BD 410426-RO; CA 410253-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 NOS.:
DRO DOCKET NOS.:
L-3115608-R; CDR 28426;
CDR 28426 As Amended
----------------------------------x TENANTS: DAVID & NANCY POLLEY
ORDER AND OPINION TERMINATING PROCEEDING IN DOCKET NO. BD 410426-RO
AND GRANTING PETITION FOR ADMINISTRATIVE REVIEW NO. CA 410253-RO
On January 28, 1988 the above-named petitioner-owner filed a
Petition for Administrative Review (Docket No. CA 410253-RO)
against an order issued on December 29, 1987 by the District Rent
Administrator, 10 Columbus Circle, New York, New York con-cerning
housing accommodations known as Apartment 4-L at 215 East 80th
Street, New York, New York wherein the District Rent
Administrator determined that the owner had overcharged the
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
over-charge and fair market rent proceedings provide that
determina-tion of these matters be based upon the law or code
provision in effect on March 31, 1984. Therefore, unless
otherwise indi-cated, 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
Adminis-trator'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 Stabili-
zation Code and Sections 2(i)A(1)(b), 20A, 35 and 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 December 1, 1970 at a
rent of $540.00 per month.
The owner was served with a copy of the complaint and was re-
quested to submit rent records to prove the lawfulness of the
rent being charged. In answer to the complaint, the owner sub-
mitted a rental history from January 1, 1970.
In an order issued on December 16, 1986 the District Rent Admin-
istrator, using the complainants' initial December 1, 1970 rent
as the base date rent, found that there was no overcharge as of
December 30, 1986.
On February 25, 1987 the Administrator sent the parties a notice
that "[u]pon reconsideration, the District Rent Administrator is
reopening this proceeding and proposes to: Revoke the order and
establish whether the rent collected is the lawful stabilized
rent." The notice stated that answer forms were enclosed. On
March 2, 1987 the tenants wrote that no answer forms were en-
closed with the notice to them.
On March 25, 1987 the Administrator issued a two-sentence order
revoking the December 16, 1986 order.
On April 30, 1987 the owner filed a Petition for Administrative
Review (Docket No. BD 410426-RO) against the March 25, 1987
revo-cation order, contending in substance that the February 25,
1987 notice had contained no forms on which to respond and no
allega-tions to which to respond; and that it should be given an
opportunity to respond to the allegations which resuslted in the
On May 21, 1987 the owner was requested to submit a copy of the
May 31, 1968 Base Date lease or rent ledgers. On August 31, 1987
the owner was sent a Final Notice of Pending Default requesting
that lease and setting forth the Division of Housing and Com-
munity Renewal's (DHCR's) default procedures.
On December 29, 1987 the Administrator issued an order super-
seding the order of December 16, 1986, and finding an overcharge
of $19,234.27 as of December 31, 1987 after setting a default
rent because the owner had not submitted a rental history from
May 31, 1968.
In its petition (Docket No. CA 410253-RO) against that new order,
the owner contends in substance that utilization of the leases
from 1970 will give the lawful stabilization rents; that its
original answer had contained a lease rider giving the name of
the tenant prior to January 1, 1970 and showing her as having a
rent of $390.00; and that it purchased the subject building in
In answer, the tenants assert in substance that the base date is
May 31, 1968; and that a rider indicating a rent of $390.00 prior
to January 1, 1970 is not evidence of the prior rent or of the
rent in effect on the base date.
The Commissioner is of the opinion that the proceeding in Docket
No. BD 410426-RO should be terminated, and that the owner's
peti-tion in Docket No. CA 410253-RO should be granted.
The Administrator's bare order of May 21, 1987, revoking an order
which had found that all of the complainants rents were lawful,
had no practical effect. It did not require or even hint at any
particular rents to be charged or overcharges to be refunded.
That was done by the new order of December 29, 1987, which the
owner has had the opportunity to contest on the merits. The
owner's petition against the revocation order was therefore
premature, and that appeal proceeding should be terminated.
