AL 410101 RT, AL 410190 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  S.J.R. NO. 5400, 5406
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEALS OF                             DOCKET NO. AL 410101 RT
                                              :             AL 410160 RO
          LYDIA HERMAN AND HENRY SCHREIBER       D.R.O.DOCKET NO.TC-082399-G  
                     

                                PETITIONERS   : 
          ------------------------------------X                             
          ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN PART 
          AFTER RECONSIDERATION


               On December 4, 1986, the above-named petitioner-owner and 
          tenant filed Petitions for Administrative Review against an order 
          issued on November 3, 1986, by the Rent Administrator, 10 Columbus 
          Circle, New York, New York, concerning the housing accommodations 
          known as 42 West 88th Street, New York, New York, Apartment No. 
          5R, wherein the Rent Administrator determined that the owner had 
          overcharged the tenant.

          On September 24, 1990, the Commissioner issued an Order and 
          Opinion granting the petitions in part.  Subsequent thereto, the 
          petitioner owner and tenant filed petitions in the Supreme Court 
          pursuant to Article 78 of the Civil Practice Law and Rules 
          requesting that the Order of the Commissioner be annulled (owner) 
          and modified (tenant).  On December 21, 1990, the proceeding was 
          remitted to DHCR for further consideration.

          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 
          provisions 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 these appeals is whether the Rent 
          Administrator's order was warranted.

          The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2526.1 of the current Rent Stabilization 
          Code and Section 42A of the former Rent Stabilization Code.

          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.  










          AL 410101 RT, AL 410190 RO

          This proceeding was originally commenced by the filing in 
          February 1984 of a rent overcharge complaint by the tenant who 
          stated that she first moved to the subject apartment in October 
          1981 pursuant to a one year lease at a rental of $510.20 per 
          month and that a prior tenant had paid only $333.00 per month in 
          rent.  In support of such contention, the tenant submitted a copy 
          of prior tenant Julia Holm's cancelled rent check dated in August 
          1981 for $333.00.  Such check listed Julia Holm's address as the 
          subject apartment.

          On August 10, 1984, the owner was served with a copy of the 
          tenant's complaint and an answer form directing him to submit a 
          complete rental history from the base date and advising that the 
          owner was subject to treble damages on rent overcharges collected 
          on and after April 1, 1984.  No response was received from the 
          owner.  Subsequently on July 10, 1986, the owner was served with 
          a Final Notice of Pending Default giving him a final opportunity 
          to submit the required rent records and stating that treble 
          damages will be imposed on any overcharge occurring after April 1, 
          1984 for which the owner fails to satisfy the Division that the 
          overcharge was not willful.  In response to this notice, the owner 
          stated in substance that he had already submitted the requested 
          documents to the CAB (Conciliation and Appeals Board, the agency 
          formerly charged with enforcing the Rent Stabilization Law) and 
          was now submitting a copy of the annual apartment registration 
          showing that on April 1, 1985, the rent of the subject apartment 
          was $561.20 and that this was the lawful rent since it had not 
          been appealed within 90 days of the registration.

          On September 26, 1985, the tenant's attorney submitted a 
          letter stating in substance that following the tenant's filing of 
          the overcharge complaint, the owner commenced a non payment 
          action against the tenant, that the tenant counterclaimed on the 
          basis among other things that the rent was paid and that the 
          matter was settled by a so ordered stipulation signed on January 
          31, 1985 under index number 42537/84.  A copy of the stipulation 
          was also submitted by the tenant's attorney.  It was stated in 
          the stipulation inter alia that commencing June 1, 1985, the 
          tenant would pay $480.00 per month for use and occupancy of the 
          subject apartment with an increase over $480.00 upon lease renewal 
          and that the tenant's complaint previously filed under docket TC- 
          082399-G would not be affected by the stipulation and would 
          continue to be processed.

          In Order Number CDR 25,786, the Rent Administrator determined 
          that based on the failure to submit a rental history, the initial 
          lawful stabilization rent was $375.00 per month and that the owner 
          had collected a rent overcharge of $9176.76 from October 15, 1981 
          through October 14, 1986 including interest on that portion of the 
          overcharge occurring on and after April 1, 1984.  The tenant's 
          initial rent on October 15, 1981 was established at $375.00 by 
          using the lowest stabilized rent for the same size apartment as 



          the subject apartment.  The lowest stabilized rent was the rent of 
          apartment 3R.



