Appeal, on the ground of inadequacy, and cross appeal from a judgment of the Civil Court of the City of New York, Queens County (Inez Hoyos, J.), entered October 2, 2013. The judgment, after a nonjury trial, awarded tenant $5,400 on his counterclaim for rent overcharge in a holdover summary proceeding.

ORDERED that the judgment is reversed, without costs, and the matter is remitted to the Civil Court for the entry of a judgment dismissing tenant's rent-overcharge counterclaim without prejudice to tenant seeking relief at the Division of Housing and Community Renewal in accordance with the decision herein.

In September 2012, tenant filed a rent overcharge complaint with the Division of Housing and Community Renewal (DHCR) in connection with the apartment he rents from landlord. Thereafter, landlord commenced this holdover proceeding on the ground that tenant had created a nuisance. In October 2012, tenant, in effect, answered and counterclaimed for, among other things, rent overcharge and treble damages, asserting that landlord had willfully failed to remove a 15% charge for air conditioners from his rent after the building had become submetered in May 2009. Tenant subsequently withdrew his DHCR complaint in favor of resolving the overcharge issue in the Civil Court. Landlord discontinued its nuisance holdover proceeding prior to trial, and a nonjury trial was held on tenant's rent-overcharge counterclaim. Following the trial, the Civil Court found that tenant was entitled to be reimbursed for any monies he had paid to landlord, after the building had become submetered, for excess electricity consumption attendant to his use of the air conditioners, and that landlord had overcharged tenant $100 per month for the 54-month period from May 1, 2009 through October 31, 2013. The court further found that landlord's failure to reduce tenant's rent was not willful, and declined to award treble damages. A judgment in the principal sum of $5,400 was entered in tenant's favor on October 2, 2013. Tenant appeals on the ground of inadequacy, and landlord cross-appeals, from the judgment on the counterclaim.

When tenant moved into the building in 1976, it was a master-metered electrical inclusion building. Since five air conditioners had been installed in tenant's rent-stabilized six-room apartment, tenant was charged an additional $100 per month for the "hiring" of the air conditioners and, as was the practice at the time, this charge became part of tenant's legal rent-stabilized rent. In December 2008, DHCR issued an order granting landlord's application for permission to terminate the rent inclusion of electricity charges and to submeter the building's [*2]electricity so that the tenants had to pay for their own electricity. The DHCR order states that "for every unit that becomes individually metered, the owner will not be permitted to collect any previously authorized appliance charges to offset the cost of electricity for operating appliances that consume large quantities of electricity (i.e., air conditioners)." As of May 2009, the building became a submetered electrical exclusion building, after which landlord reduced tenant's rent by $60.20 pursuant to the DHCR schedule of rent reductions based on the number of rooms in the apartment. On appeal, landlord contends that the DHCR order did not require it to further reduce tenant's rent, because the charge for the air conditioners had become part of tenant's legal rent-stabilized rent, and tenant was never separately charged for appliances or electricity. Landlord argues that its position is supported by DHCR Operational Bulletin 84-4 and DHCR Fact Sheet #27, which provide that, for rent-stabilized apartments which contain air conditioners installed prior to October 1, 1985, the permissible charge is dependent upon the lawful practice then in effect. Tenant argues that under the December 2008 DHCR order granting the submetering application, landlord is not permitted to collect previously authorized charges to offset the cost of electricity for operating appliances like air conditioners which consume large quantities of electricity.

As noted in DHCR Operational Bulletin 2003-1 ^[FN1] , issued on November 12, 2003, in view of the "increases in the cost of electricity" and "the consumption of electricity due to a proliferation of electrical home appliances," as well as the "broad social and economic goal of conservation of energy," the State of New York determined that "state and city agencies should fashion their policies and procedures to be supportive of that goal." Therefore, DHCR "has a long-standing policy of permitting, and indeed encouraging, owners of mastered-metered buildings to undergo the substantial expense of converting their buildings to individual metering, thereby transferring responsibility for the cost of their consumption of electricity to the tenants." DHCR Operational Bulletin 2003-1 also states that, after conversion, "the owner will not be permitted to collect any previously authorized appliances charges to offset the cost of operating appliances which consume large quantities of electricity (i.e., air conditioners)." For air conditioners which were installed in rent-stabilized apartments prior to October 1, 1985, DHCR Fact Sheet #27, updated on February 28, 2011, and Section B of Supplement No. 1 to DHCR Operational Bulletin 84-4, dated September 27, 2012, provide that the permissible charge is dependent upon the lawful practice then in effect.

It is uncontroverted that landlord provided tenant with five air conditioners pursuant to the rider to the lease which states that the "only air conditioners permissible are those hired from the Landlord," and that the charge for the air conditioners was "@ $20.00 EACH PER MONTH, INCLUDED IN RENT." At trial, tenant testified that the air conditioners had never been replaced and that landlord had repaired them as necessary, and the parties stipulated to the fact that, throughout the tenancy, landlord has been responsible for the air conditioners and charged tenant no separate or additional fees for the air conditioners outside of the rent. Thus, the record simply does not support tenant's argument that the $20 per air conditioner charge was solely to compensate landlord for excess electricity consumption and not, at least in part, for the hiring and maintenance of the air conditioner. In our view, therefore, a determination which allocates the entire $20 per air conditioner to excess electricity would not be proper.

Upon the record before this court, there is no method provided for this court to determine how much of the $20 per air conditioner charge was for the hire and maintenance of the air conditioners and how much was to compensate landlord for any excess electricity consumption [*3]attendant to tenant's use of the air conditioners. In these circumstances, while the courts have concurrent jurisdiction with DHCR over rent-overcharge claims, we believe the matter should appropriately be determined by DHCR, given its expertise in these areas (see Wilcox v Pinewood Apt. Assoc., Inc., 100 AD3d 873 [2012]; Olsen v Stellar W. 110, LLC, 96 AD3d 440 [2012]). Consequently, the judgment is reversed, and tenant's rent-overcharge counterclaim is dismissed without prejudice to tenant seeking to reopen the withdrawn DHCR proceeding, or to commence a new DHCR proceeding, to determine the amount that he is entitled to be reimbursed for the monies he paid to landlord for excess electricity consumption attendant to his use of the air conditioners after the building became submetered in May 2009 (see e.g. Matter of Hyde Park Gardens v State of NY, Div. of Hous. & Community Renewal, Off. of Rent Admin., 140 AD2d 351, 352 [1988], affd 73 NY2d 998 [1989]).

We note that tenant's contention regarding certain language contained in the Civil Court's written decision, which addresses the withdrawn holdover petition, is not brought up for review on the instant appeal from the judgment on the counterclaim (see CPLR 5501 [a]), inasmuch as that language does not affect the judgment.

Accordingly, the judgment is reversed and the matter is remitted to the Civil Court for the entry of a judgment dismissing tenant's rent-overcharge counterclaim without prejudice to tenant seeking relief at the Division of Housing and Community Renewal.

Aliotta, J.P., Solomon and Elliot, JJ., concur.

Decision Date: May 01, 2015