STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. AL410276RO
: DISTRICT RENT OFFICE
Time Equities, Inc., DOCKET NOS. L3115951R
TENANT: Steven Rush
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On December 5, 1986, the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on November 14, 1986,
by the District Rent Administrator, 10 Columbus Circle, New York,
New York, concerning the housing accommodations known as 194 Riverside
Drive, New York, New York, Apartment No. 4A, wherein the District Rent
Administrator determined that the owner had overcharged the tenant.
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 herein is whether the Rent Administrator's order was
The applicable section of the Law is Section 2526.1 of the current Rent
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 commenced on March 30, 1984, by the tenant's filing
of a rent overcharge complaint.
In answer to the tenant's complaint, the owner submitted a complete
rental history for the subject apartment and informed the Division of
Housing and Community Renewal (DHCR) that it assumed management of the
subject premises on March 8, 1983.
In Order Number CDR26,761 issued November 14, 1986, the District Rent
Administrator determined that the owner had overcharged the tenant from
January 1, 1979, through December 31, 1985, and directed the owner to
refund to the tenant $2104.54.
In this petition, the owner contends in substance that the District Rent
Administrator's order is incorrect and should be modified because the
Administrator incorrectly assessed overcharges against the owner for the
period from January 1, 1979 through December 31, 1985 when the owner
didn't assume management of the subject premises until March 8, 1983 and
the complaining tenant purchased the subject apartment as a cooperative
on August 20, 1985. In support of these contentions, the owner submits
copies of the first and last pages of the net lease dated March 8, 1983
under which the managing agent herein assumed management of the subject
premises for a twelve year period from the owner 920 East 174th Street,
Inc. c/o Francesco Chibbaro and the cooperative closing statement dated
August 20, 1985.
The tenant did not submit a response to this petition.
The Commissioner is of the opinion that this petition should be granted
Section 2526.1(f) of the current 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 owner.
In view of the difficulties encountered by tenants in locating owners to
whom rent payments are no longer made and in obtaining rent overcharges
paid to such owners and in view of the change in policy to hold current
owners liable for all overcharges collected on or after April 1, 1984;
the policy for rent overcharges collected prior to April 1, 1984 of
limiting the obligation of a new owner to refund only overcharges
actually collected by it must be strictly construed and applied only if
an actual change of ownership of the premises (transfer of title) has
occurred. Otherwise the owner currently collecting the rent is
responsible for refunding all rent overcharges.
In the instant case the evidence of record discloses no change of
ownership during the period of the rent overcharge (from January 1, 1979
through August 20, 1985). Accordingly, the Rent Administrator properly
directed the owner herein to make the entire refund. However, the
record also reveals that the tenant purchased the subject apartment as
a cooperative on August 20, 1985. Accordingly, the owner is only
responsible for overcharges from January 1, 1979 through August 20, 1985
and not December 31, 1985 as determined by the Rent Administrator.
Therefore the total overcharge including interest through August 20,
1985 in $1,958.53.
This order is issued without prejudice to whatever rights, if any, Time
Equities, Inc. has against the fee owner for the recovery of that
portion of the overcharge refunded by Time Equities, Inc, to the tenant
which was actually collected by the fee owner.
This order may upon the expiration of the period in which Time Equities,
Inc. may institute a proceeding pursuant to Article 78 of the Civil
Practice Law and Rules, be filed and enforced in the same manner as a
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, granted in part,
and the District Rent Administrator's order be, and the same hereby is,
modified to show that the owner herein is responsible for refunding a
total overcharge of $1,958.53 - the amount of overcharge occurring from
January 1, 1979 through August 20, 1985. In all other respects, the
Administrator's order is affirmed.
JOSEPH A. D'AGOSTA