          AL 410101 RT, AL 410190 RO
          In the owner's petition, the owner contends in substance that 
          he did submit copies of all required leases to the CAB proving 
          that the tenant was not overcharged, that the Rent Administrator's 
          order failed to take into account the fact that the tenant started 
          paying a rent of $480.00 as a result of the court stipulation, 
          that the owner thought the matter had been resolved by the court 
          settlement and that the owner did not collect $561.20 per month in 
          rent from the tenant from October 15, 1982 to October 14, 1985.

          In answer to the owner's petition, the tenant stated in 
          substance that following her complaint of rent overcharge, the 
          owner refused to accept the tenant's rent checks and instead 
          instituted a non payment proceeding which was dismissed in court.

          On October 4, 1989, the DHCR advised the owner that the DHCR 
          had no record of any prior leases submitted by the owner and 
          afforded the owner another opportunity to submit a complete rental 
          history and proof that such rental history had previously been 
          submitted to the CAB.  In response to the DHCR directive, the 
          owner on October 31, 1989 submitted a copy of a stipulation 
          entered into between the parties to settle DHCR Enforcement Case 
          19746HL and stated that such stipulation would allow a close out 
          of the owner's and tenant's appeals herein.  However an 
          examination of the November 15, 1988 enforcement stipulation 
          discloses that such stipulation has no bearing on the proceedings 
          herein and indeed contains a clause as follows: "(4) Tenant and 
          landlord reserve their rights to continue their respective claims 
          now being decided by the DHCR,".

          On November 16, 1989, the owner submitted a statement to the 
          effect that in Housing Court under index number 102039/87, a 
          settlement was reached on January 20, 1989 in which a judge 
          reviewed the tenant's claims in the tenant's appeal herein and 
          dismissed them.  The owner was then asked to submit a copy of the 
          January 20, 1989 stipulation.  On December 29, 1989, the owner 
          submitted a copy of the January 20, 1989 stipulation.  Such 
          stipulation stated that the tenant's counterclaims had been 
          dismissed by the court but that the owner was ordered to pay 
          $5,000.00 in attorney's fees for the tenant's defense of the 
          action.  The tenant's attorney advised that this stipulation was 
          the settlement of a non payment proceeding brought by the owner's 
          attorney and had no effect on the tenant's overcharge complaint.  

          On January 31, 1990, the owner submitted a statement to the 
          effect that the tenant's 1984 rent was legally correct because the 
          tenant did not challenge it within the ninety day period.  In 
          addition, the owner submitted a copy of prior tenant Julia Holm's 
          lease in effect from February 25, 1980 until February 24, 1982 at 
          a rental of $510.18 per month.





          In his Article 78 Petition, the owner herein Henry Schreiber 
          claimed that "Westhattan Realty Corporation" should have been 
          listed as the owner rather than Henry Schreiber since Henry 
          Schreiber is only the President of Westhattan Realty Corporation 
          and not the actual owner.  In addition, the owner stated that 







          AL 410101 RT, AL 410190 RO
          treble damages should not have been imposed because of the 
          stipulation entered into between the parties and in any event the 
          imposition of treble damages should have been limited to a two 
          year period.

          On January 20, 1992, the owner submitted a copy of a rent 
          ledger showing that the tenant herein had not paid rent from 
          October 1984 up to June 1985 and stated that any overcharge 
          calculations by the DHCR must take this factor into account.

          In the tenant's petition, the tenant contends in substance 
          that her initial legal regulated rent should have ben set at 
          $333.00 which was the last rent of prior tenant Holm rather than 
          $375.00 (lowest stabilized rent of same size apartment) and that 
          the imposition of treble damages was warranted.  Subsequently, the 
          tenant submitted an affidavit from Julia Holm in which Ms. Holm 
          stated that she is now residing in California , that she occupied 
          the subject apartment from April 1974 through June 19, 1981, and 
          that her last rent for the subject apartment was $333.00.

          In response to the tenant's petition, the owner stated in 
          substance that the imposition of treble damages was not warranted 
          because the tenant's complaint was filed prior to April 1, 1984 
          and the overcharge was not willful.  In support of his 
          contentions, the owner cited DHCR Order Number CDR 13,370 and DHCR 
          Order BG 410232-RT.

