AL 410657-RO; BC 410574-RO (refile of BA 410246-RO)

                                STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEAL OF                              DOCKET NOS.: AL 410657-RO &
                                                          BC 410574-RO
                                             (refile of BA 410246-RO)
                                             BA 410142 RT
           Theodore Galeza 
                  and                        DRO DOCKET NO.: L-3113125-R
           Plaza Realty Investors,                           CDR 27626

                                  REVIEW IN PART

      The above-named petitioner-owner timely filed and refiled almost 
      identical Petitions for Administrative Review against an order issued on  
      December 2, 1986, by the Rent Administrator of the Columbus Circle 
      District Rent Office concerning the housing accommodations known as     
      200 East 33rd Street, Apartment 24G, New York, New York.  On January 6, 
      1987 the above named petitioner tenant also filed a Petition for 
      Administrative Review against the same order.

      The petitions are being consolidated for determination herein.

      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 tenant herein, filed a pre-April 1, 1984 overcharge complaint. A 
      complete rental history was submitted by the owner.

      The herein appealed order of the Rent Administrator established 
      stabilized rents (the last being $1,065.11 as of March 1, 1986) and 
      found a total overcharge of $2,198.61 through October 31, 1986 (giving 
      the owner credit for a prior refund of $501.84) and imposing interest on 
      the overcharges occurring on and after April 1, 1984.

      In its petitions the owner, in substance, urges that the Rent 
      Administrator understated the rents and overstated the overcharges 
      because of miscalculations involving uncollected Section 42C increases 
      to which the owner was entitled.  The owner also alleges that it has 
      made an additional refund of $672.10 to the tenant.

          AL 410657-RO; BC 410574-RO (refile of BA 410246-RO)

      In the tenant's petition, the tenant alleges in substance that the Rent 
      Administrator mistakenly listed some of the rents charged to the tenant 
      and that the imposition of attorney's fees and treble damages was 
      warranted.  In support of his contentions, the tenant submitted copies 
      of rent checks paid to the owner.

      In response to the tenant's petition, the owner submitted copies of rent 
      ledgers to show the actual rents paid by the tenant.  

      The Commissioner is of the opinion that the owner's petitions should be 
      denied and that the tenant's petition should be granted in part.

      Section 42C of the Rent Stabilization Code provides for an annual rent 
      increase of not more than 2.2% over the initial rent where a building is 
      receiving tax exemption pursuant to Section 421 of the Real Property Tax 
      Law.  Section 4.2 of the Rules and Regulations Governing the 421-a 
      Partial Tax Exemption Program limits such rent increases to a total of 
      19.8% nine increases- 2.2% x 9 = 19.8%.  Further all 2.2% increases 
      taken prior to November 19, 1982 are included in the base rent of an 
      apartment for purposes of computing guidelines increases and all 2.2% 
      increases taken after November 19, 1982 are not added to an apartment's 
      rent for computing guidelines increases but are collected as separate 

      An examination of the records in this case including the copies of the 
      rent checks and rent ledgers submitted by the parties on appeal 
      discloses that the Rent Administrator incorrectly listed some of the 
      rents actually charged the tenant.  Further the record indicates that 
      the owner was granted a tax exemption pursuant to Section 421-a and was 
      entitled to receive nine Section 42C increases of 2.2% but that the 
      owner incorrectly took ten Section 42C increases.

      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 overcharge was due to the owner's compounding 
      of guideline increases during the guidelines nine period and taking a 
      tenth Section 42C increase to which it was not entitled.  Pursuant to 
      Policy Statement 89-2, these errors are considered hypertechnical errors 
      for which the imposition of treble damages is not warranted.

      With regard to the tenant's contention that attorney's fees are 
      warranted, it is noted that the tenant failed to raise this allegation 
      in the proceeding before the Rent Administrator and has not submitted 
      any proof that an attorney was engaged during the course of this 
      proceeding.  Accordingly, this contention is denied.
      The Commissioner further notes that the owner's claimed additional 
      refund of $672.10 cannot be used in the calculations herein since it 
      occurred after the Rent Administrator's order was issued.

          AL 410657-RO; BC 410574-RO (refile of BA 410246-RO)

      The Commissioner has recalculated the lawful stabilization rents and 
      amount of the rent overcharge for the subject apartment taking the 
      aforementioned factors into account.  The lawful stabilization rents and 
      amount of the 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 the date 
      of October 31, 1986 used in the Administrator's order being appealed, 
      the owner is cautioned to adjust subsequent rents to an amount no 
      greater than that determined by this order plus any lawful increases 
      with this Order and Opinion being given as the explanation for the 

      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 in the same manner as a judgment or not 
      in excess of twenty percent per month thereof may be offset against any 
      rent thereafter due the owner.

      THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

      ORDERED, that the tenant's petition be, and the same hereby is, granted 
      in part; that the owner's petitions be, and the same hereby are, 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 amount of 
      the rent overcharge through October 31, 1986 is $2781.34.


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner


          AL 410657-RO; BC 410574-RO (refile of BA 410246-RO)


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