BD 410140-RT, et al.
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 S.J.R. 6113
IN THE MATTER OF THE ADMINISTRATIVE
APPEALS OF ADMINISTRATIVE
REVIEW
DOCKET NOS.:
BD 410140 RT
JAN SHALOW BC 410355 RT
BRISTOL EAST COMPANY, BC 410490 RO
DISTRICT RENT
ADMINISTRATOR'S DOCKET
NO.: 00036787
PETITIONERS
----------------------------------x
ORDER AND OPINION DENYING OWNER'S PETITION FOR ADMINISTRATIVE
REVIEW AND GRANTING TENANT'S PETITIONS FOR ADMINISTRATIVE REVIEW
IN PART
The Commissioner has consolidated these proceedings as they
contain common issues of law and fact.
The above named petitioners filed timely Petitions for
Administrative Review against an order of the Rent Administrator
issued February 18, 1987. The Commissioner notes that two
iden-tical petitions filed by the tenant were erroneously
assigned separate docket numbers which are consolidated herein.
The order here under review concerned housing accommodations
known as Apt. 5-D located at 310 East 65th Street, New York, N.Y.
wherein the Administrator found that the tenant had been
overcharged and computed the total overcharge in the amount of
$4166.63.
The Commissioner has reviewed the record and carefully
considered that portion relevant to the issues raised by these
appeals.
The tenant commenced this proceeding on October 24, 1984 by
filing an objection to the 1984 Apartment Rent Registration
wherein she stated that her first lease for the subject apartment
began on July 1, 1984 at a monthly rental of $678. She also
claimed that she was residing in the apartment on April 1, 1984
at a rent of $600 per month, that, in addition to the "general
overcharge", the owner was overcharging her for certain appli-
ances it had installed, that the room count for the apartment was
incorrect and that the owner failed to include gas for cooking on
the registration statement.
The owner was served with a copy of the objection and
afforded an opportunity to reply. The owner filed an answer on
December 24, 1986, through counsel. Copies of all leases from
the base date were submitted. The response raised the following
points regarding the tenant's assertions in the objection:
1.A DHCR order bearing Docket No. L 000741-R
established that the tenant's legal rent on
April 1, 1984 was $600 per month.
2.The owner reduced the tenant's rent to $593.75
on February 1, 1985 and refunded $639.75 in excess
rent collected.
3.Petitioner Shalow was a subtenant in the
apart-ment from October 15, 1977 until July 1,
1984 when she signed a two year lease. From
October 15, 1977 until October 31, 1980 Shalow
resided in the apartment without the consent of
the owner. The owner commenced a dispossess action
and the tenant commenced a declaratory judgment
action. These proceedings were settled when a
stipulation was entered into between the owner and
the prime tenant (Roni Wecker) which allowed
Shalow to remain as a legal subtenant until
October 31, 1982. She was also permitted to
remain in the apartment for one additional year.
Petitioner Shalow did, in fact, continue to reside
in the apartment through October 31, 1983. A new 2
year lease was then entered into between the owner
and a different prime tenant (Lita Chadrjian) for
the period from November 1, 1983 to October 31,
1985. Petitioner Shalow and Chadrjian entered into
a sublet agreement on November 23, 1983 wherein
Shalow was permitted to remain in the apartment
for three months. Petitioner Shalow did not vacate
after the expiration of the three month period and
signed her own two year lease for a period
com-mencing July 1, 1984. The owner states that
Shalow consented to the installation of a new
refriger-ator, venetian blinds and an air
conditioner.
The owner also filed answers to the objection to the room
count as well as Petitioner Shalow's statement about cooking gas
being a required service. The owner submitted a floor plan for
the apartment and stated that the room count had no bearing on
the legal rent for the apartment. The owner further stated that
a charge for cooking gas is included in the rent as the owner
pays for gas pursuant to a master meter.
Petitioner Shalow filed a reply to the owner's answer on
January 7, 1985. While restating much of the history of this
proceeding that the owner had set forth in its answer, Shalow
raised the issue of an illusory prime tenancy by Lita Chadrjian.
Shalow stated that the lease signed by Chadrjian and the owner
was "a pure illusory lease...inasmuch as Lita Chadrjian was and
still is the wife of the general partner of Bristol East Company,
Mr. Jack Chadrjian."
