Court Opinion

ID: 7841256
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:01:09.457803+00
Date Added: 2024-06-11T16:04:31.753964
License: Public Domain

Glass, J.,
dissenting. Because I believe that the majority opinion establishes an unwarranted precedent by sanctioning a procedure that allows a developer of a moderate rental housing project to increase rents by not complying with the spirit if not the letter of § 8-79a-15 of the Regulations of Connecticut State Agencies, I dissent.
*517I accept the analysis of the regulation as set forth in the majority opinion. Under § 8-79a-15, the tenants have a right to a thirty day written notice that a change in the rent schedule will be considered by the developer at its next meeting. The tenants, during the thirty day period, have a right to submit written comments to the developer and review any documents supporting the proposed rent increase, which will be on file at the office of the developer or management agent. The tenants may attend the noticed meeting and make comments about the proposed rent increase. Furthermore, within fifteen days of the written noticed meeting, the developer must submit to the department of housing (DOH) its recommended management plan plus all of the comments of the tenants. Within thirty days after receipt of the developer’s recommendation, the DOH must approve, disapprove or request modification of the rent increase or any portion of it. If the rent increase is approved by DOH, the developer must give the tenants at least thirty days written notice prior to the effective date of the rent increase. Thus, it must be stressed from the outset that this case has nothing to do with the merits of the determination of whether a developer’s request for a rent increase should be granted. Rather, this case only concerns a developer’s compliance with § 8-79a-15 as it pertains to a tenant’s right to notice and a hearing regarding rent increases.
The majority opinion recognizes that “[t]he defendants concede that they never complied with this regulation but point out that its applicability is limited to ‘any proposed rent increases.’ (Emphasis added.)” The quoted phrase, the defendants contend, and the majority agrees, does not include implementation of a change in a rent schedule previously approved by DOH. Apparently, however, DOH had some misgivings about the developers’ noncompliance with the regulation because on March 24,1987, Michael T. Duffy, sen*518ior director, management division of DOH, wrote a letter1 to Wendell C. Harp, general partner of Renais*519sanee Beechwood Gardens. Among other matters discussed in his letter, Duffy stated: “In order to complete *520our files, we are enclosing a project management plan for 82 units at a rental charge of $465. Until this time, this document had not been fully executed. This requires your local execution and should be returned to this Department for approval. This approval will be retroactive to April 1986. However, this rent of $465 cannot be charged to any current tenants until they receive thirty (30) days notice (no sooner than May 1, 1987) of this rental change.” In sum, the DOH belatedly suggested that the developers could be rescued from noncompliance by the execution of a project management plan for eighty-two housing units at a rental charge of $465, as the DOH indicated that its approval would “be retroactive” to April, 1986. According to another letter, dated March 31,1987, from Duffy to Harp, a “fully executed Management Plan [became] effective April 9, 1986.”
Thus, this “retroactive” approval of the developers’ management plan enabled the developers to circumvent § 8-79a-15 of the regulations. Clearly, § 8-79a-15 of the regulations does no more than give the tenants of a moderate rental housing project an opportunity to have their views considered in the determination by *521DOH as to whether it should approve or disapprove a proposed rental increase by a moderate rental housing project developer. Giving the tenants a right to be heard does not compel disapproval of the developer’s proposal. Presumably, DOH will determine the matter on its merits. Nonetheless, the majority concludes “that the trial court erred in interpreting § 8-79a-15 of the regulations to apply to the implementation of a rental charge that had been approved by DOH when the project was first authorized but was not to take effect until completion of the project.”
This determination by the majority allows a moderate rental housing project developer to bank and stack rent increases in the developer’s application and thus completely bypass the tenants’ right under § 8-79a-15 to have their views considered in conjunction with the proposed rent increase. To the poor tenant, I am unpersuaded that there is difference between “any proposed rent increase” and a “previously approved rental increase.” The tenant pays more money regardless of the characterization of the “rent.” It is significant to note that a letter2 dated June 24,1987, sent by Bruce *522Lebow, senior property manager of Beechwood Gardens, to give notice to the tenants about their future rent, characterized the action as follows: “Notice of rent increase effective August 1,1987 and requirement for execution of apartment lease.” Thus, if the tenants were being notified of a previously approved rent, it is mysterious as to why it would be characterized as a “notice of rent increase.”
In addition, by endorsing the procedure used by the developers to circumvent the spirit if not the letter of § 8-79a-15, the majority speculates on the inducements for investors to place capital into moderate rental housing projects. The majority states: “DOH may well have decided that it was necessary to approve rental charges to become effective after completion of the planned rehabilitation so that investors would have some assurance of the ultimate income that the project would generate. New would be inclined to invest in a project without being able to calculate with reasonable confidence the return likely to be realized. Nothing in § 8-74 can reasonably be construed to preclude DOH from establishing a lower rent for the development stage of a project, when tenants may be greatly inconvenienced by construction operations and not all of the costs must be paid from rental income, and a higher rent upon completion of the work, when these conditions have changed.” In my view, however, § 8-79a-15 is a consumer-oriented regulation. It gives a tenant a minimum input in a moderate rental housing project rent *523increase decision. I am unable to discern any need to speculate about the inducements for investment in moderate rental public housing. Moreover, I do not understand, and the majority leaves it unexplained, as to how allowing tenants some input in a rent increase decision in a government controlled moderate rental housing project will, somehow, discourage investors. Certainly there is no demonstrated need to shield the investor-developer from the tenant-consumer. Furthermore, although I am unable to draw a definitive inference from DOH’s failure to join in this appeal, in my view, it is indicative of DOH’s acceptance of the trial court’s construction and application of § 8-79a-15.
In sum, I do not believe that the construction of § 8-79a-15 given by the majority is warranted. The majority’s construction of this regulation sanctions a moderate rental housing project developer’s action of banking and stacking rent increases in the project application, thereby emasculating the tenants’ right to a hearing and to notice under § 8-79a-15. I therefore dissent.

