ARL 11626-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 NOS.:
ARL 11626-L;
NICK BRUSCO,
DRO DOCKET NOS.:
L 3112108-R
PETITIONER TENANT: SAMANTHA FINCH
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
AND MODIFYING ADMINISTRATOR'S ORDER
On July 9, 1986 the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on June 10,
1986 by the Rent Administrator, 10 Columbus Circle,
New York, New York, concerning housing accommodations known as
Apartment A 115 West 74th Street, New York, New York, wherein the
Administrator established the legal regulated rent and
directed the refund of rent overcharges.
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
over-charge and fair market rent proceedings provide that
determina-tion of these matters be based upon the law or code
provisions in effect on March 31, 1984. Therefore, unless
otherwise indi-cated, 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 correctly
determined the legal stabilized rent of the subject apartment.
The instant proceeding stems from a complaint of specific rent
overcharge wherein the tenant contends, in substance, that her
paid tenancy of the apartment commenced in September 1983; and
that the owner was not entitled to a vacancy allowance under Rent
Order Guideline No. 15 (applicable to new tenancies commencing
October 1, 1983). The tenant submitted various documentation
including copies of utility and moving bills, showing that she
took occupancy of the subject apartment prior to October 1, 1983.
A copy of the complaint was sent to the owner on September 20,
1984. In response thereto the owner stated that he had no record
of the tenant having taken occupancy of the subject apartment
prior to the October 1, 1983 commencement date of the tenant's
lease; and that the tenant was actually undercharged. Included
with the answer was a rental history and various leases for the
subject apartment including the lease executed by the complaining
tenant on September 9, 1983.
The Commissioner notes that during the pendency of the instant
proceeding (L-311,2108-R) the tenant filed a second complaint of
rent overcharge (assigned Docket No. L-005164-R). In response
thereto the owner stated that he did not receive any rent from
the complaining tenant prior to October 1, 1983; and that the
tenant's check, made payable to cash for $311.00 and marked "1/2
mo. Sept. rent" was never given to him. Said answer was not
made part of the instant proceeding.
Finding the owner's initial answer unresponsive to the complaint,
the Rent Administrator, on June 10, 1986, issued the order
appealed herein determining, in essence, that the owner was not
entitled to a vacancy allowance under Guideline No. 15, estab-
lishing the legal regulated rent commencing September 1, 1983
under Guideline No. 14, and directing the refund of rent over-
charges and totaling $2,574.86, including interest for the period
since April 1, 1984.
(The Commissioner notes that on June 3, 1987 the proceeding under
Docket No. L-005164-R was terminated on grounds that the issue
raised by the tenant's complaint was resolved by the Adminis-
trator's June 10, 1986 order appealed herein.)
In this Petition for Administrative Review the owner contends, in
substance, that his answer was responsive to the tenant's com-
plaint; that the tenant has not submitted proof she actually paid
"rent" during September 1983; that the tenant took advantage of
his largess when she was permitted to prepare for her occupancy
of the apartment which was to commence October 1, 1983; that the
tenant "created a record tenancy" prior to October 1, 1983 in
order to avoid paying a 15% vacancy allowance, effective as of
said date; that while the tenant cashed a check for one-half of
the monthly rental, no proof has been submitted that this money
was accepted by the petitioner/owner; that without proof of
payment of rent and its acceptance by the petitioner the tenant
may not claim the existence of a "deemed lease"; and that since
the tenant had no lease prior to October 1, 1983, Rent Guideline
Order No. 15, applicable to leases commencing between October 1,
1983 and September 30, 1984 should govern the situation.
In answer to the petition the tenant refers to the documentation
previously submitted and states, among other things, that her
check for September rent was returned by Joe Brusco who requested
payment in cash as the owner sought to avoid a problem with
another individual who had been promised the apartment; and that
she knew this story to be true because she received a note (copy
submitted) from this individual requesting to arrange for the
removal of his belongings from the apartment. In addition, the
tenant requested the imposition of treble damages and attorney's
fees.
A hearing was held on April 4, 1991. The tenant appeared in
person and by counsel. The owner appeared solely by counsel. Two
witnesses appeared for the tenant.
The tenant testified, in substance, that she first saw the sub-
ject apartment on September 2, 1983 at which time she deposited
$610.00 by personnel check with the rental agent who informed her
that the existing tenant demanded $7,000.00 "key money" to
vacate; and that the agent (Gallagher) destroyed her check
(#1406) when she gave him the "key money", borrowed from her
friend (Jillein Leider), on September 6, 1983. That on September
9, 1983, at Gem Realty, Joe Brusco presented a lease, already
signed by Nick Brusco to commence October 1, 1983; that she was
never told she could live rent free during September 1983 and she
paid rent since the beginning of her occupancy; that on September
9, 1983 she initially wrote one check in the amount of $933.00
for Joe Brusco (No. 1415) to cover security ($622.00) and partial
September rent ($311.00); that Joe Brusco changed his mind and
requested two separate checks; that she "reluctantly" destroyed
check No. 1415 and wrote check No. 1416 for security and No. 1417
for partial September rent; and that Joe Brusco gave her the keys
to the subject apartment on September 9, 1983.
The tenant further testified that she was thereafter contacted by
Joe Brusco who requested she take back her check No. 1417 and
give him cash in lieu thereof; that Joe Brusco informed her the
subject apartment was originally promised to someone else and he
did not want a record of her tenancy via check No. 1417, which
said individual could use against the owner; that she gave
credence to this explanation because she had been contacted by a
Neil Feldman as the person slated to get the subject apartment
through a "misunderstanding with the landlord", and that said
individual wanted to make arrangements to remove his belongings
previously stored there as evidenced by a note from said indi-
vidual (Exhibit T-5).