Petitioner Shalow requested the Administrator to void
Chadrjian's lease and deem her the prime tenant of the subject
apartment as of November 1, 1983. She also stated that the owner
was "willfully and knowingly" overcharging her.
The Administrator issued the order here under review on
February 18, 1987. The Administrator found that the owner was
providing cooking gas for the subject apartment. Based on the
evidence submitted, the Administrator ruled that the subject
apartment contained one room and the registration statement was
corrected to so reflect. The Administrator did note that the
room count had no bearing on the rent in effect on April 1, 1984.
With respect to the overcharge portion of the objection, the
Administrator found an overcharge existed for the period from
July 1, 1984 to June 30, 1986. The overcharge was computed at
$3678.00. The Administrator then added interest and excess
security resulting in a total overcharge of $4166.63. Both
parties have appealed the Administrator's order.
The tenant has raised the following objections to the
Administrator's order:
1.The Administrator found that the base rent was
$340 per month. That finding is erroneous because
the tenant established in documents submitted in
another proceeding (Docket No. L 000741-R) that
the base rent is $286.00 per month.
2.Rent Guideline Board Order #12 was erroneously
applied inasmuch as a 5% vacancy allowance was
granted to the owner for the lease beginning
November 1, 1980 when no actual change in tenancy
occurred.
3.Lita Chadrjian was an illusory prime tenant and
the Administrator's order should be modified to
reflect the fact that Shalow was the prime tenant
beginning November 1, 1983.
4.By reason of the foregoing, the second Guideline
15 increase with the two year vacancy allowance
should never have been taken. Additionally, the
$38.03 the Administrator allowed for installation
of the refrigerator, air conditioner and blinds
was excessive.
5.The overcharge was willful and the Administrator
should have so found.
6.Treble damages and attorney's fees should have
been awarded.
The owner's petition sets forth three grounds for
modification of the Administrator's order:
1.The alleged reduction of the rent on November 1,
1983 and the refunding of $639.75 in excess rent
collected.
2.In Docket No. L 000741-R the April 1, 1984 rent
was established at $600 per month.
3.The Administrator's order overlooks the
agreement to sublet made between the owner and the
tenants of record pursuant to a stipulation
entered in open court which gave the owner the
right to charge the rent charged for the period
from November 1, 1980 through October 31, 1982.
The owner also filed a response to the tenant's petition
wherein it denied any willful intent to overcharge the tenant and
asserted that the tenant should seek redress against the tenant's
of record of the apartment for any overcharges.
The Commissioner has carefully considered the evidence in
the record and is of the opinion that the tenant's petition
should be granted in part and the owner's petition should be
denied.
The Commissioner initially notes that the parties have
raised the issue of the effect of the Administrator's decision in
Docket No. L 000741-R in which the April 1, 1984 rent of the
subject apartment was established at $600 per month. The
Commis-sioner further notes that, on December 7, 1990, the
Administrator issued an order (Docket No. CI 410032-RP) which
revoked the order cited by both parties in these appeals based on
a finding that the tenant had filed a timely challenge to the
1984 registration statement in this proceeding. Therefore, the
portion of the petitions of both parties which relies on the
revoked order as a ground for modification of the order here
under review is denied.
However, the evidence of record supports the tenant's
asser-tion that the April 1, 1980 base rent was $286.00 rather
than $340.00. The owner's answer to the complaint in which the
changes in rent since the base rent date were indicated listed
the rent for the lease term from October 15, 1977 to October 31,
1980 as $286.00 per month with an explanation that the $340.00
stated in the lease was rolled back "pursuant to agreement of
parties".
The owner also submitted a copy of a letter, dated January
30, 1978 from the Rent Stabilization Association to the owner
demanding copies of the May 31, 1968 lease and all subsequent and
renewal leases. The letter bears handwritten notations at the
bottom indicating that the rent for Roni Wecker's vacancy lease
was being corrected to $286.00, as the correct increase above the
prior tenant's rent of $245.50, and $243.00 was being credited to
Ms. Wecker for 4.5 months overcharges.
A revised rent calculation chart is attached to an made a
part of this order, using $286.00 as the April 1, 1980 base rent.
