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. BC 510313 RO
: DRO DOCKET NO. ZU-4267-R
FRANCIS GREENBERGER TENANT: RUBBY VILLADIEGO
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART
On March 17, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
February 10, 1987, by the Rent Administrator, Gertz Plaza, Jamaica,
New York, concerning the housing accommodations known as 247
Wadsworth Avenue, New York, New York, Apartment No. 2J, wherein the
Rent Administrator determined the fair market rent
pursuant to an apartment comparability study and the special fair
market rent guideline promulgated by the New York City Rent
Guidelines Board for use in calculating fair market rent appeals.
On May 22, 1987, an Order and Opinion Dismissing the Petition was
issued on the basis that the petition was not timely filed. ON
July 22, 1987, an Order and Opinion Reopening the Proceeding was
issued on the basis that the petition had, in fact, been timely
filed.
The Administrative Appeal is being determined pursuant to the
provisions of Sections 2522.3 and 2526.1 of the Rent Stabilization
Code.
The issue herein is whether the Rent Administrator's order
was warranted.
The Commissioner has reviewed all of the evidence in the
record and has carefully considered that portion of the record
relevant to the issue raised by the administrative appeal.
This proceeding was originally commenced on October 10, 1985
by the filing of a rent overcharge complaint in which the tenant
questioned the fair market rent of the subject apartment. The
owner was served with a copy of the tenant's complaint and
afforded an opportunity to submit rental data for comparable
apartments. In response the owner submitted rental data for
several comparable apartments and indicated it first purchased the
subject premises on July 17, 1985.
BC 510313 RO
In Order Number ZU-4267-R, the Rent Administrator determined
the fair market rent of the subject apartment to be $374.43
effective February 1, 1985, the date of commencement of the
initial rent stabilized lease and found excess rent paid of
$3765.25 from February 1, 1985 through January 31, 1987.
In this petition, the owner contends in substance that the
amount of excess rent owed to the tenant should have been
apportioned between the owner and prior owner and that in addition
to the comparability data submitted by the owner, the
Administrator was required to consider rents generally prevailing
in the same area for substantially similar housing accommodations
in determining the fair market rent.
In answer to this petition, the tenant stated in substance
that the Rent Administrator's order was warranted.
The Commissioner is of the opinion that this petition should
be granted in part.
Section 2526.1 of the Rent Stabilization Code provides in
pertinent part that for overcharge complaints filed or 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 but that such
provisions shall not apply to fair market rent appeals. In
proceedings involving fair market rent appeals, where there has
been a transfer of ownership of a building, the policy of the
Conciliation and Appeals Board (the agency formerly charged with
enforcing the Rent Stabilization Law) adopted by the Division of
HOusing and Community Renewal provides that the obligation of a
new owner to refund excess rent is limited to such excess rent
collected by it and may not be extended to excess rent collected
by the prior owner in the absence of evidence of any collusion or
relationship between the new owner and prior owner. The
distinction between a fair market rent appeal and an overcharge
proceeding has been made because a fair market rent appeal
involves a tenant challenging the initial stabilized rent of an
apartment which has been decontrolled from the Rent Control Law.
If the tenant does not challenge such initial stabilized rent
within the required period, it becomes the initial legal regulated
rent upon which all future rent increases must be based. If the
tenant does timely challenge the initial rent, a determination may
be made that the tenant's rent exceeds the fair market rent for
the apartment. Such determination would result in a rent
adjustment and refund of excess rent to the tenant but is not
considered a rent overcharge within the intent and meaning of
Section 2526.1.
Based on the foregoing, the owner herein is responsible only
for the excess rent it actually collected - excess rent from
August 1, 1985 onwards - since there is no evidence of any
collusion or relationship between the owner and any prior owner.
BC 510313 RO
The total excess rent including excess security from August 1,
1985 through January 31, 1987 amounts to $2860.83.
The Commissioner notes that the prior owner was not served
with a copy of the tenant's fair market rent appeal nor afforded
an opportunity to file an answer to such appeal. This order is
issued without prejudice to the tenant's right, if any, to proceed
against the prior owner.
With regard to the owner's contention that the Administrator
was required to consider rents generally prevailing in the same
area for substantially similar housing accommodations in
determining the fair market rent, the Commissioner notes that
pursuant to Section 2522.3(e) and (f) of the Rent Stabilization
Code, it is the owner's responsibility to provide the
comparability data for use in determining the fair market rent.
In this case, the owner was given an opportunity to submit and in
fact did submit usable comparability data. The Rent Administrator
properly used such data in determining the fair market rent of the
subject apartment.
If the owner has already complied with the Administrator's
order and there are arrears due to the owner as a result of the
instant determination, the tenant is permitted to pay off the
arrears in twelve equal monthly installments. Should the tenant
vacate after issuance of this order or already have vacated, said
arrears shall be payable immediately.
If the owner does not take appropriate action to comply
within 60 days from the date of this order, the tenant may credit
the excess rent against the next month(s) rent until fully offset.
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 in part, and, that the order of the
Rent Administrator be, and the same hereby is, modified to show
that the owner herein owes excess rent to the tenant only from the
time it began collecting rent for the subject apartment - August
1, 1985. The total amount of the excess rent from August 1, 1985
through January 31, 1987 is $2860.83.
ISSUED
ELLIOT SANDER
Deputy Commissioner
ADMINISTRATIVE REVIEW BUREAU
COVERING MEMORANDUM
ARB Docket No.: BC 510313 RO
DRO Docket No/Order No.: ZU-4267-R
Tenant(s): Rubby Villadiego
Owner: Francis Greenberger
Code Section: 2522.3 and 2526.1 of RSC
Premises: 247 Wadsworth Avenue, New York, New York, Apt. 2J
Order and Opinion Granting Petition in Part
Petition granted in part to apportion excess rent paid
between owner and prior owner. However Administrator's
determination of fair market rent was correct.
APPROVED:
Processing Attorney:
Supervising Attorney:
Director:
Deputy Commissioner:
Mailed copies of Order and Determination to:
Tenant(s)
Owner
Tenant's Atty
Owner's Atty
Date: : by
signature
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