ADM. REVIEW DOCKET NO. ARL 12577 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
------------------------------------X
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. ARL 12577 L
: DISTRICT RENT
ADMINISTRATOR'S DOCKET
THIRD AVENUE ASSOCIATES NO. L 3117627 R
TENANT: Barry Weintraub
PETITIONER :
------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
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
history.
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
appeal.
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
proceedings.
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
date.
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
severally.
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.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
ADM. REVIEW DOCKET NO. ARL 12577 L
|