          In her Article 78 Petition, the tenant contended in substance 
          that the last rent of prior tenant Holm - $333.00 - should have 
          been used as the initial rent of the tenant herein; that the 
          tenant should have been awarded attorney's fees, that the 
          calculation of the excess security to be refunded was incorrect 
          because although the owner reduced the rent to $480.00 effective 
          June 1, 1985, he did not reduce the tenant's security at that 
          time; and that the tenant should have been awarded interest as 
          well as treble damages.

          It is noted in the Commissioner's September 24, 1990 Order, 
          that although treble damages were imposed, the initial rent of the 
          tenant herein was determined to be $375.00 - the lowest 
          stabilized rent for an apartment in the subject building with the 
          same number of rooms.  Prior tenant Holm's last rent was not used 
          because the evidence submitted by the parties as to the amount of 
          such rent was inconclusive.  However upon remit, a hearing was 
          held on October 7, 1991 to determine the last rent paid by the 
          prior tenant Julia Holm.  At such hearing, the owner and tenant 
          appeared and were represented by counsel.  In addition Julia Holm 




          appeared and testified as to the rent she paid.  The owner and the 
          owner's son also testified.  The Administrative Law Judge who 
          presided at the hearing found that Julia Holm's testimony that her 
          last rent for the subject apartment was $333.00 was credible and 
          noted that the owner and owner's son were unable to submit 
          original leases and rent cards for the subject apartment.

          The Commissioner is of the opinion that these petitions 


          AL 410101 RT, AL 410190 RO
          should be granted in part.

          At the outset, an examination of the court and enforcement 
          stipulations and other evidence submitted by the parties discloses
          that such stipulations did not decide the tenant's overcharge 
          complaint herein and that the tenant never waived her right to 
          have her overcharge complaint determined.

          Turning to the merits, Section 42A of the former Rent 
          Stabilization Code provides in pertinent part that an owner is 
          required to retain complete rent records for each stabilized 
          apartment from June 30, 1974 and produce them to the DHCR upon 
          demand.  If the apartment was decontrolled from the Rent Control 
          Law after June 30, 1974, the owner must provide satisfactory 
          documentary evidence of the apartment's date of decontrol.

          In cases where the owner has not produced the required rental 
          history, DHCR has adopted a method to compute an apartment's 
          legal regulated rent.  Such rent is computed at the lowest of the 
          following three amounts:

          1)  the lowest stabilized rent for an apartment in the 
          subject building with the same number of rooms.

          2)  the current tenant's initial rent minus any allowance for 
          the tenant's initial lease.

          3)  the prior tenant's last rent, if known.

          In the instant case, the owner failed to submit a rental 
          history although given several opportunities to do so.  Based on 
          the testimony taken at the October 7, 1991 hearing and the 
          findings of the Administrative Law Judge with regard to 
          credibility, the initial legal regulated rent of the tenant herein 
          is established by using amount (3) the prior tenant's last rent 
          of $333.00.  In addition, the Rent Administrator incorrectly did 
          not freeze the rent for the entire period of the overcharge as is 
          mandated by DHCR policy when an owner fails to supply a complete 
          rental history.  This error is being corrected herein.

          The Commissioner further notes that the owner is correct in 
          his contention that as a result of the January 31, 1985 court 
          stipulation the tenant started paying $480.00 per month in rent 
          effective June 1, 1985 and that this factor was not taken into 



          account in the Rent Administrator's order.  This error is also 
          being corrected herein.  The Commissioner also notes that the 
          owner has not submitted any timely evidence to support his 
          contention that the tenant did not pay $561.20 per month in rent 
          from October 15, 1982 to June 1, 1985.  It is noted that the 
          owner's January 20, 1992 submission of a copy of a rent ledger was 
          not submitted either in the proceeding before the Rent 
          Administrator nor on the original appeal nor in the Article 78 
          Petition.  It cannot be considered for the first time in this 
          proceeding which is not de novo since the owner has given no 
          explanation or excuse for the late submission.  In addition, it is 
          noted that although the owner reduced the rent to $480.00 per 







          AL 410101 RT, AL 410190 RO
          month effective June 1, 1985, there is no evidence to show that 
          the tenant's security was also reduced.

          The owner's contention that the tenant's overcharge complaint 
          must be dismissed because it was not filed within 90 days of the 
          1984 apartment registration is without merit.  The tenant's 
          overcharge complaint herein was filed prior to April 1, 1984, and 
          may not be dismissed because the owner registered the apartment 
          rent  subsequent to the filing of the tenant's complaint.

