Middletown commission finds landlord violated remittance order, votes to fine and direct payment to tenant

The Middletown Fair Rent Commission voted after hearing testimony and documents to find that Up Realty violated a prior commission remittance order relating to tenant Venkateswamy and to impose a fine under Middletown ordinance 14-8.

Attorney Bill Fennell, representing the tenant (speaker 3), argued that a $450 remittance required by the commission was effectively taken from the tenant's security deposit or otherwise mishandled and that the landlord's accounting and communications were evasive. "They stubbornly refused to explain why the accounts showed a $450 shortfall and ultimately the money was taken in a manner that violated the order," Fennell told commissioners, highlighting ledger entries and follow-up letters he said went unanswered.

Attorney Ian Gottlieb, representing the landlord (speaker 6), objected that the commission lacked jurisdiction over security-deposit accounting and said his client had complied with the commission's remittance requirement by issuing a check within the commission's timeframe. Gottlieb urged dismissal of any claim tied to security-deposit handling as a matter for superior court and the Department of Banking. "As soon as that check hit Mr. Venkateswamy's hands, my client was in compliance with this commission's order," Gottlieb said.

Commissioners disagreed about jurisdiction and fact questions but ultimately voted 3-2 to deny a motion to dismiss and to hear evidence on whether the conduct violated ordinance 14-8 (which prohibits demanding, accepting or receiving amounts inconsistent with a rent reduction or suspension order). After reviewing check dates and ledger excerpts, the commission found a violation occurring between mid-August 2024 and mid-September 2024 and voted to impose a fine within the ordinance's range; the motion records a commission calculation resulting in a fine of $7,100 based on the commission's interpretation of the continuing-offense language.

The commission also voted that the remaining remittance should be paid to the tenant Venkateswamy. Commissioners did not finalize where the assessed fine proceeds should be deposited and tabled that specific administrative detail until the next meeting while staff confirms standard practice and statutory requirements.

The commission instructed counsel to provide any further records requested and set roughly 15-minute time limits for arguments during the hearing process.