Fair Rent Commission

MINUTES FAIR RENT COMMISSION REGULAR MEETING (HYBRID) OF MAY 8, 2024 Present: Commissioner/Chair Rakim Grant; Commissioner/Vice Chair Caitlin Duffy; Commissioner Kirk Hart (remote); Commissioner Robert Rosenthal; Commissioner Sal Calvo; Commissioner Alagar Venkataswamy. Staff: Atty. Philip G. Kent, as outside counsel for the Commission with Atty. Charlene Lynton and Atty. Christopher Buza Public: Atty. Darrell Fennell; Atty. Ian Gottlieb; Vincent Maruffi; Daysha James (Kosel witness); Enid Muhammad (remote); Darnell Ford (remote) 1. Call to Order: Commissioner / Chair Grant called the Meeting to order at 7:02 p.m. 2. Public Comment: Commissioner / Chair Grant called for public comment. Attorney Darrell Fennell presented a comparison of the recently revised bylaws with the Middletown FRC Ordinance regarding the issue of dismissal if the respondent is no longer the owner or landlord, as stated in the revised bylaws, versus section 14-76(H) of the FRC Ordinance, which indicates that transfer of ownership is not cause to dismiss a pending proceeding or to affect the rights, duties and obligations of the Commission or the parties. Fennell further suggested that the Commission should keep jurisdiction of at least retaliation complaints even if the tenant has moved. Fennell also suggested bylaws should change in section 6.3 (i) because it says decisions are posted within 60 days whereas the FRC Ordinance calls for 30 days unless impracticable. Atty. Kent will review these points and make recommendations to the Commission at the next meeting. 3. Approval of Minutes Vice Chair / Commissioner Duffy made a MOTION to approve the minutes of the April 10, 2024 Regular Meeting. Commissioner Calvo seconded the motion and the motion passed unanimously without further discussion. 4. Correspondence Atty. Kent reported the following correspondence: a. 5/7/24 email from David Smolowitz, in which he formally resigned as an alternate with the Commission; b. 4/26/24 email from Deputy General Counsel Kori Wisnewski confirming that hybrid meetings are not required to be recorded but because the Commission has hearings it is recommended that the hearings be recorded. c. 4/17/24 email w/ Kristin Holden confirming that updated bylaws were posted  d. new complaint to be discussed later 5. New Business A. Discussion re additional revisions of Bylaws 1. Statute of Limitations issue Atty. Kent reiterated that the new bylaws have been posted to the City website. B. Discussion re various issues 1. Informing community re FRC – Mayor’s press release Atty. Kent reported no new information on the press release. Chair / Commissioner Grant stated he would follow up. The Commissioners discussed follow up with the Mayor’s office and Commissioner Calvo agreed to have someone reach out. Atty. Kent reminded the Commissioners that the press release is drafted and should be issued soon by the Mayor’s office. A member of the public inquired about whether the Mayor has attended any meetings and Vice Chair / Commissioner Duffy suggested we invite the Mayor to a meeting. 2. Letter to Mayor re FRC suggestions The Chair tabled the issue for a future meeting. 3. Other/General i. Review Draft Hearing Procedure Notice Chair Grant called for discussion of hearing procedures. Atty. Kent briefly went over the Draft Notice of Complaint Hearing Procedures. The Commissioners reviewed and approved the use of the notice with complaint notices. C. Discussion of pending complaints, mediation, answer dates and scheduling Hearings 1.Vicenzo complaint status Atty. Kent reported that this matter is still pending and no mediation has occurred. Atty. Kent will follow up again. 2.Moffett complaint status Atty. Kent reported that the Moffett complaint was resolved privately between the parties via a new short-term lease. 3.Muhammad complaint status Commissioner Venkataswamy inquired about the new Muhammad complaint and whether the website instructs complainants on how to contact staff regarding complaints. Atty. Kent reviewed the website with the Commissioners and explained that to some extent the website does but the Commissioners may wish to add more. Vice Chair / Commissioner Duffy will develop a 2 timeline or bullet point document to explain the complaint process to the public further. Atty. Kent reported that the new complaint is about a bed bug infestation and notice will issue. The Commissioners agreed this complaint should be referred to the health department for follow up. 6. Old Business A. Hearing / deliberations / decision re Maruffi complaint Chair / Commissioner Grant called the case. Atty. Fennell argued that we do not have a quorum and after review the Commissioners agreed that there was no quorum under the bylaws. The Commissioners and counsel discussed whether, in light of the lack of recording of the March 2024 meeting, the parties would agree to simply restart the hearing. Atty. Fennell referenced Florida and California law encouraging parties to either agree on what took place before or make competing submissions and referenced federal rules. Atty. Gottlieb requested time to review these issues