H. N. Gorin & Leeder Management Co. v. Rent Control Board

Citations: 18 Mass. App. Ct. 272; 464 N.E.2d 1370; 1984 Mass. App. LEXIS 1500

Court: Massachusetts Appeals Court; June 15, 1984; Massachusetts; State Appellate Court

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The plaintiff, Gorin. Leeder, appeals a summary judgment favoring the defendant, the Rent Control Board of Cambridge. The court affirms the judgment, finding no merit in the plaintiff's claims. On October 23, 1980, the board approved a capital improvement rent increase of three dollars per apartment, effective December 1, 1980, and notified Gorin. Leeder and the tenants accordingly. On November 25, 1980, the board issued a notice of an eleven percent general rent increase due to 1980 real estate tax increases, which was calculated based on regulations in effect as of November 5, 1980. Gorin. Leeder contested the accuracy of the rent figures, asserting the three-dollar increase was not properly accounted for. Following this, the board sent a corrected notice on December 24, 1980, confirming both the three-dollar and eleven percent increases. Gorin. Leeder continued to challenge the calculations, and on April 23, 1981, the board issued a second corrected notice, adjusting the allowable increase to nine percent, effective January 1, 1981, allowing tenants to deduct excess payments.

The plaintiff argues that the board's failure to pay a fifty-dollar entry fee timely forfeited its right to appeal, but the court cites G. L. c. 231, § 97, indicating no such requirement exists for this type of appeal. The plaintiff also contends that the April 23, 1981 notice was invalid because the board lacked authority to unilaterally recalculate rent levels four months after the initial determination. This argument is dismissed, as it lacks foundation in the regulatory text, which does not prohibit such recalculations by the board.

The three-day notice requirement in § 06(2) of Regulation 96 does not prevent the board from independently correcting errors. Due process does not mandate that an agency must adhere to its errors indefinitely, particularly when public interest is at stake. An agency has the authority to amend clerical mistakes to align the record with its actual intent. The board, tasked with overseeing controlled rental properties, is granted flexibility to navigate the complexities of rent control under St. 1976, c. 36, § 7(a). The trial judge observed that Gorin. Leeder's adjustment case was ongoing, despite higher rents being collected since January 1, 1981, due to a pending request for a correction of the 1980 general adjustment.

Gorin. Leeder contends it was erroneous for the board to factor in a three-dollar increase for capital improvements, effective October 23, 1980, to the present maximum lawful rent roll for the 1980 general adjustment calculation. The argument hinges on the increase not being collectible until December 1, 1980, after tenant notification, and the property classification on November 5, 1980. Consequently, the board’s actions led to a decrease in the permissible rent increase from eleven percent to nine percent. The board interprets Regulation 96 as allowing the inclusion of the three-dollar increase on the date it was approved. While court interpretations are not bound by administrative decisions, reasonable agency interpretations of regulatory statutes should generally be upheld unless proven arbitrary or inconsistent with the regulations.

The trial judge concluded that by November 25, 1980, when the board notified Gorin. Leeder and tenants of the adjusted maximum rent, the three-dollar increase was already part of the lawful rent roll. This interpretation aligns with Regulation 96 and is consistent with the mandate of c. 36, § 7(a) to ensure fair net operating income for landlords. Gorin. Leeder did not claim that the board's decision compromised its ability to achieve a fair net operating income and acknowledged that for tenancies established after November 1, 1980, the three-dollar increase could be charged.

Gorin Leeder references Woods v. Callahan and Babson v. Boston Rent Control Administrator to support its arguments, but these cases are deemed unhelpful as they established that lawful maximum rent includes amounts allowed under tax escalation clauses from the effective date of rent control, irrespective of actual payment requirements. The board's actions were upheld, with the judgment affirmed. The board's authority to correct errors is limited; it may do so as long as it does not reverse a conscious decision, grant different relief than originally sought, or alter the outcome of the initial decision, provided that no parties relying on the original decision are prejudiced. The board's decision did not violate these restrictions. Additionally, the board's notice of April 23, 1981, did not mandate an immediate refund of overcharges but permitted them to be applied to future rent payments.