The tenant further testified that she and Joe Brusco met on
September 21, 1983 at which time she gave him $311.00 in cash
which she had earlier withdrawn from the bank by check (No. 1432)
written for cash (Exhibit T-4) and Joe Brusco returned to
her check No. 1417, which check was destroyed; and that on that
day Joe Brusco removed all of Neil Feldman's belongings, except
for a sofa which she still has, so that said individual could
retrieve them from the landlord's office at his leisure.
Submitted by the tenant were various invoices, bills and utility
statements, checks, check register and "week at a glance" diary
(Exhibit T-16) to buttress her contention that she took occupancy
of the subject apartment and paid rent therefor during September
1983. On cross examination the tenant conceded that the lease
presented on September 9, 1983 provided for an October 1, 1983
commencement date; and that other than his possession of the
lease she did not see other documentation indicating that Joe
Brusco was empowered to act for Neil Brusco, the petitioner/-
/owner.
On redirect examination the tenant testified that Joe Brusco
works in the landlord's office located in the subject premises;
and that she has had contact with Joe Brusco on many occasions
both prior to renting and afterwards with regard to service
complaints. In response to questioning by the Administrative Law
Judge, the tenant stated that Joe Brusco is the son of Nick
Brusco to whom all rent checks have been made payable from the
inception of her tenancy.
Appearing on behalf of the tenant were two witnesses one of whom,
Leida Davis Cothbertson, testified that she helped her friend
move into the subject apartment on September 18, 1983; and that
as the result of conversation with the tenant she was aware her
friend paid $7,000.00 "key money" to obtain the apartment and a
partial rent payment for September 1983. Upon cross examination
she stated that such conversation took place between September 9
and September 18, 1983.
Jillian Leider testified that she lent the tenant $7,000.00 "key
money" so her friend could obtain the subject apartment; that she
was told by the tenant that the landlord was requesting some rent
in cash; and that she first saw the subject apartment on
September 11, 1983.
The Law Judge, in his report found the testimony of the tenant
and her witnesses to be credible and supported by meticulous
documentation, particularly in view of the failure of Neil Brusco
or Joe Brusco to appear in person on their own behalf; that the
record was replete with unrebutted testimony that Joe Brusco
acted as and was the agent for his father Nick Brusco through the
period in question; that Joe Brusco was an owner pursuant to
Section 2520.6(i) of the Code; and that Samantha Finch's paid
tenancy of the subject apartment began on
September 9, 1983, the date she paid rent and security to Joe
Brusco and he gave her the keys to the apartment.
After a careful consideration of the entire record, the Commis-
sioner is of the opinion that this petition should be denied.
Rent Guideline Order No. 15 provides for up to a 15% vacancy
allowance for new tenancies during the period from October 1,
1983 to September 30, 1984. No vacancy allowance is permitted
under Guideline Order No. 14 (covering the period October 1, 1982
- September 30, 1983). In view of the conflicting allegations of
the parties with respect to the payment and receipt of rent for
the month of September 1983, this matter was referred to the
Hearings Section to determine "whether the tenancy of Samantha
Finch commenced prior to October 1, 1983." Both the owner and
the tenant were specifically requested to appear in person and to
produce witnesses and documentation in support of their
respective positions.
The Law Judge, who heard the unrebutted testimony of the tenant
and the witnesses who appeared on her behalf and who observed
their demeanor, is best qualified to make a judgement as to their
credibility. The testimony given and the documentary evidence
submitted supports the tenant's contention that her paid tenancy
of the subject apartment commenced on September 9, 1983 when the
tenant paid and the owner accepted one-half months rent for the
month of September. The record indicates that the legal
regulated rent for the prior tenant was $514.48 per month; that
the Administrator properly reformed the current tenant's initial
lease and applied Guideline Order No. 14 (applicable to leases
commencing prior to October 1, 1983) and increased the legal
regulated rent to $550.49 per month as of September 1983 and
further increased same to $568.27 per month under Guideline Order
No. 17, as of October 1, 1985. However, as the tenant only paid
one-half months rent ($311.00) for September 1983, the total
overcharge is hereby reduced by $35.76 to $2,539.10, and that as
so modified said order is hereby affirmed.
Concerning the tenant's claim that the Administrator should have
awarded treble damages, the Commissioner finds that the tenant
may not raise this issue by means of her answer to the owner's
petition. In addition, legal fees may be awarded only when they
are requested and established as part of the Administrative
proceeding. The case cited by the tenant at the hearing, Sakraf
v. Emicke, Sup. Ct. April 11, 1988 in support of her request for
treble damages is distinguishable from the facts at hand in that
the Sakraf case involved a fraudulent document, a lease fabri-
cated by the owner to obtain rent increases substantially above
applicable guideline orders whereas the tenant's initial lease
was in all respects proper, and even provided for a rental less
than legally permissible, but for the fact that the owner
accepted payment of rent prior to the commencement of the lease
term.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Code, it is
ORDERED, that this petition be, and the same hereby is, denied;
that the order of the Rent Administrator be, and the same hereby
is, modified as hereinabove indicated; and it is
FURTHER ORDERED, that the tenant may file this order as a
judge-ment in the amount of $2,539.10 after the expiration of the
sixty (60) day period in which an Article 78 petition may be
filed or not in excess of 20% thereof per month may be offset
against any rent thereafter due the current owner.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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