Docket No.: ARL 06237-N
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.: ARL 06237-N
D.R.O. DOCKET NO.:
ARTHUR T. MOTT, N-GC-85-S-435-R
TENANTS: M. & C. Martin
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On December 11, 1985, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
December 5, 1985, by the Rent Administrator, 50 Clinton Street,
Hempstead, New York, concerning housing accommodations known as
Apartment 140, 21-31 Brewster Street, Glen Cove, New York,
wherein the Rent Administrator determined that there had been an
overcharge and ordered a refund of $1,119.84.
The Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion of the record relevant
to the issues raised by the administrative appeal.
The tenants commenced this proceeding on August 28, 1985 by filing
an overcharge complaint, based in part on an alleged failure by
the owner to provide a complete rental history. The tenants
alleged their initial rent in August 1985 was $775.00.
The tenants also alleged that the owner had told them that the
Division had approved an electrical conversion whereby the rent
would be reduced by $20.00 per month and the tenants would pay for
their own electricity. However, at a tenants' association meeting
the tenants allegedly learned that the owner had not received
permission for the conversion and that a Supreme Court decision
then in effect required the owner to provide electricity as a
service included in the rent. Accordingly, the tenants contend
that they were fraudulently coerced into signing a card
permitting their separate billing for electricity.
Finally, the tenants alleged that they had been pressured to sign
a blank RA79 MCI form for "any improvements the landlord may make
in the future." However, the tenants refused to do so.
In a notice dated October 21, 1985, the Administrator noted that
on July 26, 1983 the owner had submitted a rent roll showing the
legal regulated rent for the subject apartment to be $464.83 as of
July 20, 1983. The owner was requested to explain the increase to
$775.00 in the complaining tenants' August 1, 1985 lease.
The owner was further requested to submit the lease in effect on
Docket No.: ARL 06237-N
July 20, 1983 and all subsequent leases, a copy of the Initial
Apartment Registration with proof of service on the tenant then in
occupancy, and any documentary evidence that the owner had
complied with Section 48 (now Section 2503.8) of the Regulations,
by supplying a copy of the written notice required by that Section
justifying the tenants' alleged legal regulated rent of $775.00.
In answer to the complaint, the owner stated that on November 20,
1985 he had filed a Petition for Administrative Review appealing
the Administrator's Order Number GCTC 84-4, involving a prior
tenant of the subject apartment, in which the Administrator
established the March 1, 1984 rent as $495.04, rather than the
$700.00 rent actually charged.
The owner requested that he not be required to answer the
complaint herein until the pending petition was decided.
In a letter dated November 26, 1985, the tenants opposed the
granting of such an extension, alleging that the owner's purpose
was to delay the proceeding and to harass the tenants.
In Order Number N-GC-85-S-435-R, issued December 5, 1985, the Rent
Administrator noted that the owner had not submitted the requested
documentation along with his November 21, 1985 request for an
extension. The Administrator further noted that Section 2503.8 of
the Tenant Protection Regulations requires an owner to provide a
new tenant with written notice of the prior rent and a
demonstration of the legality of the vacancy rent being charged.
Section 2503.8 further provides that failure to provide such a
notice prevents an owner from increasing the prior legal rent
until such time as the notice is provided.
The Administrator established the vacancy rent for the complaining
tenants as $495.04 (the rent established in GCTC 84-4) plus a 6%
Guidelines increase and a vacancy allowance of $41.25 for a total
of $565.99. However, based on the owner's failure to comply with
Section 2503.8, the Administrator computed an overcharge of
$1,119.84, being ($775.00 - $495.04) times 4 months, that is, the
Administrator used the prior rent of $495.04 because of the
owner's failure to comply with Section 2503.8.
In this petition, the owner contends that the Rent Administrator's
Order is incorrect and should be modified because it was issued
while the owner's petition against Order Number GCTC 84-4 was
still pending. The owner also asserts that the documents
requested by the Administrator in the October 21, 1985 Notice
[form RN-2(4/85)] had all been submitted by hand to the "Local
Docket No.: ARL 06237-N
Rent Office" on November 20, 1985 with the owner's petition
against Order Number GCTC 84-4.
