DOC. NO.: AJ 110099-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
------------------------------------X
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF : DOCKET NO.: AJ 110099-RO
: DISTRICT RENT ADMINISTRATOR'S
THOMAS E. HENRY : DOCKET NOS. Q-3120470-R
and CDR 22,643
KENNETH G. FRIEDMAN, PETITIONERS :
------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On various dates, the above-named petitioner-current-owner (Thomas E.
Henry) and former and current managing agent (Alfred S. Friedman
Management Corp.) filed petitions for Administrative Review against an
order issued on September 17, 1986 by a District Rent Administrator, 10
Columbus Circle, New York, New York, concerning housing accommodations
known as Apartment B6, 108-02 72nd Avenue, Forest Hills, New York, wherein
the District Rent Administrator determined that the current and prior
owners had overcharged the tenant.
The issue in this appeal is whether the District Rent Administrator's
order was warranted.
The applicable sections of the law are Sections 2520.6(i) and 2526.1 of
the Rent Stabilization Code.
The Commissioner has reviewed all the evidence in the record and has
carefully considered that portion of the record relevant to the issue
raised by the administrative appeal.
This proceeding was commenced on April 6, 1982 by the tenant's (Robert
Krupp) filing of a rent overcharge complaint.
In its answer to the tenant's complaint, the current owner submitted a
complete rental history for the subject apartment.
In Order Number CDR 22,643 issued September 17, 1986, the District Rent
Administrator determined that the tenant had been overcharged since July
1, 1979, and accordingly directed the owners to refund to the tenant
$2950.38 which included excess security and interest on that portion of
the overcharge occurring on or after April 1, 1984.
The current and former managing agent in its petition contends in
substance that it was not the prior owner of the subject premises and at
no time did it hold title to the building.
DOC. NO.: AJ 110099-RO
The current owner in its petition contends in substance that it purchased
the subject premises on March 10, 1981 by way of a foreclosure sale, that
therefore it cannot be held liable for rent overcharges which occurred
prior to its ownership, that as a matter of law there can be no collusion
between a former and subsequent owner when the new owner takes title by
way of an executor's deed in a foreclosure sale, that it only collected a
security deposit of $175.80 and that therefore it is entitled to $375.01
in additional security.
The tenant did not submit an answer to these petitions.
The Commissioner is of the opinion that these petitions should be denied.
A review of the record in the instant case indicates that Alfred S.
Friedman Management Corporation was listed as the landlord for the subject
apartment on the Landlord's Report of Statutory Decontrol dated October
17, 1977, was listed as the owner on the DC-2 Notice dated October 17,
1977, and was listed as the agent and signed the prior tenant's vacancy
lease. Furthermore, the current owner, in its answer to the tenant's
complaint, listed Alfred S. Friedman Management Corp. as its managing
agent.
Section 2520.6(i) of the Rent Stabilization Code defines an "owner" as
a fee owner, lessor, sublessor, assignee, net lessee,
or a proprietary lessee of a housing accommodation in
a structure or premises owned by a cooperative
corporation or association, or an owner of a
condominium unit or the sponsor of such cooperative
corporation or association or condominium development,
or any other person or entity receiving or entitled to
receive rent for the use or occupation of any housing
accommodation, or an agent of any of the foregoing ...
Based on the definition above, the Commissioner finds that the
Administrator properly considered Alfred S. Friedman Management Corp. as
an "owner".
Section 2526.1(f) of the Rent Stabilization Code provides in pertinent
part that for overcharges collected prior to April 1, 1984, an owner will
be held responsible only for his or her portion of the overcharges in the
absence of collusion or any relationship between such owner and any prior
owners.
The evidence of record discloses that the current owner obtained title to
the subject premises on March 10, 1981 pursuant to a foreclosure sale.
However, a relationship existed between the current and prior owners due
to the fact that the same managing agent, Alfred S. Friedman Management
DOC. NO.: AJ 110099-RO
Corp., was employed by both owners. Furthermore, the current owner
possessed a complete rental history for the subject apartment, yet
continued to overcharge the tenant. Accordingly, the Commissioner finds
that the current owner and managing agent are jointly and severally liable
to the tenant for all overcharges ($2950.38) collected from July 1, 1979
through August 31, 1986. This amount includes excess security and
interest on that portion of the overcharge occurring on or after April 1,
1984. This finding is without prejudice to any action that the current
owner may have against the prior owner or managing agent for overcharges
reimbursed by the current owner which the prior owner or managing agent
had collected.
Because this determination concerns lawful rents only through the date of
August 31, 1986 used in the Administrator's order being appealed, the
owner is cautioned to adjust subsequent rents to any amount no greater
than that determined by the Administrator's order plus any lawful
increases, and to register any adjusted rents with the Administrator's
order being given as the explanation for the adjustment.
This order may upon the expiration of the period in which the owner may
institute a proceeding pursuant to Article 78 of the Civil Practice Law
and Rules, be filed and enforced as a judgment or not in excess of twenty
percent per month thereof may be offset against any rent thereafter due
the owner.
THEREFORE, in accordance with the Rent Stabilization Law and Code , it is
ORDERED, that these petitions be, and the same hereby are, denied, and
that the District Rent Administrator's order be, and the same hereby is,
modified in accordance with this Order and Opinion.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
ADMINISTRATIVE REVIEW
COVERING MEMORANDUM
ARB Docket No.: AJ 110099-RO
DRO Docket No/Order Nos.: Q-3120470-R/CDR 22,643
Tenant (s): Robert Krupp
Owner: Thomas E. Henry/Alfred S. Friedman
Management Corp.,
Code Section: RSC 2520.6(i) & 2526.1
Premises:108-02 72nd Avenue, Apt. B-6
Forest Hills, New York
Order and Opinion Denying Petition for Administrative Review
Record reveals that the current owner purchased the premises at a
foreclosure sale on March 10, 1981 and that the current managing
agent was also the managing agent of the prior owner.
Accordingly, the current managing agent and current owner are
jointly and severally liable for the entire overcharge.
APPROVED:
Processing Attorney:
Bureau Chief:
Deputy Counsel:
Deputy Commissioner:
Mailed copies of Order and Determination to:
Tenant(s)
Owner
Tenant's Atty
Owner's Atty
Date: : by
signature
|
