Docket No. AI 420183-RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. AI 420183-RO
DISTRICT RENT
ADMINISTRATOR'S DOCKET
Schleswig House, Inc. NO. LC 000216-AD
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On September 17, 1986, the above-named landlord timely filed a
petition for administrative review of an order issued on July 11,
1986 by a District Rent Administrator concerning the housing
accommodation known as Apartment 2-B, 21 East 62nd Street, New
York, New York.
The Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion of the record relevant to
the issues raised by the petition for review.
This procedure was commenced by the subject tenant filing an
overcharge complaint, dated March 5, 1984. The tenant's complaint
alleged that the landlord is collecting $275.00 per month in rent,
and that the tenant further alleged that the subject apartment's
rent should be $125.12 per month, pursuant to the rent agency's
records.
To the complaint the tenant attached a copy of the subject
apartment's rent registration card.
The tenant first took occupancy on October 1, 1968.
The subject landlord alleged in its answer to the tenant's
complaint, dated May 8, 1984, that the tenant first took occupancy
of the subject apartment in 1968, and has used the subject
apartment from that time until January 31, 1984 for "commercial
purposes"; that the subject tenant had paid rent for the subject
apartment using checks from his business account, and that after
January 31, 1984, the tenant has attempted to remodel the apartment
without permission of the landlord to show that it was used for a
residential pupose.
Docket No. AI 420183-RO
To its answer the landlord attaches a copy of an affidavit by
the petitioner's Vice-President in which he requested a Section 36
proceeding (under the former code), and that the subject apartment
"be declared exempt from rent control because it is being used as
a commercial premises." The affidavit further alleged that the
subject tenant had been using his apartment for commercial
purposes; that the subject tenant had been using his apartment for
a hair salon, and that the subject tenant resided most of the time
outside of the United States.
The subject landlord submitted to the Administrator an
affidavit from an alleged neighbor of the subject tenant, Dr. Earl
DiPirro, sworn to on August 31, 1984, which stated that he has
resided at Apartment 2A in the subject building for more than 3 1/2
years from the above-mentioned date; that during that time he has
observed that the door to the subject tenant's apartment during the
daytime was open; that he has seen the inside of the subject
apartment while walking past the subject apartment; that he saw
manicurists working in the subject apartment; that there was a
"constant influx of customers from the salon and employees of the
salon," and that there were big pictures of hair models on both
sides of the doorway.
The subject landlord also submitted to the Administrator an
affidavit from Genevieve Adler, an alleged former employee of the
subject tenant, which was sworn to on October 15, 1984, which
stated that she was a tenant at the subject building for ten years;
that she was an employee at the subject tenant's hair salon, until
January 1, 1984; that the subject apartment was used by the hair
salon for manicures; that "various principals of the salon used
that apartment for business appointments and a mail order business
involving the importation and sale of various types of hair rollers
was conducted from that apartment"; that the hair salon's
bookkeeper inspected the business' records in the subject
apartment; that the hair salon's record were maintained in file
cabinets which were kept in the subject apartment, and that the
subject tenant did not reside in the subject apartment.
In response to the landlord's answer the subject tenant
submitted to the Administrator an affidavit which was sworn to on
January 31, 1985, which stated that "any alleged business use made
of my apartment were not made with my knowledge or consent, but
were undertaken by other officers," of the hair salon; that Dr.
DiPirro was rarely home; that Genevieve Adler left the hair salon
"under less than friendly terms"; that "Ms. Adler's affidavit is
misleading because she does not state that she personally viewed
any alleged business use of my apartment, that I was present during
any alleged business use of my apartment, that I was present during
such alleged business use, nor that I was aware of such alleged
business use," and that the subject landlord has admitted that
since January, 1984 there has been no commercial use of the subject
Docket No. AI 420183-RO
apartment.
The subject tenant also submitted to the Administrator an
affidavit by Marilyn Surgill, sworn to on January 31, 1985, which
stated that she has resided in the subject building for 3 1/2
years; that she had "seldom seen Dr. DiPirro in the building"; that
to the best of her knowledge the subject tenant had not used the
subject apartment for business purposes; that she had discussed
with the landlord the possibility of exchanging her apartment for
the subject tenant's apartment's; that the landlord had a key to
the subject tenant's apartment; that the landlord had accompanied
her while she inspected the subject tenant's apartment, and that
during her inspection of the subject apartment she did not see any
evidence that it was being used for business purposes.
On December 20, 1985 a physical inspection of the subject
apartment was carried out by the Division of Housing and Community
Renewal (DHCR). The inspector's report noted that the subject
apartment has a living room which has a couch, four lamps, four
chairs, a television set, a desk, a bookcase, and a kitchen which
has a refrigerator with food in it, and a stove. The inspector
also noted that the closets in the subject apartment were full of
clothes.
On March 3, 1986, the rent agency mailed to the parties a
"Notice of Commencement of Proceeding to Determine Facts or Fix
Maximum or Legal Regulated Rent," pursuant to Section 36 of the
former code. The notice proposed to establish the legal regulated
rent at $125.12 per month, effective as of the date of occupancy,
and to adjust the rent to $143.89 per month, effective October 1,
1968, for the execution of a two year lease agreement. The notice
afforded the parties to this proceeding an opportunity to file an
answer to the proposed action set forth in the notice, within
twenty days of the above-mentioned date.