The owner asserts that the following four leases were submitted
with his petition against GCTC 84-4:
Tenant Term Rent
New World Applications 3/1/81 - 2/29/84 $464.83
Omar Amos 7/1/84 - 6/30/85 $750.00
Carole Joel 7/1/85 - 6/30/86 $750.00
Mark Martin 8/1/85 - 7/31/86 $775.00
The owner asserts that these rents were adjusted to $495.04,
$536.29, $622.08 and $686.36, respectively, but did not state
when those adjustments took place.
The owner further contends that the complaint in the present
proceeding challenged the Legal Regulated Rent established in the
RR-1 (Registration) Form which had not been objected to (as
allegedly established in the owner's petition against GCTC 84-4).
By implication, the owner is asserting that registered rent
($700.00) became the base rent since not timely objected to and
that Order Number N-GC-85-S-435-R, herein under appeal, did not
consider that registered rent.
The owner further argues that N-GC-85-S-435-R should be modified
or revoked pursuant to Regulation 2507.8 which allows such action
based on an illegality or irregularity in a vital matter.
In addition, the owner contends that he had complied with Section
2503.8 of the Regulations (which requires, inter alia, notice to a
new tenant of the prior tenant's rent). Attached to this petition
is a purported copy of a Notice pursuant to Section 2503.8, signed
by the complaining tenants on July 27, 1985, stating their initial
rent of $775.00 was preceded by a rent of $814.47 (sic) pursuant
to a lease with expiration date in June 1, 1986.
Finally, the owner states that the Administrator's establishment
of the rent at $569.99 was incorrect due to the failure to include
$11.32 for a 2% electrical surcharge, $4.14 for a Major Capital
Improvement (MCI) increase for a roof, and a $2.10 MCI increase
for a boiler, for a total of $583.55. The owner stated that he
would accept no less than this amount while this petition is
pending. No documentation of the MCI increases is submitted with
the owner's petition.
In answer to this petition, the tenants contend that the order
should be upheld because a stay pending the decision in GCTC 84-4
would have enabled the owner to collect overcharges which would
then be difficult to recover. To support this allegation, the
tenants claim in their August 1987 answer that they vacated the
Docket No.: ARL 06237-N
subject apartment in January 1986 but are still awaiting the
return of their security deposit. In addition, they allege that
in a court proceeding the owner is attempting to collect the money
the Division has declared as overcharge.
Regarding the petitioner's allegation that he complied with
Section 2503.8 of the Regulations, the tenants note that the prior
rent stated in the Section 2503.8 notice form was $814.47, i.e.,
an amount greater than the complaining tenant's initial rent and
greater than any rent admitted by the owner for any prior tenant.
The tenants argue that this form thereby demonstrates the owner's
lack of credibility and should not be accepted as proof of
compliance with Section 2503.8.
The tenants deny ever having been served with the 1985 Apartment
Registration form (RR2-A85) submitted by the owner with his
petition, even though the complaining tenants are named on that
The Commissioner is of the opinion that this petition should be
granted in part.
While it would not have been an error for the Administrator to
have waited for the owner's then-pending petition against order
GCTC 84-4 to be decided, there was clearly no obligation to do so.
