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

          APPEAL OF                               DOCKET  NO.  ARL  12577  L
                                              :         DISTRICT        RENT
                                                 ADMINISTRATOR'S DOCKET
             THIRD   AVENUE   ASSOCIATES               NO.   L   3117627   R
                                                 TENANT: Barry Weintraub
                                 PETITIONER   :  


               On August 12, 1986, the above-named petitioner-owner  filed a 
          petition for administrative review of an order issued on July  15,
          1986  by  a  District  Rent   Administrator   concerning   housing
          accommodations known as Apartment No. 16G, 111 Third  Avenue,  New
          York, New York,  wherein  the  Administrator  determined  that  an
          overcharge had occurred.   

               The Commissioner has reviewed all  of  the  evidence  in  the
          record and has carefully considered that  portion  of  the  record
          concerning the issues raised in the petition for review.  

               This proceeding was commenced on  March  25,  1984  upon  the
          filing of a general complaint of rent  overcharge  by  the  tenant
          with the former New York City Conciliation and Appeals Board.  The 
          tenant stated that he had not been presented a lease  history  and
          requested a rent review.

               On April 1, 1984, responsibility for  the  administration  of
          rent stabilization in New York City was  transferred  to  the  New
          York State Division of Housing and Community Renewal (DHCR).

               On  May  18,  1984,  the  petitioner  was  notified  that  an
          overcharge complaint had been filed.  On November 21, 1984, DHCR 
          sent a copy of the  tenant's  complaint  to  the  petitioner  with
          instructions to file an answer within twenty days, and  to  submit
          leases from the base date to  show  the  lawfulness  of  the  rent
          charged.   DHCR  sent  a  "final  notice"  correspondence  to  the
          petitioner on March 19, 1986 to allow it fifteen  days  to  submit
          the rent history  documentation  previously  requested.   In  this
          final notice the petitioner was  advised  of  the  procedures  the
          Administrator would employ upon  noncompliance  and  the  possible
          imposition of treble damages.  

               No answer was received from the petitioner.

          ADM. REVIEW DOCKET NO. ARL 12577 L
               In the order issued  on  July  15,  1986,  the  Administrator
          found that the petitioner  had  defaulted  on  its  obligation  to
          provide complete copies of leases or rent records  from  the  base
          date pursuant to Section 42A of the former Code.   Therefore,  the
          Administrator established the legal regulated  rent  according  to
          the default method  authorized  under  Section  42A.   The  lawful
          stabilization rent was established to be $268.75 as of  April  29,
          1984 through April 28, 1985 and the owner was directed  to  refund
          $23,871.70 in overcharges through April 28, 1985 including  treble
          damages from April 1, 1984. 

               In its petition  for  administrative  review  the  petitioner
          alleges  that  it  was  unable,  until  recently,  to  obtain  the
          previous leases from a prior owner.  It further alleges  collusion
          between the tenant and the prior owner in that they  conspired  to
          prevent the petitioner  from  timely  compiling  a  complete  rent

               On November 5, 1986,  the  current  owner  (111  Realty  Co.)
          submitted an "answer" to the tenant's original complaint under the 
          District Rent Administrator's docket number (L 3117627  R).   This
          "answer"  contained  a  complete  lease  history.   Further,   the
          current owner also requested allocation of overcharges noting that 
          it had  acquired  ownership  on  August  6,  1985.   Finally,  the
          current owner alleged that treble damages should not  be  assessed
          because there was no showing of  willfulness,  the  Code  made  no
          provision for treble damages, and  the  current  owner  was  never
          served with notice of possible treble damages.    

               After careful  consideration,  the  Commissioner  is  of  the
          opinion that this petition should be denied. 

               The scope of  administrative review is limited  to  facts  or
          evidence before an administrator.  While  the  petitioner  alleges
          that  it  recently  obtained  the  prior  leases,  it  offers   no
          explanation for its failure to respond in any way to the 
          Administrator's notices. The record contains  no  descriptions  of
          its earlier efforts to retrieve the leases, or of requests for  an
          extension  of  time  in  which   to   respond.    Therefore,   the
          Commissioner will not accept the submissions of the petitioner  on

               Further, the  petitioner-owner's  allegation  that  collusion
          between a prior owner and the tenant prevented the petitioner from 
          compiling a lease history in a timely manner  is  unsubstantiated.
          The   petitioner   presents   no   evidence    or    corroborative
          documentation to sustain this claim.

