Use Five Arguments to Avoid Rent Cuts Over Service Complaints

As an apartment building owner, you constantly face the prospect of rent-stabilized and rent-controlled tenants getting rent cuts over service complaints. The Division of Housing and Community Renewal (DHCR) has the authority to grant rent cuts for a wide variety of service problems.

For rent-stabilized tenants, the DHCR can order a rent cut equal to the latest rent guidelines increase you took from the tenant. The effective date for rent-stabilized tenants is retroactive to the first day of the month following the DHCR’s service of the complaint on the owner. This can be particularly costly if tenants have grouped together to complain about building-wide service problems.

For rent-controlled tenants, the DHCR has discretion to vary the amount of the rent cut according to the type of service decrease it finds. For rent-controlled tenants, the effective date is the first day of the month after the rent reduction order is issued.

To help you defend yourself against these service complaints and avoid a rent cut, we’ve come up with five arguments you can use. While we can’t guarantee that each argument is foolproof and will work every time, we can assure you that, if used correctly, these arguments will greatly increase your chances of success when defending against a service complaint.

Argument #1: Complaint Involves Minor Service Problem

Section 2523.4(e) of the Rent Stabilization Code says that certain minor service problems don’t rise to the level of a decrease in services warranting a rent cut. The code describes these problems as conditions that have only a minimal impact on tenants, don’t affect their use and enjoyment of the premises, and may exist despite regular maintenance of services.

The code lists 31 specific problems that are minor conditions that aren’t decreases in service. Of these, 25 are building-wide conditions. They include things like minor areas of peeling paint and plaster in a building’s common area and a missing elevator inspection certificate. The other six problems are individual apartment conditions—for example, chips on an appliance, countertop, fixture, or tile surface are specifically listed as conditions not constituting a decrease in service. (For your convenience, we’ve reproduced the Rent Stabilization Code’s Schedule of Minor Service Conditions at the end of this article.) If the tenant complains about a minor problem listed in the code, you can ask the DHCR to dismiss the complaint.

The code says that this list isn’t all-inclusive. So if a tenant complains about a minor problem that’s not listed, you can still ask the DHCR to dismiss the tenant’s complaint. In several recent rulings, the DHCR found that problems not specifically listed in the code were minor ones that didn’t warrant rent cuts. These problems included:

• Rent-stabilized tenants complained of missing, broken, and loose cable wires, and mismatched tiles outside one apartment [35 St. Nicholas Terrace: DHCR Adm. Rev. Docket No. ZG430024RT, January 2013].
• Errors made on the building’s directory of tenant names. The directory contained the names of some tenants who had died or moved away. But no tenant complained that his or her name was omitted from the directory [706 Riverside Drive: DHCR Adm. Rev. Docket No. YD430037RT, January 2011].
• Current replacement oven is smaller than the original one [Weisberg: DHCR Adm. Rev. Docket No. BP210021RT, August 2013].

Arguments to make: If tenants complain about a defective condition that the code specifically lists as minor such as a missing elevator inspection certificate, your answer might say something like this:

The missing elevator inspection certificate, complained of by the tenants, is a minor condition that doesn’t constitute a decrease in service. Rent Stabilization Code Section 2523.4(e) says that minor conditions shouldn’t be treated as service decreases. These are conditions that have only a minimal impact on the tenants and don’t affect their use and enjoyment of the premises. The code specifically lists a missing elevator inspection certificate as a minor condition that isn’t a service decrease. The elevator at the subject building works properly and is unaffected by the missing certificate.

If a tenant complains about a minor problem that isn’t specifically listed in the code, such as a loose handle on a medicine cabinet, your answer might say something like this:

The loose handle on the medicine cabinet, complained of by the tenant, is a minor condition that doesn’t constitute a decrease in service. At most, the condition calls for a minor adjustment that doesn’t warrant a rent cut. Rent Stabilization Code Section 2523.4(e) says that minor conditions shouldn’t be treated as service decreases. These are conditions that have only a minimal impact on the tenants and don’t affect their use and enjoyment of the premises. The loose handle on the medicine cabinet is a minor condition as defined in the code. The medicine cabinet door can still be opened and closed.

Argument #2: Tenant Waited Too Long to Complain

Rent Stabilization Code Section 2523.4(f)(1) allows the DHCR to consider how long the tenant took to complain about the alleged problem. It presumes that the longer the tenant waited to complain, the greater the chance that the problem was a minor one. In other words, if neither the tenant nor any other tenants filed complaints with the DHCR about the service within four years after you allegedly stopped or reduced the service, it’s presumed that the problem is a minor one not warranting a rent cut. This puts the burden on the tenant to come up with proof that the problem wasn’t minor.

If the tenant waited too long before complaining about a service problem, raise this in your answer and ask the DHCR to dismiss the complaint.