Having resolved the issue of rent and stabilization status in
order number GCTC 84-4, for a prior tenant, the Administrator
properly determined the lawful rent for the subsequent tenant
based thereon. The owner's pending appeal of order number GCTC
84-4 had the effect of staying the owner's obligation to refund
the collected overcharges determined in that order. However, the
prospective determination of the lawful rent was not stayed and so
was in effect at the time the order herein under review was
The Commissioner notes that the owner's appeal of order number
GCTC 84-4 resulted in two administrative appeal orders, ART (sic)
06238-N, issued May 28, 1987, and AK 710448-RO, issued October 1,
1987, in both of which the owner's petition was denied. That is,
order number GCTC 84-4 and the rents established therein and
relied upon by the Administrator in order number N-GC-85-S-435-R
The Commissioner further notes that the file with docket number
GCTC 84-4 does contain a submission by the owner on November 20,
1985. This submission includes some, but not all, of the items
requested by the Administrator on October 21, 1985. In
particular, it contains a purported copy of the 1984 registration
of the subject apartment [form RR-1 (10-83)], stating a $700.00
rent in April 1, 1984. However, the submission does not include
the requested proof of service of the RR-1 on the tenant then in
occupancy. Accordingly, the owner's allegation that the tenant
Docket No.: ARL 06237-N
herein could not challenge the April 1, 1984 registered rent is
without merit. Furthermore, the Administrator in order number
GCTC 84-4 established the March 1, 1984 - February 28, 1985 lawful
rent at $495.04 in a proceeding involving the very prior tenant
named on the 1984 registration form. Thus, the April 1, 1984
registered rent was successfully challenged by the prior tenant
and therefore could have no binding effect on any subsequent
tenant. As noted above, order GCTC 84-4 has been affirmed by the
Commissioner. Moreover, according to Division records there has
been no appeal of the orders in which the Commissioner upheld
order number GCTC 84-4.
Based on the above discussion, the owner's claim to have complied
with Section 2503.8 by the alleged filing in 1985 which stated a
prior rent of $814.47 is clearly without merit.
The Commissioner further finds that the owner's contention that
the order herein under review should be modified or revoked based
on an irregularity in a vital matter is without merit.
Finally, the petitioner has alleged that the Administrator's
computation failed to include an electrical surcharge and MCI rent
increases for a boiler and a roof. A search of Division records
reveals that the owner received a $.70 per room rent increase for
a new boiler in order number GCLI 84-203/378, issued January 28,
1985, and affirmed in ART 02120-N, issued March 24, 1986. Thus,
the owner is correct that the August 1, 1985 lease for the
complaining tenant could contain a charge for this increase.
Division records indicate that the apartment has three rooms,
therefore the Administrator's order is hereby modified to show a
$2.10 MCI increase added to the August 1, 1985 rent. (Even
though the owner raised this issue for the first time on appeal,
the Administrator is deemed to have notice of DHCR orders.)
Similarly, on November 14, 1984, the owner received a $1.38 per
room increase for a new roof in order number GCLI 84-15/190 and
affirmed in ARL 01199-N. Accordingly, the owner was entitled to
collect $4.14 in the August 1, 1985 vacancy lease and the
Administrator's order is hereby modified to include this increase.
Regarding the 2% electrical surcharge, the owner is apparently
referring to that provided for leases commencing between October
1, 1984 and September 30, 1985 by the Nassau County Guideline
Board. (See Tenant Protection Bulletin Number 84-2.) That 2%
increase, which did "not become part of the legal regulated rent,"
applies only when the legal regulated rent includes electric and
gas service and only to "accommodations contained in solely
residential buildings." Regardless of the status of the subject
apartment, Division records indicate that the subject building is
not solely residential. Furthermore, the Commissioner notes that
Division records also indicate that in 1984 the owner herein
converted the subject premises from master metering to individual
Docket No.: ARL 06237-N
metering of electricity without prior DHCR approval, which
approval was subsequently obtained. See BA- 730471-RO et al.
Therefore the tenants herein were not subject to the 2% surcharge.
Accordingly, Administrator's order number N-GC-85-S-435-R is
hereby modified to increase the August 1, 1985 - July 31, 1986
lawful rent from $565.99 to $572.23 ($565.99 + $2.10 + $4.14).
However, the four month $1,119.84 overcharge found therein was
based on the prior rent of $495.04 because of the owner's failure
to comply with Section 2503.8 (formerly Section 48) of the
Regulations. Accordingly, the $1,119.84 overcharge found by the
Administrator is not affected by this order.
This order may, upon the expiration of the period in which the
owner may institute a proceeding pursuant to Article seventy-eight
of the civil practice law and rules, be filed and enforced by the
tenant in the same manner as a judgment.
The record shows the tenants have vacated the subject apartment.
A copy of this order will be served on the current tenant.
THEREFORE, in accordance with the Emergency Tenant Protection Act
and Regulations, it is
ORDERED, that this petition be, and the same hereby is, granted in
part and the Rent Administrator's order be, and the same hereby
is, modified in accordance with this Order and Opinion.