               It  is  a  well-established  DHCR  principle  that  upon  the
          purchase of a property a new owner "steps into the shoes"  of  the
          prior owner.  Upon purchase of  a  property  containing  regulated
          rental units the  new  owner  has  an  obligation  to  investigate
          outstanding complaints against  a  prior  owner.   Therefore,  the

          ADM. REVIEW DOCKET NO. ARL 12577 L
          current  owner  should  have  known  of  the  pendency  of   these

               Accordingly,  in  the  absence  of  a  timely  petition   for
          administrative review filed by the current owner, the Commissioner 
          will not address the issues raised by the  current  owner  in  its
          untimely "answer" to the tenant's original complaint.  

               However, the Commissioner notes  that  consideration  of  the
          issues  raised  by  the  current  owner  would  not   change   the
          determination made in this  order  and  opinion.   First,  Section
          2526.1(a)(4) of the current Rent Stabilization Code provides  that
          treble damages may be assessed on post April 1,  1984  overcharges
          even  if  the  complaint  was  filed   before   April   1,   1984.
          Accordingly, the current owner's contention that  the  failure  of
          the old Code to mention treble damages prohibits their  assessment
          is without merit.  Second, the assessment of treble  damages  does
          not require a showing of  willfulness.   Instead,  the  burden  of
          proof is upon the owner, who must establish  that  the  overcharge
          was not willful.  The record contains no such  demonstration,  and
          the owners have failed to meet their burden of proof.   Third,  no
          notices were sent to any owner by the District Rent  Administrator
          in this case after March 19, 1986, and the current owner  did  not
          register his ownership with the agency until April  1,  1986.   In
          the absence of any additional correspondence, DHCR  was  under  no
          obligation to notify the  current  owner  of  the  possibility  of
          treble damages.      

               Finally, Section 2526.1(f) of the current Rent  Stabilization
          Code provides in pertinent part that: 

                    1) 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 owners; and

                    2) for overcharges collected on or after April
                       1, 1984, a current owner shall be responsible
                       for all overcharge penalties, including        
                       penalties based upon overcharges collected by
                       any prior owner.

               The current owner acquired title to the subject  premises  in
          August, 1985.  Pursuant to Section 2526.1(f) the petitioner-owner, 
          is responsible for those overcharges occurring prior to  April  1,
          1984 which it collected from the tenant.   The  current  owner  is
          jointly and severally responsible with  the  petitioner-owner  for
          overcharges occurring from April 1, 1984  until  the  prior  owner
          sold the subject premises to the current owner.  The current owner 
          is individually responsible for overcharges occurring  after  that

          ADM. REVIEW DOCKET NO. ARL 12577 L

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

               ORDERED, that this petition  be,  and  the  same  hereby  is,
          denied, and the Administrator's order be and the same hereby is, 
          affirmed; and it is 

               FURTHER ORDERED, that this order may, upon the expiration  of
          the period in which the owners may institute a proceeding pursuant 
          to Article Seventy-Eight of the Civil Practice Law and Rules, be 
          filed and enforced by the tenant,  who  has  vacated  the  subject
          premises, in the same manner as a judgment in the amount of 
          $5,039.38 as against Third Avenue  Associates  and  $18,832.32  as
          against 111 Realty Co and  Third  Avenue  Associates  jointly  and

          NOTE:  This order and opinion is without prejudice to  the  rights
          of the current owner to seek  recoupment  from  prior  owners  for
          their share of the overcharges refunded to the tenant in  a  court
          of competent jurisdiction.


                                          ELLIOT SANDER
                                          Deputy Commissioner


          ADM. REVIEW DOCKET NO. ARL 12577 L


TenantNet Home | TenantNet Forum | New York Tenant Information
DHCR Information | DHCR Decisions | Housing Court Decisions | New York Rent Laws
Disclaimer | Privacy Policy | Contact Us

Subscribe to our Mailing List!
Your Email      Full Name