In response to the above-mentioned notice the tenant submitted
a response, dated March 8, 1986, which stated that he agreed with
the proposed findings of the District Rent Administrator.
The landlord's response, dated March 21, 1986, asserted that
the subject apartment was rented to the subject tenant; that the
subject tenant operates a beauty salon in the first floor of the
subject building; that in 1984 the subject tenant filed an
overcharge complaint with the rent agency; that the landlord found
out that the subject apartment "was being used exclusively as an
extension of the beauty salon, and thus for commercial purposes";
that the landlord then commenced a summary proceeding in Civil
Court alleging the commercial use of the subject apartment, but the
court proceeding was stayed pending the rent agency's
determination, and that the subject landlord requested a hearing so
that the landlord's witnesses can testify regarding the use of the
subject apartment.
Docket No. AI 420183-RO
In the order under review herein, the Administrator determined
that the subject apartment was rent controlled; that the maximum
rent, effective as of the date of the subject tenant's occupancy,
was $125.12 per month; that the maximum rent was to be adjusted to
$143.84 per month, pursuant to a two-year lease agreement,
effective October 1, 1968, and that the subject landlord was
directed to refund to the subject tenant "all rent collected in
excess of the maximum rent fixed or established by this order
during the period beginning no earlier than two years prior to
February 7, 1985... with 6% interest from the date of each
excessive payment of rent."
The landlord's petition alleges that the Administrator's order
should be revoked as there was no hearing, and that the landlord
did not receive a copy of the Administrator's order.
To its petition the landlord attaches a copy of an affidavit by
the landlord's attorney which asserts that he and the subject
landlord did not receive a copy of the Administrator's order; that
the petition is timely filed; that the subject tenant was using his
apartment for commercial purposes; that the subject landlord had
requested a hearing in the proceeding in front of the
Administrator; that a hearing was never scheduled; that the
Administrator's order "merely adjusted the rent but made no mention
of the allegations of commmercial use of the premises"; that the
Administrator's order did not state why a hearing was not
scheduled; that the Administrator's order "overlooks the fact that
highly credible witnesses were available to testify in the matter,"
and that the Administrator did not give the subject landlord an
opportunity to substantiate its allegations.
The subject tenant did not submit a response to the landlord's
petition.
After careful consideration, the Commissioner is of the opinion
that the landlord's petition should be granted.
The Commissioner notes that the record is not clear as to
whether the rent agency mailed a copy of the Administrator's order
to the subject landlord. Accordingly, the Commissioner finds that
the landlord's petition shall be deemed to have been filed timely.
Pursuant to Section 2207.5 of the City Rent and Eviction
Regulations, the scheduling of a hearing by an Administrator is
discretionary not mandatory. Accordingly, the Commissioner finds
that the mere fact that the Administrator did not schedule hearings
will not warrant a revocation of the Administrator's order in this
proceeding.
The Commissioner notes that in the proceeding in front of the
Administrator the tenant stated that, "any alleged business use
Docket No. AI 420183-RO
made of my apartment were not made with my knowledge or consent,
but undertaken by other officers of Aurelian Lintermans, Inc."
(The Commissioner notes that Aurelian Lintermans, Inc., is the name
of the company, owned by the subject tenant, which operates the
beauty parlor in the subject building.)
Although the subject tenant denied that he had any "knowledge
or consent" of a commercial use of the subject apartment, the
Commissioner finds that the subject tenant did not deny the subject
landlord's assertion that the subject apartment was used for a
commercial purpose.
As to the affidavit submitted by Dr. Dipirro, the Commissioner
finds that the subject tenant did not dispute the specific
allegations contained in Dr. Dipirro's affidavit pertaining to the
commercial use of the subject apartment.
The Commissioner notes that in response to Genevieve Adler's
affidavit the subject tenant asserts that Genevieve Adler is not a
credible witness, and that "she does not state that she personally
viewed any alleged business use" of the subject apartment. The
Commissioner finds that the subject tenant does not deny the
specific allegations contained in Genevieve Adler's affidavit
pertaining to the commercial use of the subject apartment.
Accordingly, the Commissioner finds that based on a
preponderance of the evidence contained in the record the subject
apartment was used for a commercial purpose.
As the subject apartment was used for a commercial purpose, the
Commissioner finds that the subject apartment is exempt from rent
control for the duration of the subject tenant's occupancy.
The Commissioner further finds that this order does not
prejudice the rights of subsequent tenants of the subject
apartment.
THEREFORE, in accordance with the City Rent and Rehabilitation
Law, and the Rent and Eviction Regulations, it is
ORDERED, that the landlord's petition be, and the same hereby
is, granted, and that the order issued by the Rent Administrator on
July 11, 1986, under Docket No. LC 000216-AD, be, and the same
hereby is, revoked.
ISSUED:
Joseph A. D'Agosta
Acting Deputy Commissioner
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