Argument to make: If a tenant files a service complaint claiming that you stopped providing—or reduced—a service more than four years before he filed the complaint, your answer should say something like this:

The DHCR should dismiss the tenant’s claims concerning the alleged decrease in service. The tenant filed his complaint on [insert date tenant filed complaint]. The tenant claims that the alleged service decrease occurred on [insert date tenant claims that services were reduced]. That date is more than four years before the date the tenant filed his service complaint. Also, no other tenant has filed a complaint regarding this condition. Under Rent Stabilization Code Section 2523.4(f)(1), the passage of four years or more during which a disputed service was not provided and during which no complaint was filed regarding the disputed service is “presumptive evidence” that the service or condition is de minimis and doesn’t warrant a rent cut.

Argument #3: Court-Ordered Rent Cut for Same Condition

Rent Stabilization Code Section 2523.4(h) says you shouldn’t get hit with a double penalty for the same service problem. This means that the DHCR must offset any rent cut it orders for defective conditions by the amount of any rent cut for the same conditions that a court has ordered. So if a tenant complains about a condition for which she already got a rent abatement from the court, you should be able to avoid a DHCR-ordered rent cut for the months of the court-ordered rent abatement. To help support your claim, include with your answer a copy of the court order granting the tenant a rent abatement.

In one case, a rent-stabilized tenant complained of a reduction in services based on a defective stove. But in a prior housing court proceeding, the owner had sued to evict the tenant for nonpayment of rent. The court ruled for the owner. The tenant owed $18,000 in rent after the landlord gave the tenant a $1,000 rent credit and a 20 percent rent abatement for 60 days based on the stove problems. So the tenant was barred by the court ruling from seeking further rent reductions from the DHCR [Strujan v. DHCR: Index No. 402728/10, February 2011].

Argument to make: If a tenant complains about a problem for which you already got a court-ordered rent abatement, your answer should include language like this:

The housing court has already issued a rent abatement for the same service problem alleged by the tenant. Enclosed is a copy of that housing court order dated [insert date]. Rent Stabilization Code Section 2523.4(h) requires the DHCR to offset any rent cut it orders by the court-ordered rent abatement.

Argument #4: Service Restored Before DHCR Inspection

The DHCR won’t order a rent cut if you’ve restored the service or condition as of the DHCR inspection. If the inspector finds everything working, no rent cut should be imposed.

In one case, a rent-stabilized tenant complained of a reduction in services based on a number of conditions in her apartment. The DRA ruled against the tenant, who appealed and lost. Under DHCR Policy Statement 90-2, if a landlord restores services before a DHCR inspection is conducted, no rent reduction is ordered. The tenant had complained in April 2009 that her bathroom toilet, bedroom floor, bedroom window screens, living room window screens, and vermin control weren’t being maintained. In July 2009, the landlord stated that all repairs had been made. In December 2009, the tenant claimed that repairs hadn’t been completed. In January 2010, DHCR inspection showed that all services had been restored. So the DRA properly found that no rent reduction was warranted [High: DHCR Adm. Rev. Docket No. ZB210015RT, December 2011].

Argument to make: If the service that a tenant complained about was restored before the DHCR inspection, your answer to the tenant’s complaint might say something like this:

The tenant’s complaint should be dismissed because the service complained about was restored before the DHCR inspection took place. [Insert facts regarding service complained about, when you restored it, and when the DHCR conducted its inspection.] This agency has ruled that no rent cut should be ordered if the owner restores the service between the time the complaint was filed and the time the DHCR conducts its inspection. See High: DHCR Adm. Rev. Docket No. ZB210015RT (12/9/11).

Argument #5: Tenant Didn’t Send Prior Notice Before Filing Complaint

If a tenant files a service reduction complaint that involves non-emergency conditions, the tenant needs to first contact the owner in writing. If this doesn’t resolve the tenant’s grievance, the tenant must use the correct form for his complaint and attach a copy of his letter to the owner or manager with proof of mailing or delivery. Without prior notice to the owner, the DHCR should dismiss the tenant’s claim.

In one case, a rent-stabilized tenant complained of a reduction in building-wide services based on elevator service defects and other conditions. The district rent administrator (DRA) advised the tenant that it would accept the elevator complaint on an emergency basis, but that the tenant failed to include required proof of prior notice to the landlord about the other conditions with her complaint. The owner denied that there were any service reductions, and the DHCR inspection showed the elevator was working. The DRA dismissed the tenant’s complaint. The DRA correctly dismissed the tenant’s other claims because she didn’t notify the landlord before filing the complaint [3000 Ocean Parkway: DHCR Adm. Rev. Docket No. YK210003RT, May 2011].

Argument to make: If a tenant files a service complaint without having sent prior written notice to the owner, your answer can say something like this:

The DHCR should dismiss this complaint because the tenant did not provide prior notice to the owner before filing the complaint. The DHCR has ruled that this should result in dismissal of the complaint. See 3000 Ocean Parkway: DHCR Adm. Rev. Docket No. YK210003RT (5/20/11).

 

RENT STABILIZATION CODE’S SCHEDULE OF MINOR SERVICE CONDITIONS

Here’s the list of building-wide and individual apartment service problems that Rent Stabilization Code Section 2523.4(e) says are minor conditions that don’t warrant a rent cut.