Petitioner Shalow states that the 5% vacancy allowance
allowed by the Administrator for the two year lease term begin-
ning November 1, 1980 was erroneous. The tenants of record are
alleged to be the same ones residing in the apartment on October
31, 1980. A review of the evidence reveals that the tenant of
record on October 31, 1980 was one Roni Wecker, and the tenants
of record for the lease commencing November 1, 1980 were Howard
and Roni Cowan, and that Roni Cowan was formerly Roni Wecker
before her marriage to Howard Cowan. The addition of a spouse's
name to a lease does not warrant a vacancy allowance.
Petitioner Shalow also contends, inter alia, that the $38.03
charge for the installation of the air conditioner, blinds and
refrigerator was excessive. The owner, in answer to the tenant's
objection, produced documentation substantiating the cost of the
installations. The Administrator's calculation of $38.03
represented 1/40 of the total cost as allowed by the Rent Sta-
bilization Code (see 9 NYCRR 2522.4 [a][1],[4]). This amount was
then added to the allowable increase pursuant to Rent Guidelines
Board Order #15. The Administrator utilized the correct pro-
cedure. Petitioner Shalow merely states that the $38.03 is
"excessive". Without any evidence to rebut the owner's
documenta-tion, the tenant's contention must be rejected. The
Commissioner affirms that portion of the order here under review
which assessed the $38.03 charge for the installations.
The Commissioner also finds that the November 1, 1983 lease
with Lita Chadrjian is void and should not have been considered
by the Administrator in determining the complaining tenant's
lawful rent. The purported tenant never took occupancy of the
subject apartment which was continuously occupied during this
time by the complainant. The sublet agreement between the prime
tenant and the complainant is also void since it was for a three
month term and leases for three months or less are not recognized
for the purpose of determining a lawful stabilized rent. The
complaining tenant should be deemed the prime tenant as of
November 1, 1983 and a second vacancy allowance should not be
added when the complainant finally signed a lease in her own name
for the term commencing July 1, 1984. This adjustment has also
been made in the Rent Calculation Chart accompanying this order.
The owner's argument that the rent stated in the stipula-
tion settling the court proceeding with the prior prime tenants
should be used to determine the lawful rent in this proceeding is
without merit. Since the complainant herein was not a party to
the court proceeding, the settlement of that action is not
binding on her. Moreover, according to the policies of the former
Conciliation and Appeals Board (CAB), the owner was required to
charge a stabilized rent to the former prime tenants, even though
they admitted not using the apartment as their primary residence.
The alleged rent adjustment and refund made by the owner is
unsubstantiated by rent ledgers or cancelled checks or any other
documentation and therefore cannot be considered by the Commis-
sioner as an offset for the refund ordered herein.
Finally, the Commissioner finds that the owner has not
established by a preponderance of the evidence that the
over-charge was not willful and, in accordance with Section
2526.1(a)(1) of the code, treble damages are warranted. The
overcharges are the result of the use of an incorrect 1980 base
rent when the owner knew the rent had been adjusted as a result
of another proceeding, the belief that the rent for non-primary
residents is not subject to stabilization when established policy
at the time said otherwise, and basing the complainant's rent on
the lease for an illusory tenant who never took occupancy. These
indicate willfulness for which treble damages must be imposed.
The total overcharge is now computed at $21,987.82 including
treble damages and excess security.
It is noted that the overcharges determined herein concern
those charged the complaining tenant by the owner. Any
additional refunds due to the tenant by the former prime tenants
are not involved in this proceeding.
The tenant may enforce this order as a judgment or may
credit up to 20% of the overcharge each month until the
over-charge is fully credited.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that the owner's petition be, and the same hereby
is, denied, that the tenant's petition be, and the same hereby
is, granted in part, and that the Commissioner's order be, and
the same hereby is, modified in accordance with this Order and
Opinion.
