BD 410288 RO
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
APPEAL OF ADMINISTRATIVE REVIEW
DOCKET NO.: BD 410288-RO
GRANDMA-PA REALTY,
DRO DOCKET NOS.: L-3115139-R
CDR 29,397
TENANTS: CATHY WEINER AND
PETITIONER EUGENE NASAREWSKY
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On April 15, 1987 the above named petitioner-owner filed a
Petition for Administrative Review against an order issued on
March 11, 1987 by the District Rent Administrator, 10 Columbus
Circle, New York, New York concerning housing accommodations
known as Apartment 3A at 353 West 44th Street, New York, New
York wherein the District Rent Administrator determined that the
owner had overcharged the tenant.
The Commissioner notes that this proceeding was filed prior to
April 1, 1984. Sections 2526.1(a)(4) and 2521.1(d) of the Rent
Stabilization Code (effective May 1, 1987) governing rent
overcharge and fair market rent proceedings provide that
determination of these matters be based upon the law or code
provision in effect on March 31, 1984. Therefore, unless
otherwise indicated, reference to Sections of the Rent
Stabilization Code (Code) contained herein are to the Code in
effect on April 30, 1987.
The issue in this appeal is whether the District Rent
Administrator's order was warranted.
The applicable sections of the Law are Section 26-516 of the
Rent Stabilization Law, Section 2526.1(a) of the current Rent
Stabilization Code, and Section 42A of the former Rent
Stabilization Code.
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 by the filing in March,
1984 of a rent overcharge complaint by the tenants, in which they
stated that they had commenced occupancy on September 10, 1982 at
a rent of $650.00 per month.
The owner was served with a copy of the complaint and was
BD 410288 RO
requested to submit rent records to prove the lawfulness of the
rent being charged. In answer to the complaint, the owner
submitted leases from December 1, 1979, stating that it had
received no earlier leases upon acquiring the subject premises in
1981, contending that the subject apartment had previously been
rent-controlled, and contending that only lawful increases had
been taken above the initial rent. The owner also mentioned that
a rent increase had been granted for a new boiler as of September
10, 1985, but the owner neglected to fill in the docket number.
On October 14, 1986 the owner was sent a Final Notice of Pending
Default, which stated in substance that unless rent records from
the base date (which base date must be proven if claimed to be
after June 30, 1974) were submitted within 20 days, certain
Division of Housing and Community Renewal (DHCR) procedures would
be used to establish the lawful stabilized rent. In a response
dated November 14, 1986 the owner contended in substance that,
pursuant to several stipulations of settlement entered into
between the owner and prior tenant in open court in non-payment
proceedings, the legal regulated rent for the subject apartment
was established at $597.40 in 1982; that the owner was not
required to document the rental history of the apartment prior to
the date of the stipulations; that in a similar case (A L 06334-
L/ART 06550-L) the Commissioner upheld the rent established by a
Stipulation of Settlement in a non-payment proceeding; that there
had been no overcharge above the $597.40 rent of the prior
tenant; and that the complainants never challenged the 1984
registration. With its response the owner enclosed "So Ordered"
stipulations dated February 18, 1982 and July 7, 1982 wherein the
prior tenant agreed to pay 3 and 4 months respectively of rent at
$597.40 per month which he had been withholding because of
alleged service decreases. It appears that at least one and
possibly both of the copies of this response from the owner did
not make it into the file of the proceeding before the
Administrator until after the order was issued; however, the
owner makes similar contentions in its petition, so they are
considered herein.
In an order issued on March 11, 1987 the District Rent
Administrator, using established DHCR default calculation
procedures and disallowing an increase for new equipment, found
an overcharge of $4,305.40 as of March 31, 1987, and directed the
owner to refund such overcharge to the tenant as well as to
reduce the rent.
In this petition, the owner makes the same contentions, and
submits the same documents, as in its November 14, 1986 response,
and in addition submits a copy of an order granting a rent
increase for a new gas burner and boiler.
In answer, one tenant asserts in substance that they filed their
complaint in March, 1984, at the same time that the apartment was
registered; that failure of the prior owner to furnish leases
does not entitle the owner to charge any rent it wishes; and that
the rent purportedly established in settlement of a non-payment
proceeding of a prior tenant was not done by reference to a full
rental history.
BD 410288 RO
The Commissioner is of the opinion that this petition should be
denied.
Section 42A of the former Rent Stabilization Code requires that
an owner retain complete rent records for each stabilized
apartment in effect from June 30, 1974 to date and produce them
to the DHCR upon demand. If the apartment was decontrolled from
the Rent Control Law after June 30, 1974 the owner must provide
satisfactory documentary evidence of the apartment's date of
decontrol, and produce a rental history from that date. In the
present case the owner furnished a rental history only from 1979,
so the Administrator was warranted in using established DHCR
procedures to set the lawful stabilization rent. The
stipulations involving the prior tenant do not affect the
determination of the rent. The (prior) tenant consented to pay
the rent due under the lease, which rent he had been withholding
because of repairs he claimed were needed. The judge, in
approving the stipulations, was not seeking to inquire into the
lawful rent, but simply enforcing the contract for payment of
rent. This situation is different from ARL 06334-L/ART 06590-L,
cited by the owner. In that case the tenant himself had signed a
stipulation, executed by the parties in the presence of their
attorneys and So Ordered by a judge, in a non-payment proceeding.
Among other things that tenant waived any right to appeal to the
[DHCR predecessor] Conciliation and Appeals Board. In the
present case the complainant did not enter into a stipulation not
to file a complaint, and in fact did not enter into any
stipulation at all. The prior tenant did enter into
stipulations, but they were just stipulations to pay the lease
rent. The judge in those stipulations did not purport to
inquire into the lawfulness of the lease rent.
Regarding the owner's contention that the tenants did not object
to the 1984 registration, the Commissioner notes that the tenants
did not have to do so, since the former Rent Stabilization Code
applies in this proceeding initiated prior to April 1, 1984. See
Lavanant v. DHCR, 148 A.D.2d 185, 544 N.Y.S. 2d 331 (App. Div.
1st Dept. 1989). While it may be true that the Administrator
should have allowed an increase for a Major Capital Improvement
(MCI), correct use of the default procedure would also have
involved the disallowance of any Guidelines or vacancy increases
for any leases commencing prior to the time of the
Administrator's order. This would more than negate any benefit
to the owner that would result from consideration of its argument
(aside from its above-dismissed point about stipulations) that
the lawful rents were improperly arrived at. As such, and in the
absence of a timely petition for administrative review by the
tenant, the Commissioner finds that the owner's appeal on this
issue should be denied.
Because of the possibility that the rents charged were not
reduced after the Administrator's order, the owner is cautioned
to adjust the rent, in leases after those considered by the
Administrator, to amounts no greater than that determined by the
Administrator's order plus any lawful increases, and to register
any adjusted rents with the Administrator's order being given as
the reason for the adjustment. Because the tenants have vacated,
a copy of this determination is being mail d to the tenant-in-
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occupancy.
This order awarding overcharges of $4,305.40 may, upon the
expiration of the period in which the owner may institute a
proceeding pursuant to Article Seventy-Eight of the Civil
Practice Law and Rules, be filed and enforced by the tenants in
the same manner as a judgment.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be, and the same hereby is, denied
and that the District Rent Administrator's order be, and the same
hereby is, affirmed. The lawful stabilization rent is $659.92
per month in the lease commencing September 10, 1985.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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