IN RE: Howard PARTMAN (2020)

Judgment, Supreme Court, New York County (Arlene P. Bluth, J.), entered on or about September 17, 2018, which granted the petition brought pursuant to CPLR article 78 seeking to annul the determination of respondent New York State Division of Housing and Community Renewal (DHCR), dated August 3, 2017, granting BLDG Management Co., Inc.'s application for a major capital improvement rent increase, unanimously reversed, on the law and in the exercise of discretion, without costs, and the matter remanded to DHCR for further proceedings in accordance with this opinion.

In granting respondent BLDG Management Co., Inc.'s (owner) application for a major capital improvement rent increase based on evidence that “C” violations were removed after the conclusion of the proceedings before the Rent Administrator (RA), respondent DHCR improperly deviated from its own established rules without explanation (see Matter of Terrace Ct., LLC v. New York State Div. of Hous. & Community Renewal, 18 N.Y.3d 446, 453, 940 N.Y.S.2d 549, 963 N.E.2d 1250 [2012]). Although DHCR may consider evidence not before the RA where (as is at least arguably the case here) it “could not reasonably have been offered or included in the proceeding prior,” DHCR must remand the matter to allow the RA to consider the new evidence in the first instance (see Rent Stabilization Code [9 NYCRR] § 2529.6; Matter of Gilman v. New York State Div. of Hous. & Community Renewal, 99 N.Y.2d 144, 150, 753 N.Y.S.2d 1, 782 N.E.2d 1137 [2002]). Because DHCR did not order such a remand here, the new evidence was not properly considered. To the extent the DHCR failed to follow its own rules its actions were arbitrary and capricious. Accordingly, we order that the case be remanded to DHCR to evaluate whether good cause exists to remand to the RA for consideration of the new evidence.