BC 110231 RO
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.: BC 110231 RO
NATHAN KATZ REALTY COMPANY,
DRO DOCKET NO.: 13155,
TENANT'S ELEODORA CORTEZ
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On March 12, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
February 6, 1987, by the Rent Administrator, 10 Columbus Circle,
New York, New York concerning housing accommodations known as
Apartment 3C, 47-06 46th Street, Woodside, New York wherein the
Rent Administrator determined, in relevant part, that the
tenant's rent exceeded the fair market value and ordered a refund
of $6,365.86 in excess rent 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 commenced this proceeding on July 31, 1984 by filing a
timely challenge to the owner's initial registration of the
subject apartment, in part based on the allegation that her
registered rent constituted an overcharge.
In answer to the complaint, the owner stated that the tenant was
the first stabilized tenant after vacancy decontrol in 1982.
The owner was unable was unable to provide proof that the tenant
had been served with a DC-2 Notice, advising her of the right to
file a Fair Market Rent Appeal (FMRA). The owner also stated
that the prior owner had set the tenant's initial rent.
Accordingly, the overcharge complaint was processed as a FMRA.
Since the owner was unable to submit the requested data to
establish a comparable rent, the Administrator used Special
Guidelines Order Number 14, the 1982 Maximum Base Rent (MBR), and
the 1982 Fuel Cost Adjustment to establish the fair market rent.
The prior owner, Bliss Towers, was not served with the tenant's
complaint nor named in the Administrator's Order.
BC 110231 RO
In this petition, the owner contends that the Rent
Administrator's Order is incorrect and should be modified because
there was never an intentional overcharge by the petitioner who
had merely added lawful Guidelines increases to the rent set by
the prior owner. In addition, the owner contends that $1,478.52
of the excess rent had been collected by the prior owner before
the petitioner acquired the subject building on July 29,
1983. Accordingly, the owner asserts that this portion of the
excess rent should not be the obligation of the petitioner.
In addition, the owner asserts that it had complied with all
requests for comparability data. The owner lists the current
rents of other apartments in the tenant's line to show
comparability and attaches a 1974-1975 rent roll.
In answer to this petition, the tenant contends that the order
should be upheld because since her complaint was filed after
April 1, 1984 the current owner is responsible for all
"overcharges." In addition, the tenant requests that the order
be amended to show excess rent collected subsequent to October
31, 1985, the computation date of the Administrator's Order.
The Commissioner is of the opinion that this petition should be
granted in part.
The owner is correct that rent in excess of the fair market rent
collected by a prior owner is not the responsibility of the
current owner. See Section 2522.3(d) of the Rent Stabilization
Code which allows a tenant to deduct such excess rent from the
current owner only "to the extent the present owner is liable for
all or any part of the refund."
The tenant is apparently relying on Code Section 2526.1(f) which
holds a current owner liable for all overcharges collected by a
prior owner when the overcharge complaint is filed on or after
April 1, 1984. However, Section 2526.1(g) explicitly excludes
FMRA's from the provisions of Section 2526.1. Even though the
tenant stated her objection as an overcharge, the Administrator
properly processed it as a FMRA since the tenant was the first
stabilized tenant. [Had the objection been processed as an
overcharge none would have been found since the tenant's initial
rent would have been the base rent and assumed to be lawful.]
Accordingly, the Administrator's Order is hereby modified to
reduce the excess rent for which the petitioner is liable by
$1,478.52 to a new total of $4,887.34, including excess security.
The other contentions of the petitioner are without merit.
Excess rent must be refunded regardless of the owner's intention
or lack thereof. Furthermore, the record shows that on August
22, 1986, the petitioner was sent an RTP-22(8/85) form requesting
full comparability data.
In the owner's September 10, 1986 response only two leases for
allegedly comparable apartments were submitted, as opposed to
either the information regarding 1971-1974 rents represented on
Schedule A attached to the request or complete rental histories
for all apartments in the subject line. In short, the petitioner
BC 110231 RO
did not submit even a significant portion of the information
requested. Furthermore, the owner was unable to prove that a DC
2 Notice had been served on the tenant. Accordingly, the
Administrator correctly used the Special Guideline to determine
the Fair Market Rent. These deficiencies have in no way been
corrected on appeal.
The tenant's request that the Administrator's Order be updated
must be denied. An administrative appeal is not a de novo
procedure. The Administrator established the November 1, 1983 -
October 31, 1985 rent as $278.97. (The record shows that the
tenant failed to comply with a request to submit subsequent
leases to the Administrator.) Under the decision herein, this
remains the lawful stabilized rent for that period and it can be
increased only by Guidelines increases or other lawful rent
This Order is without prejudice to the tenant's right to proceed
against the prior owner in a Court of competent jurisdiction.
However, the Commissioner did not herein direct the prior owner
to refund the excess rent it collected since that owner was never
a party to these proceedings.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, 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.