR, which proceeding commenced on or after April 1, 1984, or where a provision of this Code is amended, or an applicable statute is enacted or amended during the pendency of a proceeding, the determination shall be made in accordance with the changed provision.
DHCR, attempting to balance the equities, ruled that the landlord would get the benefit of the new regulation (which resulted in the dismissal of the tenant’s FMRA), while the tenant, in turn, would be relieved of the obligation of paying rent arrears occasioned by DHCR’s initial determination in her favor.
Second Article 78 Action
The landlord brought an Article 78 proceeding to challenge DHCR’s May 25, 2004 order. The matter was assigned to Justice Edward H. Lehner, who ruled on Feb. 9, 2005.1 Justice Lehner held that DHCR, even though broadly empowered to consider the “equities,” had no authority to forgive rent arrears:
DHCR acknowledges that there are no specific regulations or guidelines in effect at the agency to enable it to determine in which cases past due rent may be waived. Its reliance on § 2522.7 is misplaced as the consideration of the equities authorized therein relates to the issuance of an ‘order adjusting or establishing any legal regulated rent’. Whatever discretion is provided therein thus only authorizes the consideration of equitable principles in fixing the amount of the legal rent.