ISSUED:
JOSEPH D'AGOSTA
Deputy Commissioner
RENT CALCULATION CHART
TENANTS : Wecker/ H. & R. Cowan /Shalow Rent Overcharge (through 06/30/86) = $ 21,727.62
PREMISES : 310 East 65th Street, N.Y., NY Excess Security = $ 260.20
APT. # : 5-D
TOTAL OVERCHARGE = $ 21,987.82
DOCKET # : BD 410140-RT ============
Pg. 1 of 2
================+======================+==============+=============+=====================================+=====================
(1) | (2) | (3) | (4) | (5) | (6) | (7)
| LEASE TERM | ACTUAL RENT | EFFECTIVE | | LAWFUL | OVERCHARGE
TENANT'S NAME | FROM TO | CHARGED | DATE OF | EXPLANATION | STABIL. | CALCULATION
| | | INCREASE(S) | | RENT /1 |
================+===========+==========+==============+=============+==========================+==========+=====================
| | | | | | |
Wecker | | | | | Base Rent | $ 286.00 | - 0 -
| | | | | | |
----------------+-----------+----------+--------------+-------------+--------------------------+----------+---------------------
| | | | | | |
| | | | | Guideline 12: Base rent | |
H. & R. Cowan | 11/01/80 | 10/31/82 | $ 400.00 | | of $286.00 + 14% increase| $ 326.04 | - 0 -
| | | | | for 2 year lease. | |
| | | | | | |
----------------+-----------+----------+--------------+-------------+--------------------------+----------+---------------------
| | | | | | |
| | | | | Guideline 14: 09/30/82 | |
H. & R. Cowan | 11/01/82 | 10/31/83 | $ 475.00 | | rent of $326.04 + 4% in- | $ 339.08 | - 0 -
| | | | | crease for 1 year lease. | |
| | | | | | |
---------------+-----------+----------+--------------+-------------+--------------------------+----------+---------------------
| | | | | | |
| | | | | Guideline 15: 09/30/83 | | $ 220.23 per mo.
Shalow | 11/01/83 | 03/31/84 | $ 600.00 | | rent of $339.08 + 7% in- | $ 379.77 | x 5 mos.
| | | | | crease for 2 year lease | | $ 1,011.15
| | | | | + 5% vacancy allowance. | |
| | | | | | |
----------------+-----------+----------+--------------+-------------+--------------------------+----------+---------------------
/1 Where the actual rent charged is less than the rent with maximum permitted increases, the lawful stabilization rent is
limited to the rent charged.
RENT CALCULATION CHART
TENANTS : Wecker/ H. & R. Cowan/ Shalow Rent Overcharge (through 06/30/86) = $ 21,727.62
PREMISES : 310 East 65th Street, N.Y., NY Excess Security = $ 260.20
APT. # : 5-D
TOTAL OVERCHARGE = $ 21,987.82
DOCKET # : BD 410140-RT ============
Pg. 2 of 2
================+======================+==============+=============+=====================================+=====================
(1) | (2) | (3) | (4) | (5) | (6) | (7)
| LEASE TERM | ACTUAL RENT | EFFECTIVE | | LAWFUL | OVERCHARGE
TENANT'S NAME | FROM TO | CHARGED | DATE OF | EXPLANATION | STABIL. | CALCULATION
| | | INCREASE(S) | | RENT /1 |
================+===========+==========+==============+=============+==========================+==========+=====================
| | | | | | | $ 220.23 per mo.
| | | | | | | x 3 mos.
Shalow | 04/01/84 | 06/30/84 | $ 600.00 | | Treble damages for all | $ 379.77 | 660.69
| | | | | post 04/01/84 overcharges| | x 3
| | | | | | | $ 1,982.07
| | | | | | |
----------------+-----------+----------+--------------+-------------+--------------------------+----------+---------------------
| | | | | | |
| | | | | Guideline 15: 09/30/83 | | $ 260.20 per mo.
Shalow | 07/01/84 | 06/30/86 | $ 678.00 | | rent of $339.08 + 7% in- | $ 417.80 | x 24 mos.
| | | | | crease for 2 year lease | | $ 6,244.80
| | | | | + 5% vacancy allowance + | | x 3
| | | | | $38.03 for 20 C(1) in- | | $18,734.40
| | | | | crease | |
---------------+-----------+----------+--------------+-------------+--------------------------+----------+---------------------
/1 Where the actual rent charged is less than the rent with maximum permitted increases, the lawful stabilization rent is
limited to the rent charged.
|