 “Mr. Wendell C. Harp
General Partner
Renaissance Beechwood Gardens Management, Inc.
74 Dwight Street
New Haven, CT 06511
Dear Mr. Harp:
Re: Meeting at Department of Housing on February 18, 1987 and subsequent meeting at Beechwood Gardens on March 10, 1987.
This letter contains important issues that must be addressed by the Management of Beechwood Gardens in order to assure conformity to State regulations and procedures. The Department appreciates meeting with you to address these issues. We feel that these meetings were very helpful and much was accomplished. However, we expressed our strong concern with regard to the management operations of this complex. The following is a reiteration of the discussions that took place during our meetings and our directives on the actions we want you to pursue.
Financial Statements
No management financial statements had been completed as of February 18, 1987. However, subsequent to that date a staff member from our accounting section has met with your accountant and financial statements through December 31,1986 were received February 24, 1987. We expect that the financial statements for March 31,1987 will be submitted in a timely fashion. As we pointed out, these statements are critical to Department of Housing for review of the operation and financial status of your complex.
Rents/Management Plan
It was determined during our post-occupancy review that the rental being charged to all new tenants and for those tenants occupying the 18 rehabilitated units was $465. You indicated during the meetings that it was your understanding that the $465 rental charge was approved during the development stage for all of the units. It was acknowledged that this rent charge was an issue to be determined after reviewing our files.
It has been determined through a review of our files that you had submitted a management plan for development and 2 project management plans for operations. One of the project management plans was for 64 units at $425 which would be used during the construction phase of the complex. The other project management plan for operations, which you submitted, was for 82 units at $465 which would be used at time of completion of the complex. Since it was your understanding that both these project management plans were approved, you implemented the rental charge of $465 as of April 1986. It was also determined during our March 10,1987 meeting *519that currently those tenants that have been residents of the complex all along are not being charged the $465 rent. In order to complete our files, we are enclosing a project management plan for 82 units, at a rental charge of $465. Until this time, this document had not been fully executed. This requires your local execution and should be returned to this Department for approval. This approval will be retroactive to April 1986. However, this rent of $465 cannot be charged to any current tenants until they receive thirty (30) days notice (no sooner than May 1,1987) of this rental change.
In order to submit a new management plan, due process must be performed by the management of the complex. That is, if you would like to propose a rental increase above the $465, you would have to execute the following procedures:
(1) A 30 day written notice mailed to all tenants that a change in the rent schedule will be considered by the developer at its next meeting, (including the date and time of the meeting) and may result in a rent increase.
(2) Advise tenants that they can submit written comments to the developer within the 30 day period, and that they may review any documents supporting the proposed rent increase which will be on file at the office of the developer or management agent. Also, tenants may attend meeting and make comments at that time.
(3) At the end of the 30 day period, the developer shall submit within 15 days to the Department its recommended management plan plus all tenant comments.
(4) Within 15 days after receipt of the developer’s recommendation, the Department will approve, disapprove or request modification of the rent increase or any portion thereof.
(5) If the rent increase is approved by the Department, the developer must then give the tenants at least 30 days written notice prior to the effective date of the rent increase.
Therefore, the management plan which you recently submitted could not be considered at this time. Once you have revised this management plan based upon the information in this letter and once you have followed the above procedure, please submit a new management plan for review and approval.”
You also requested whether you could have the fee waived until the final audit. Our regulations are clear that the management fee will begin at the time a Certificate of Occupancy is issued.
Post-Occupancy Review (dated February 5, 1987)
During our meeting of 3-10-87 you indicated that a response was sent to DOH dated January 11, 1987. However, in reviewing this letter, it is our feeling that this letter is in response to one sent to you on 12-12-86 from Michael Duffy with regard to a proposed management plan and rental increase. *520Although the post-occupancy review may have covered similar concerns, we ask that you respond directly to our post-occupancy review at your earliest convenience.
We hope that the above will resolve any past or current concerns with regard to the management of Beechwood Gardens. We also hope that the management of Beechwood Gardens will be strengthened to prevent similar gaps in implementing state rules and regulations in the future. With continuous communications between Beechwood Gardens and this Department, a good working relationship may be established. If we can be of any further assistance, please contact this office at 566-3329.
Very truly yours,
[s] Michael T. Duffy
Senior Director
Management Division”

 “June 24, 1987
Mr. Kevin Mullane
600 Whalley Avenue New Haven, CT 06511
Re: Notice of rent increase effective August 1, 1987 and requirement for execution of apartment lease
Dear Mr. Mullane:
Effective as of August 1,1987 the required* lease rent for your apartment will be $465 (four hundred sixty five dollars) per month. If you are renting a garage the cost will be $20 per month for the garage rental. The subject increase is being executed in conformity with applicable department of housing regulations. Additionally, you are required to execute a one year lease effective as of the August 1,1987 date. In accordance with the provisions of the lease you must provide evidence of income from your employer. Accordingly we request that you obtain a statement on your employer’s letterhead stating your current annual income.
*522It has been a pleasure having you as a Beechwood tenant and I look forward to your continued tenancy. I will contact you in the near future concerning a date for execution of your lease.
Sincerely,
Isl Bruce Lebow
Senior Property Manager”