ADM. REVIEW DOCKET NO.: ARL 11250-L
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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: ARL 11250-L
: D.R.O. ORDER NO.:
16017, Examining Unit
DOUGLAS ELLIMAN, GIBBONS &
IVES,
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On June 19, 1986, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on May
19, 1986, by the Rent Administrator, Two World Trade Center, New
York, New York, concerning housing accommodations known as
Apartment 22-I, 340 East 93rd Street, New York, New York, wherein
the Rent Administrator determined that there had been an
overcharge and ordered a refund of $5855.48, including treble
damages and excess security.
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 tenant (Alisa Klagman) commenced this proceeding on
August 7, 1984 by filing an objection to registration, in part
based on the allegation that the April 1, 1984 rent registered by
the owner was incorrect, and that she had actually paid $972.21
on that date.
In answer to the complaint, the owner stated that there was
no overcharge and submitted copies of leases from December 15,
1980, the alleged base date for the subject building.
In Order Number 16017, Examining Unit, the Rent
Administrator determined that there had been the overcharge
stated above. The Administrator's calculations included a 5%
vacancy allowance under Guidelines 15 and did not grant the owner
any 2.2% increases pursuant to Section 421a of the Real Property
Tax Law (RPTL).
In this petition, the owner contends that the Rent
ADM. REVIEW DOCKET NO.: ARL 11250-L
Administrator's Order is incorrect and should be modified because
the Administrator did not credit the owner prospectively with
the 2.2% increase pursuant to RPTL Section 421a that the owner
had neglected to impose. In a supplement thereto the owner
contends that the Administrator should have allowed the owner a
15% vacancy allowance under Guidelines Order Number 15, rather
than the 5% actually used by the Administrator.
In answer to this petition, the tenant contends that the
order should be upheld because the owner has failed to prove that
the subject building is covered by Section 421a of the RPTL. In
addition, the tenant alleges the owner incorrectly computed the
2.2% increase for the years 1982, 1983 and 1984.
The petitioner was requested to submit proof of RPTL Section
421a coverage. In a letter dated August 7, 1989 the owner noted
that the tenant's initial lease included a rider advising the
tenant of the 421a coverage and of the 2.2% increases thereunder.
A copy of the lease and rider, both signed by the tenant, are
attached to this letter as is a letter from the New York City
Bureau of Finance, Bureau of Real Property Assessment, stating
that the subject building is covered by the 421a program. Also
attached to the owner's letter was the supplement to the
petition, raising the Guidelines 15 argument discussed above.
A copy of this letter and the attachments thereto were
served on the tenant on September 26, 1990, giving the tenant
twenty days to respond thereto. To date no such response have
been received.
The Commissioner is of the opinion that this petition should
be granted.
The subject building has been shown to be covered by the
421a program. Accordingly, the initial rent of $810.00 for the
December 15, 1980 to December 31, 1981 lease is the base rent and
the owner was entitled to add 2.2% of that rent ($17.82) on the
anniversary dates of that lease for a total of nine 2.2%
increases. Increases imposed before November 19, 1982 become
part of the base rent. Those imposed after that date are carried
as separate charges. Normally when an owner charges less than
the stabilized rent the difference is deemed waived and can not
be recouped at a later date. Collingwood Enterprises v. Gribetz,
N.Y.L.J., April 24, 1975, p. 17, col. 6 (Sup. Ct., N.Y. Co.,
Fine, J.). The 421a increase is an exception to this rule, so
that an owner can charge prospectively for 2.2% increases not
previously charged or previously only partially charged.
Accordingly, the attached rent calculation chart credits the
owner with certain 2.2% increases pursuant to RPTL Section 421a.
In addition, the owner is correct that it was entitled to a
15% vacancy allowance under Guidelines Order Number 15.
Guidelines Order 15 allows such a 15% increase "where no
additional levels of rent increase (vacancy allowances) have been
charged for that unit pursuant to provisions of any Rent
Guidelines Board Orders governing new tenancies commencing on or
ADM. REVIEW DOCKET NO.: ARL 11250-L
after July 1, 1975." (Otherwise, the allowance could be 0%, 5%
or 10%, depending on the prior rental history.)
In the instant proceeding, the only vacancy leases since
1975 were the December 15, 1980 initial lease under the 421a
program and the vacancy lease of former tenant Raskin, commencing
February 15, 1982. The 1980 lease rent was determined pursuant
to the regulations of the Housing Preservation and Development
Department of the City of New York (HPD) and therefore did not
include any vacancy allowance pursuant to a Rent Guidelines
Order. The 1982 vacancy lease rent was $835.00, being a $25.00
or approximately 3.1%, increase over the prior rent of $810.00.
Since the then applicable Guidelines Order 13 allowed a 10%
Guidelines increase, plus a 15% vacancy allowance, it is clear
that the owner did not charge any vacancy allowance. [Guidelines
Order 13 defines the vacancy allowances as a 15% increment over
and above the allowable Guidelines increase. Accordingly, the
actual 3.1% increase taken can not be seen as even a partial
imposition of a vacancy allowance.]
Therefore, the attached chart uses a 15% vacancy allowance
under Guidelines Order 15. As shown on the chart, once the
Section 421a increases and the 15% vacancy allowance are taken
into consideration, there was in fact no overcharge up to May 31,
1986, the computation date of the Administrator's Order.
If the owner has already complied with the Administrator's
Order and, as a result of the instant determination, there are
arrears due to the owner from the tenant, the owner is hereby
directed to allow the tenant to pay off the arrears in thirty-six
equal monthly installments during the next thirty-six months.
Should the tenant vacate after the issuance of this Order, all
arrears are due immediately.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be,
and the same hereby is, granted, and, that the order of the Rent
Administrator be, and the same hereby is, modified in accordance
with the Order and Opinion to show that there was no overcharge.
ISSUED
ELLIOT SANDER
Deputy Commissioner
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