ADM. REVIEW DOCKET NO. AK 810661 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 SJR 4441
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: AK 810661 RO
: RENT ADMINISTRATOR'S
RONDAX DEVELOPMENT CORP. DOCKET NOS. WWP-86-S-13/R
: WWP-86-S-14/R
WWP-86-S-17/R
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On November 3, 1986 the above named petitioner filed a
Petition for Administrative Review against orders issued on
October 7, 1986 by the Rent Administrator of the Westchester Rent
Office concerning the housing accommodations known as 110 Park
Avenue, White Plains, New York, various accommodations wherein the
Administrator determined that the subject building contains more
than six dwellings and is subject to the Emergency Tenant
Protection Act.
On August 9, 1989, the Commissioner issued an order and
opinion denying the owner's petition and affirming the
Administrator's determination that the building is subject to the
Emergency Tenant Protection Act.
Subsequent thereto, the owner sought judicial review of the
Commissioner's order pursuant o Article 78 of the Civil Practice
Law and Rules (CPLR). On December 5, 1990, the case was remanded
by the Supreme Court, Westchester County, for reconsideration of
the jurisdictional issue and of the determination of the legal
regulated rent.
The Commissioner has again reviewed all of the evidence in
the record and has carefully reconsidered that portion of the
record relevant to the issues raised by the administrative appeal.
The record reveals that this proceeding was commenced in 1986
when three tenants on the third floor of the subject building
filed overcharge complaints in which they questioned the rent they
are being charged and whether the rooms they occupy are subject to
regulation. Two of the complainants stated that they pay $325
every four weeks and the third said he pays $300 every four weeks.
They took occupancy February, April, and May 1985, respectively,
and none has a lease. They all stated that the units they occupy
were formerly one apartment renting for $650 per month that was
divided into four rooms, rented separately, and sharing a kitchen
and bathroom. The tenants enclosed with their complaints a copy
of a letter from the White Plains Department of Buildings to the
owner stating that the cellar and third floor of the subject
ADM. REVIEW DOCKET NO. AK 810661 RO
building are being used as illegal dwelling units and that six
rooming units on the first floor have been increased to eight
units.
Another letter from the Department of Buildings to the
Administrator, dated March 13, 1986, states that the building
originally was permitted to have 4 units, that two more were added
to the third floor on August 18, 1981, and that another apartment
was established in the basement on May 19, 1984.
The record also contains a decision by the City Court of the
City of White Plains, dated April 1, 1986, in which it was
determined that the subject owner had increased six legally
conforming units on the first floor of the subject premises to
eight units in violation of the Building Code and Rooming House
Licensing Ordinance and that one apartment on the third floor had
been converted to separate rooming house units, also in violation
of the Rooming House Licensing Ordinance.
In answer to the complaints, the owner asserted that the
Emergency Tenant Protection Act (ETPA) specifically excludes
rooming house units from coverage and that the subject building
contains only four dwelling units. The owner stated that the
complaining tenants are roomers who occupy one apartment on a four
week to four week basis with no written lease. The owner provided
evidence of the rent paid by each complaining tenant's
predecessor.
On August 11, 1986, the owner advised the Administrator in
response to a request for additional information that there were
no tenants presently in occupancy and that all four apartments in
the building are vacant.
A letter from the White Plains Department of Buildings dated
August 21, 1986 stated that an inspection on that date revealed
that all four apartments on the second and third floor had been
vacated and that the only occupied rooms were six single furnished
units on the first floor.
On September 3, 1986, the owner notified the Administrator
that it did not consider the occupants of the first floor tenants
because the first floor is a legal rooming house.
In the order issued on October 7, 1986, the Administrator
determined that since the owner had failed to substantiate that
the tenants on the first floor are transient guests, the building
contains more than six dwelling units and is subject to the
Emergency Tenant Protection Act. The order established the rent
at $650 per month ($600 per four week period) for the entire
apartment and directed the owner to refund to the tenants their
proportionate share of overpayment of rent.
In the petition for administrative review, the owner argued
that the Administrator's order was arbitrary, capricious, and
against the weight of the evidence which shows that the subject
building contains four apartments (2 each on the second and third
floors) and a first floor that is zoned, legally occupiable, and
ADM. REVIEW DOCKET NO. AK 810661 RO
used exclusively as a rooming house. According to the owner, this
evidence establishes that the premises are not subject to the
Emergency Tenant Protection Act. The owner also asserted that
there was no basis for establishing the rent at $650.00 per month.
In an answer to the petition filed by an attorney for the
tenants, it is argued that the subject building has more than six
units as determined by the White Plains City Court.