and requested a recess to discuss with his client, which the Chair granted for 10 minutes. Atty. Gottlieb supported coming to a potential agreement but still requires research and further client discussion. As a result of the lack of quorum and other issues, and following further discussion of the issues and potential avenues to resolve the issues, the matter was tabled with apologies to Mr. Maruffi for the delay. Counsel agreed to contact each other in the meanwhile to see if an agreement could be reached before the next hearing. B. Hearing / deliberations / decision re Venkataswamy complaint The following is a summary only. Please review the recording for more details. Chair / Commissioner Grant called the case. Counsel presented opening arguments. Atty. Fennell called Alagar Venkataswamy as a witness. Mr. Venkataswamy was sworn in and testified concerning the history of lease renewals and negotiations with the landlord/property manager. Mr. Venkataswamy testified that he signed his 2023-2024 lease without further negotiations due to the bad experience he had with prior negotiations. He then testified concerning consumer price index rent increases he researched and rent increases that occurred after Kosel Equity took ownership. He testified concerning how Kosel Equity treated other tenants in the renewal process and getting the Middletown legislative delegation involved. He testified concerning potholes on the premises, inconsistencies in how rent increases took place, electric rates and account history. Atty. Gottlieb then cross examined the witness about, among other things, complaints concerning conditions, his tenant profile, utilities included in rent, questions concerning the witness’ research as to CPI and landlord costs. Atty. Gottlieb called Daysha James, who was sworn in and testified chiefly concerning landlord expenses and renovations. Atty. Fennell cross examined the witness largely concerning the said expenses and renovations as well as rent practices. Counsel presented closing arguments. Commissioner Rosenthal inquired as to why the landlord did not present more detailed expense information. Commissioner Grant inquired as to the difference in rents for renovated and unrenovated units and Ms. James noted that rents are simply market rate without regard to specific unit conditions so that tenants must initiate negotiations. Commissioner Duffy inquired as to why the good cause eviction statute, CGS 47a-23c, applies where no eviction is at issue. Commissioner Grant inquired as to the fairness of the last agreed rent. Commissioner Rosenthal noted that simply signing the last lease is irrelevant because the FRC deals with rent increases or the fairness of existing rent under the circumstances. 3  In deliberations, the Commissioners considered the 13 factors and other relevant information presented in accordance with section 14-75 of the FRC Ordinance. Among other things, the Commissioners considered whether the rent was unfair as not being based on the condition of the complainant’s specific unit and the wholesale market increase approach used by the landlord; whether the rent increase reflected improvements going to directly impact tenants; CPI information; whether factors 12 and 13 are implicated by the rent increases and in relation to evidence of reinvestment and whether that reinvestment took into account the subject unit; how the landlord did not differentiate between renovated and unrenovated units in setting rents such that unrenovated units were footing the bill for renovated units but not getting the benefit; whether the timeline at issue, the rent increases, the expenses, the increase in costs and taxes, and the purchase price; reinvestment; returns for investors; and intangible aspects affected both parties. The Commissioners discussed reducing the rent increase from $150 to $75 based on factors including the frequency of rent increases and whether income from an increase has been or will be reinvested in improvements and whether landlord already has recouped its expenses. After further deliberations and rough consensus, Chair / Commissioner Grant made a MOTION to find that the rent increase was unfair and excessive based on factors 12 and 13 under FRC Ordinance 14-75 A., such that rent is decreased from the $150.00 increase to a $75.00 increase per month, and such that the landlord must remit to Mr. Venkataswamy the sum of $450.00 within 30 days of the decision. Vice Chair / Commissioner Duffy seconded the Motion, which passed without further discussion in a 4-to-1 vote in favor (Cmmrs. Grant, Duffy, Hart, and Rosenthal voted in favor/aye, and Commissioner Calvo voted against/nay. The Motion carried and Atty. Kent was directed to issue a written decision. C. Hearing / deliberations / decision re Fennell complaint This matter was not taken up given that the Maruffi case remains in progress. 7. Executive Session, if needed Not applicable. 8. Adjournment: Chair / Commissioner Grant made a MOTION to adjourn, and Commissioner Calvo seconded the motion, which passed unanimously without further discussion. The meeting adjourned at 10:37 p.m. 4