Section 20A of the former Rent Stabilization Code provides that
the stabilization rent for a dwelling unit subject to the Code on
June 30, 1974 shall be the rent charged and paid on May 31, 1968
plus subsequent guidelines increases. Section 2(i)a(1)(b)
pro-vides that the initial legal regulated rent for a dwelling
unit that was subject to the Code on June 30, 1971, was vacated
during the period of "vacancy decontrol" (July 1, 1971 through
June 30, 1974) and became subject to the Code on July 1, 1974
shall be the rent charged and paid on June 30, 1974.
The lease commencing January 1, 1970 submitted by the owner
includes a rider initialed by the prior tenant giving the name of
the previous tenant and listing her rent as $390.00 per month.
The Commissioner considers this a business record which
satisfac-torily establishes that a rent of $390.00 was charged
prior to January 1, 1970, and almost certainly charged prior to
the effective date of the Rent Stabilization Law of 1969. As
shown on the rent calculation chart attached hereto and made a
part hereof, there has been full compliance with the Rent
Stabilization Code in charging increases above the pre-1970 rent
of $390.00. While the base date in the present case is May 31,
1968 the Commis-sioner considers that the record contains
reasonable assurance that only lawful rents have been charged
since the base date;
it is not necessary to use the DHCR default procedure to
establish a lawful rent.
The Commissioner notes that the default procedures upheld in 61
Jane Street Associates v. CAB, N.Y.L.J., May 9, 1984, p. 11, col.
4 (Sup. Ct. N.Y. Co. Greenfield, J.), affirmed, 108 A.D. 2d 636,
486 N.Y.S. 2d 694, affirmed 65 N.Y. 2d 898, 493 N.Y.S. 2d 455
(C.A., 1985), modified an owner's obligation to produce prior
rent records to require such records going back to at least June
30, 1974 or the date of an apartment's entry into stabilization,
whichever was later. The Commissioner also notes that in Cohen
v. Mirabel, 527 N.Y.S. 2d 34 (A.D. 2d Dept. 1988), motion for
leave to appeal to the Court of Appeals denied, 533 N.Y.S. 2d 57,
the DHCR's substitution of June 30, 1974 for May 31, 1968 as the
base date for an apartment continuously stabilized since at least
May 31, 1968 was upheld as rational.
As shown on the attached rent calculation chart, all rent in-
creases have been within the amounts allowed by the Guidelines as
of November 30, 1987. While a rent of $1,006.52, noted in the
Administrator's amended order as being charged for the period
from December 1, 1987 to November 30, 1989 would represent a
lawful 6.5% increase for a 2-year renewal lease, the file does
not actually contain such a lease. While the owner has
registered a woman with a different last name with a lease from
December 1, 1987 to November 30, 1989, the rent of $885.96 is the
reduced rent given in the Administrator's amended order, without
any vacancy allowance, thus suggesting that the woman is actually
the complainant. However, because of the uncertainty, this order
determines the lawful rents only as of November 30, 1987.
If the owner has already complied with the Administrator's order
and there are arrears due to the owner as a result of the present
determination, the owner is directed to allow the tenants to pay
off the arrears in twenty four equal monthly installments. Should
the tenants vacate after the issuance of this order, or have
pre-viously vacated, said arrears shall be payable immediately.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that the proceeding in Docket No. BD 410426-RO be, and
the same hereby is, terminated; that the owner's petition in
Docket No. CA 410253-RO be, and the same hereby is, granted; that
the District Rent Administrator's amended order of December 29,
1987 be, and the same hereby is, revoked; and it is found that
there has been no overcharge as of November 30, 1987. The lawful
stabilization rents are set forth on the attached rent
calculation chart, which is fully made a part of this order. The
lawful stabilization rent is $945.09 per month in the lease from
December 1, 1985 to November 30, 1987.