          The owner Henry Schreiber's contention in his Article 78 
          Petition that he should not have been listed as the owner of the 
          subject premises is without merit.  The evidence of record 
          discloses that Henry Schreiber was listed as the owner on the 
          initial lease for the tenant herein and that Henry Schreiber filed 
          a Petition for Administrative Review listing himself as the owner.  
          Moreover, Henry Schreiber never contested that he should not have 
          been considered the owner of the subject premises either in the 
          proceeding before the Rent Administrator nor on appeal.

          With regard to the tenant's contention that the imposition of 
          treble damages was warranted, Section 2526.1 of the current Rent 
          Stabilization Code provides in pertinent part that any owner who 
          is found by the DHCR to have collected a rent or other 
          consideration in excess of the legal regulated rent on and after 
          April 1, 1984 shall be ordered to pay to the tenant a penalty 
          equal to three times the amount of such excess.  If the owner 
          establishes by a preponderance of the evidence that the overcharge 
          was not willful, the DHCR shall establish the penalty as the 
          amount of the overcharge plus interest from the date of the first 
          overcharge on or after April 1, 1984.

          In the instant case, the owner has not submitted any evidence 
          to substantiate his claim that the overcharge was not willful.  
          Further, the evidence of record discloses that the owner was 
          notified on August 10, 1984 and July 10, 1986 of the possible 
          imposition of treble damages.  It is noted that the cases cited 
          by the owner in his answers to the tenant's petition dealt with 
          situations where an owner was not informed of the possibility that 
          treble damages would be imposed and therefore such cases are not 



          relevant to the proceeding herein where the owner was duly 
          notified of such possibility prior to the issuance of the Rent 
          Administrator's order.  In addition, the owner's contention that a 
          stipulation entered into between the parties should have barred 
          the imposition of treble damages is without merit since the 
          stipulations between the parties as previously explained were 
          irrelevant to the overcharge proceeding herein and do not 
          establish that the overcharges found herein were not willful.  
          Further, contrary to the owner's contention, treble damages may be 
          imposed for a period in excess of two years.  Accordingly, the 
          imposition of treble damages was warranted.

          With regard to the tenant's contention in her Article 78 
          Petition that the tenant should have been awarded attorney's fees, 
          it is noted that pursuant to Section 2526.1(d) of the current Rent 
          Stabilization Code, the assessment of attorney's fees is 


          AL 410101 RT, AL 410190 RO
          discretionary.  Under the circumstances of this case including the 
          arguments raised by the parties in support of their contentions, 
          the Commissioner deems it inapproriate to award attorney's fees.  
          Further, it is noted that at no time during the administrative 
          proceedings either before or after the filing of the Article 78 
          Petition did the the tenant make a request for attorney's fees.

          With regard to the tenant's contention that interest as well 
          as treble damages should have been imposed, it is noted that CAB 
          practice did not allow for the imposition of interest on 
          overcharges occurring prior to April 1, 1984, and that the current 
          Rent Stabilization Code precludes the imposition of interest on 
          overcharges occurring on and after April 1, 1984 where treble 
          damages have already been assessed.

          Taking the above factors into account, the Commissioner has 
          recalculated the lawful stabilization rent and amount of rent 
          overcharge for the subject apartment, including treble damages on 
          the overcharge occurring on and after April 1, 1984.  The lawful 
          stabilization rents and amount of rent overcharge are set forth on 
          the amended rent calculation chart attached hereto and made a part 
          hereof.

          Because this determination concerns lawful rents only through 
          October 14, 1986, the owner is cautioned to adjust subsequent 
          rents to an amount no greater than that determined by this order 
          plus any lawful increases, and to register any adjusted rents with 
          this order and opinion 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 provisions of the Rent 
          Stabilization Law and Code, it is

          ORDERED, that these petitions for administrative review be, 
          and the same hereby are, granted in part, and, that the order of 
          the Rent Administrator  and the Commissioner's prior order and 
          opinion issued on September 24, 1990, be, and the same hereby are, 
          modified in accordance with this order and opinion.  The lawful 
          stabilization rents and the amount of the rent overcharge are 
          established on the attached chart which is fully made a part of 
          this order.  The amount of the rent overcharge through October 14, 
          1986 is $23,209.00.

          ISSUED









          AL 410101 RT, AL 410190 RO

                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner







                     































    

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