In the decision issued on August 9, 1989, the Commissioner
denied the owner's petition, based on a finding that the portion
of the premises occupied by the complaining tenants is not exempt
from regulation as a tourist home serving transient guests since
these tenants had been residing there for a year before filing the
complaints and therefore could not be considered transient. The
Commissioner also found no reason to reexamine the Administrator's
determination of the initial rent.
Pursuant to the remand ordered by the Court, the Commissioner
has reconsidered the evidence of record and is of the opinion that
the petition should again be denied.
Section 8625 a (4) (a) of the Emergency Tenant Protection Act
provides an exception to stabilization for housing accommodations
in a building containing fewer than six dwelling units. In order
for a building to have six dwelling units, it need not have six
apartments subject to stabilization. Schacht v. City of New York
Housing and Development Administration, 63 Misc. 2d 1003, 314
N.Y.S.2d 104 (1970). The building must simply have six or more
"units" to be subject to the jurisdiction of the act which extends
to "all or any class or classes of housing accommodations in a
municipality, except ..." for those categories specifically
excluded from regulation.
It is clear from the facts and from the decision of the White
Plains City Court that the subject building consists of one
apartment in the basement, eight rooming units on the first floor,
two apartments on the second floor, one apartment on the third
floor, and three rooming units on the third floor. The number of
units exceeds six, bringing the building within the jurisdiction
of stabilization, regardless of the fact that some of the units
may be exempt.
Section 8625 a(8) does exempt "any tourist home serving
transient guests exclusively, or any part thereof". In the
subject building, since only the first floor units are legally
classified as rooming units to be used for transient purposes, the
accommodations occupied by the complaining tenants on the third
floor were properly determined to be subject to stabilization.
As for the determination that the lawful rent is $650 per
month, the Commissioner finds no basis for modifying this portion
of the Administrator's order. The owner submitted no evidence
pertaining to the rental history of the units that the complaining
tenants occupy and which they claim formerly constituted one
apartment. In the absence of any contrary evidence, the
Administrator properly established the rent using the tenants'
assertion that before being divided up, the apartment rented for
ADM. REVIEW DOCKET NO. AK 810661 RO
$650 per month. The rent receipts submitted by the owner purport
to establish the rent paid by the predecessors of the three
complaining tenants but the receipts contain no indication
specifying which unit the payments were for and since the building
concededly contains other rooming house units, the receipts are
not competent evidence of the rent for the third floor rooms.
Moreover, the rent paid by the prior roomers, even if proven, is
not determinative of the lawful rent for the complainants. The
lawful rent would be the rent charged and paid when the units
first became subject to stabilization, plus lawful increases
thereafter. The owner has repeatedly declined to submit evidence
regarding the prior rental history.
The Division has developed procedures to be used when an
owner defaults in its obligation to provide a complete rental
history. Those procedures involve selecting the lowest of the
following three possible rents: (1) the lowest rent for the same
size apartment in the building (2) the complaining tenant's rent
minus a guideline, (3) the last rent paid by the prior tenant.
The Commissioner finds, however, that given the particular
circumstances in this case, the use of the default method is
inappropriate. Since the owner has not registered any of the
apartments in the building, the lowest rent for the same size
apartment cannot be determined. It also appears from the evidence
in the record that there may not be another unit in the building
of the same size. The other two factors - the complaining
tenant's unit minus a guideline or the lowest rent paid by the
prior roomers - would allow the owner to benefit from the illegal
conversion of the former apartment to four separate rooms.
If the owner had submitted a complete rental history for the
apartment from the base date, pursuant to the requirement to do
so, the lawful stabilized rent would be determined based on that
rental history. It would be contrary to the purpose of the
Emergency Tenant Protection Act of protecting tenants from
speculative, unwarranted and abnormal increases in rents to allow
the owner herein to benefit from its failure to meet its statutory
obligation to maintain and produce on request relevant rent
records. Therefore, in the absence of any contradictory evidence
from the owner, the Commissioner deems it appropriate to rely on
the assertion by the three complaining tenants that the rent
charged and paid by the former tenant of the apartment was $650
per month. The Administrator's determination that the Legal
Regulated Rent is established at $650.00 per month (or $600.00 per
four week period) is affirmed. No increases above this amount are
permitted until the owner properly registers the units as required
by Part 2509 of the Tenant Protection Regulations.
The directive to the owner to refund to the tenants their
proportionate share of any overpayment of rent is also affirmed.
THEREFORE, in accordance with the Emergency Tenant Protection
Act of 1974 and the Tenant Protection Regulations, it is
ORDERED, that this petition be and the same hereby is denied
ADM. REVIEW DOCKET NO. AK 810661 RO
and the Administrator's order be and the same hereby is affirmed
as modified in accordance with this order and opinion.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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