BUILDING-WIDE CONDITIONS

1. AIR CONDITIONER. Failure to provide in lobby, hallways, stairwells, and other non-enclosed public areas.

2. BUILDING ENTRANCE DOOR. Removal of canopy over unlocked door leading to vestibule; changes in door-locking devices, where security or access is not otherwise compromised.

3. CARPETING. Change in color or quality under certain circumstances; isolated stains on otherwise clean carpets; frayed areas which do not create a tripping hazard.

4. CLOTHESLINES. Removal of, whether or not dryers are provided.

5. CRACKS. Sidewalk cracks which do not create a tripping hazard; hairline cracks in walls and ceilings.

6. DECORATIVE AMENITIES. Modification (e.g., fountain replaced with rock garden); removal of some or all for aesthetic reasons.

7. ELEVATOR. Failure to post elevator inspection certificates; failure to provide or maintain amenities (e.g., ashtray, fan, recorded music).

8. FLOORS. Failure to wax floors; discrete areas in need of cleaning or dusting, where there is evidence that janitorial services are being regularly provided and most areas are clean (See JANITORIAL SERVICES, item 12).

9. GARAGE. Any condition that does not interfere with the use of the garage or an assigned parking space (e.g., peeling paint where there is no water leak).

10. GRAFFITI. Minor graffiti inside the building; any graffiti outside the building where the owner submits an affidavit of ongoing maintenance indicating a reasonable time period when the specific condition will be next addressed.

11. LANDSCAPING. Modification; failure to maintain a particular aspect of landscaping where the grounds are generally maintained.

12. JANITORIAL SERVICES. Failure to clean or dust discrete areas, where there is evidence that janitorial services are being regularly provided because most areas are, in fact, clean.

13. LIGHTING IN PUBLIC AREAS. Missing light bulbs where the lighting is otherwise adequate.

14. LOBBY OR HALLWAYS. Discontinuance of fresh cut flowers; removal of fireplace or fireplace andirons; modification of furniture; removal of some furnishings (determined on a case by case basis); removal of decorative mirrors; reduction in lobby space where reasonable access to tenant areas are maintained; elimination of public area door mat; failure to maintain a lobby directory that is not associated with a building intercom; removal or replacement of window coverings (See DECORATIVE AMENITIES, item 6).

15. MAIL DISTRIBUTION. Elimination of door-to-door or other methods of mail distribution where mailboxes are installed in a manner approved by the U.S. Postal Service.

16. MASONRY. Minor deterioration; failure to point exterior bricks where there is no interior leak damage.

17. PAINTING. Change in color in public areas under certain circumstances (e.g., not in violation of the New York City Housing Maintenance Code); replacement of wallpaper or stenciling with paint in the public areas; isolated or minor areas where paint or plaster is peeling, or other similarly minor areas requiring repainting, provided there are no active water leaks; any painting condition in basement or cellar areas not usually meant for or used by tenants; any painting condition that is limited to the top-floor bulkhead area provided there is no active water leak in such area.

18. RECREATIONAL FACILITIES. Modifications, such as reasonable substitution of equipment, combination of areas, or reduction in the number of items of certain equipment where overall facilities are maintained (See ROOF, item 19).

19. ROOF. Discontinuance of recreational use (e.g., sunbathing) unless a lease clause provides for such service, or formal facilities (e.g., solarium) are provided by the owner; lack of repairs where water does not leak into the building or the condition is not dangerous.

20. SINKS. Failure to provide or maintain in compactor rooms or laundry rooms.

21. STORAGE SPACE. Removal or reduction of, unless storage space service is provided for in a specific rider to the lease (not a general clause in a standard form residential lease), or unless the owner has provided formal storage boxes or bins to tenants within three years of the filing of a tenant’s complaint alleging an elimination or a reduction in storage space service.

22. SUPERINTENDENT/MAINTENANCE STAFF/MANAGEMENT. Decrease in the number of staff, other than security, provided there is no decrease in janitorial services; elimination of on-site management office; failure to provide an on-site superintendent, provided there is no decrease in janitorial services.

23. TELEVISION. Replacement of individual antennas with master antenna; visible cable; television wires; or other technologies.

24. TOILET IN PUBLIC AREAS. Removal of (except in buildings containing Class B units).

25. WINDOWS. Sealed, vented, basement or crawl space windows, other than in areas used by tenants (e.g., laundry rooms); cracked fire-rated windows; peeling paint or other non-hazardous condition of exterior window frames.

INDIVIDUAL APARTMENT CONDITIONS

1. APPLIANCES AND FIXTURES. Chips on appliances, countertops, fixtures, or tile surfaces; color-matching of appliances, fixtures, or tiles.

2. CRACKS. Hairline cracks; minor wall cracks, provided there is no missing plaster or no active water leak.

3. DOORS. Lack of alignment, provided condition does not prevent proper locking of entrance door or closing of interior door.

4. FLOOR. Failure to provide refinishing or shellacking.

5. NOISE. Caused by another tenant.

6. WINDOW FURNISHINGS. Failure to re-tape or re-cord venetian blinds.