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. AJ410103RO
: DISTRICT RENT OFFICE
DOCKET NO: L3116128R
Pan Am Equities, Inc., CDR 21572
TENANT: Patricia Rivera
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW AND
MODIFYING ADMINISTRATOR'S ORDER
On October 2, 1986 the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on August 28, 1986 by the
Rent Administrator, 10 Columbus Circle, New York, New York concerning
the housing accommodations known as apartment 2E at 43 West 16th Street,
New York, New York wherein the Rent Administrator determined that the
owner had overcharged the tenant. The order incorrectly listed the
apartment number as being 2F rather than 2E.
The Commissioner notes that this proceeding was filed prior to April 1,
1984. Sections 2526.1(a) (4) and 2521.1(d) of the Rent Stabilization
Code (effective May 1, 1987) governing rent overcharge and fair market
rent proceedings provide that determination of these matters be based
upon the law or code provision in effect on March 31, 1984. Therefore,
unless otherwise indicated, reference to Sections of the Rent
Stabilization Code (Code) contained herein are to the Code in effect on
April 30, 1987.
The issue in this appeal is whether the Rent Administrator's order was
warranted.
The Commissioner has reviewed all of 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 originally commenced by the filing in March, 1984 of
rent overcharge complaint by the tenant, in which she stated that she
had commenced occupancy on January 6, 1983 at rent of $814.50 per month.
In answer, the owner stated that a rent review had been approved by the
Attorney General's office, and that there had been no overcharges. The
owner submitted a rental history chart, presumably the one furnished the
Attorney General.
In an order issued on August 28, 1986 the Administrator, using the lease
terms and rents from the owner's chart, calculating a default rent for
the base date tenant in 1977 as being the lowest registered 1984 rent
for the same size apartment, increasing that default rent by Guidelines
and vacancy adjustments to obtain a lawful rent for the complainant, and
imposing interest, determined an overcharge of $3,318.34 through January
31, 1986. The order determined lawful rents of $734.02 and $785.40 in
the tenant's two leases.
In its petition, the owner asserted in substance that the DHCR had no
jurisdiction because of the Assurance of Discontinuance, and that the
rental history showed that there had been no overcharge.
The owner subsequently, based upon the discovery of questionable
practices by two former employees, withdraw that defense. It submitted
evidence that the base date was October 9, 1977 because of the receipt
of J-51 benefits. It submitted rental records for each tenancy,
resulting in a rental history different from the one submitted earlier,
with the rent charged the prior tenant being $664.50, rather than
$783.50 as previously claimed and as used by the Administrator. [The
owner's multi-million dollar lawsuit against its two former corporate
Vice Presidents in charge of leasing accused them among other things of
forging rent histories.] It calculated an overcharge of $2,999.73,
including interest, with lawful rents of $676.83 and $724.21. (The
owner's chart inadvertently lists $821.98 in the tenant's second lease
as well as in the next tenant's lease, but the listed overcharge of
$147.31 [$871.52 minus $724.21] per month clearly indicates that the
owner added 7% to $676.83 and got $724.21. Also, the next tenant's rent
was based on $724.21.)
The Commissioner is of the opinion that this petition should be denied,
and that the Administrator's order should be modified.
Using the rental history supplied by the owner would result in an
overcharge, including interest through the date of the Administrator's
order, of $2,900.99, rather than $2,999.73 as calculated by the owner,
or $3,318.34 as calculated by the Administrator. [The owner's interest
calculation consisted of multiplying the calculated overcharge by 9%.
If the owner had calculated 9% interest to August 31, 1986 on the
monthly overcharges occurring in April, May, June, July and August of
1984, it would have arrived at the lower figure of $2900.99.] While, if
the owner's rent history was to be accepted, the overcharge due the
tenant would be three or four hundred dollars less than that calculated
by the Administrator, the lawful rent would be $724.21 per month in the
lease commencing February 1, 1984, rather than $785.40 as calculated by
the Administrator. (The owner's use of a monthly overcharge
approximately $60 more than calculated by the Administrator would have
resulted in an overcharge calculation higher than the Administrator's
were it not that the Administrator calculated overcharges through
January 31, 1986, whereas the owner stopped its overcharge calculations
on August 31, 1984, when the tenant vacated.) With Guidelines and
vacancy increases this would result in a current lawful rent
approximately $80-$90 a month less than that based on the
Administrator's figures, quickly wiping out the small benefit in the
amount of overcharge in the present case. For the foregoing reasons,
the Commissioner declines to accept the owner's rent history in the
determination of the overcharge herein.
The Commissioner's order is modified only to the extent of removing
excess security of $86.12 to reflect the fact that the tenant vacated in
1984, and to correct the apartment number to 2E.
The owner is directed to reflect the findings and determinations made in
the Administrator's order on all future registration statements,
including those for the current year if not already filed, citing the
Administrator's Order as the basis for the change. Registration
statements already on file, however, should not be amended to reflect
the findings and determinations made in the Administrator's order. The
owner is further directed to adjust subsequent rents to an amount no
greater than that determined by the Administrator's order plus any
lawful increases.
The Commissioner has determined in this Order and Opinion that the owner
collected overcharges of $3,232.22. This order may, upon expiration of
the period for seeking review of this Order and Opinion pursuant to
Article Seventy-eight of the Civil Practice Law and Rules, be filed and
enforced as a judgment. Where the tenant files this order as a
judgment, the County Clerk may add to the overcharge interest at the
rate payable on a judgment pursuant to Section 5004 of the Civil
Practice Law and Rules from the issuance date of the Rent
Administrator's Order to the issuance date of the Commissioner's Order.
THEREFORE, in accordance with the provisions of the Rent Stabilization
Law and Code, it is
ORDERED, that this petition for administrative review be, and the same
hereby is, denied and that the order of the Rent Administrator be, and
the same hereby is, modified in accordance with this order and opinion.
The total overcharge is $3,232.22 as of August 31, 1984.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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