BD 610002-RO (REOPENED), BD 610540-RO, BD 610574-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



          ----------------------------------X
          IN THE MATTER OF THE ADMINISTRATIVE   ADMINISTRATIVE REVIEW  
          APPEAL OF                             DOCKET NOS.:  BD 610002-RO
                                                              (REOPENED)
                                                              BD 610540-RO
                                                              BD 610574-RO
                  BARRY LEVITES
          (FOR LEVITES REALTY MANAGEMENT CORP.,
          MANAGER FOR YESTERDAY ASSOCIATES),
                                                 DRO DOCKET NOS.: B-3100892-RT
                                                                 CDR 28674
                                                                 GD-610010-RP

                                                PRIOR OWNER:  YO-YO REALTY
                                                7-A ADMINISTRATOR:  JOSE A. 
                                                                    RODRIGUEZ

                                                TENANT:  MICHAEL SILVAGNOLI 
                                   PETITIONER
           ----------------------------------X                                   

                        ORDER AND OPINION REOPENING DOCKET NO.
                BD 610002-RO AND REVOKING COMMISSIONER'S ORDER, REVOKING 
                     ADMINISTRATOR'S ORDER IN DOCKET NO. GD-610010-RP
                                          AND
                              TERMINATING THE PROCEEDING,
                     DENYING PETITIONS FOR ADMINISTRATIVE REVIEW,
                                          AND
           MODIFYING ADMINISTRATOR'S ORDER IN DOCKET NO. B-3110892-RT

           On April 3 and April 6, 1987 the above-named petitioner-owner, in 
           separate envelopes, filed triplicate Petitions for Administrative 
           Review against an order (Docket No. B-3100892-RT) issued on March 
           23, 1987 by the District Rent Administrator 10 Columbus Circle, New 
           York, New York concerning housing accommodations known as Apartment 
           5J at 1325 Edward L. Grant Highway, Bronx, New York wherein the 
           District Rent Administrator determined that the owner had 
           overcharged the tenant.  The petitions were assigned separate 
           docket numbers (BD 610002-RO, BD 610540-RO and BD 610574-RO), and 
           processed separately.  On the petitions the owner incorrectly 
           listed the order being appealed as Docket No. B-31100982-RT.  
           Because there is no file with that number, no file could be found 
           to decide the appeal, so an order was issued on April 20, 1992 in 
           Docket No. BD 610002-RO remanding the proceeding to reconstruct the 
           file if necessary.












          BD 610002-RO (REOPENED), BD 610540-RO, BD 610574-RO


           The new proceeding was assigned Docket No. GD 610010-RP.  On 
           September 24, 1992 an order was issued (incorrectly giving the 
           original docket number as B-3100982-RT, as listed on the owner's 
           petition) stating that "[a]fter a review of the record in this 
           remand proceeding, the Rent Administrator has affirmed the 
           previously issued order.  (Docket No. BD 610574-RO Issued on August 
           16, 1991)."

           In reality, the only thing that happened to Docket No. BD 610574-RO 
           on August 16, 1991 was that the case file was transferred from one 
           person to another on the Division of Housing and Community 
           Renewal's (DHCR's) computerized case tracking system.  The order in 
           Docket No. GD 610010-RP is incorrect, and is being revoked since 
           the appeal of the order in Docket No. B-3100892-RT has never been 
           determined on the merits.  Because that case file has been located, 
           there is no need for a remand for its reconstruction, so Docket No. 
           BD 610002-RO is being reopened and decided on the merits together 
           with Docket Nos. BD 610540-RO and BD 610574-RO.

           The Commissioner notes that this proceeding was initiated 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 
           provisions 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 in Docket No. B-3100892-RT was warranted.

           The applicable sections of the Law are Section 26-516 of the Rent 
           Stabilization Law and Section 2526.1(a) of the current 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 
           issues raised by the administrative appeals.

           This proceeding was originally commenced by the filing in March, 
           1984 of a rent overcharge complaint and a fair market rent appeal 
           by the tenant, in which he stated that he had commenced occupancy 
           of Apartment 5J on April 1, 1983 pursuant to a 3-year lease at a 
           rent of $258.00 per month.  He named Yo-Yo Realty as the owner.  
           Copies of the complaints were sent to it in 1984.  On October 3, 
           1986 a notice was sent to Jose A. Rodriguez at the subject 
           building, directing the owner to submit certain documents if the 
           tenant was eligible to file a fair market rent appeal and, if the 
           tenant was ineligible, to submit leases from the base date and to 
           complete a rental history form as directed in the attached answer 






          BD 610002-RO (REOPENED), BD 610540-RO, BD 610574-RO

           form (RS-1), which further advised that the owner would be liable 
           for treble damages for overcharges after April 1, 1984.  In answer, 
           Levites Realty Management Corporation replied that the present 
           owner, Yesterday Associates, had redeemed the property from Jose 
           Rodriguez, the 7A Administrator who resided at the property, but 
           that it had received no records for the property at all when it 
           took title.

           In an order issued on March 23, 1987 the Administrator used DHCR 
           default procedures to set the tenant's lawful rent at $187.00 per 
           month, and determined an overcharge of $6,035.00, including treble 
           damages from April 1, 1983 to March 31, 1986.  The order directed 
           Yo-Yo Realty to refund all excess rent from April 1, 1983 until the 
           date the building was sold, and directed the current owner, named 
           as Yesterday Associates c/o Levites Realty Management Corporation, 
           to reduce the rent as well as to make a refund.  The order also 
           stated that the owner had not registered the rents and services of 
           the subject apartment.  The copy of the order sent to Yo-Yo Realty 
           was returned stamped "Moved, Not Forwardable."

           In his petitions against the order, Barry Levites contends in 
           substance that notice was never mailed to the correct owner at the 
           correct address; that, while the order stated that the owner had 
           not provided a full rental history, the owner had informed the DHCR 
           that no rent records had been received from the 7-A Administrator 
           and had requested advice as to how to respond to an overcharge 
           complaint without them, but had never received a response from the 
           DHCR; that the order, while stating that the owner has not 
           registered the rents and services of the subject apartment 
           building, somehow determined the lowest rent of an apartment in the 
           same line; and that the owner was never afforded an opportunity to 
           establish the rent as a fair market rent.  With his petition Barry 
           Levites has enclosed a copy of the October 3, 1986 letter to Jose 
           A. Rodriguez.

           The Commissioner is of the opinion that Docket No. BD 610002-RO 
           should be reopened and the Commissioner's order revoked; that the 
           Administrator's order in Docket No. GD-610010-RP should be revoked 
           and the proceeding terminated; that Petitions for Administrative 
           Review No. BD 610002-RO, BD 610540-RO and BD 610574-RO should be 
           denied; and that the Administrator's order in Docket No. B-3110892- 
           RT should be modified.

           It is undisputed that both the prior owner and the 7A Administrator 
           were served with a demand for prior leases.  In its letter of 
           November 6, 1986, the subsequent owner, Levites Realty Management 
           Corporation, acknowledged receipt from the 7A Administrator of the 
           October 3, 1986 letter directing submission of prior leases, but 
           the owner clearly stated that it could not furnish the data 
           requested.

           Although the Administrator, after receipt of the November 6, 1986 












          BD 610002-RO (REOPENED), BD 610540-RO, BD 610574-RO

           letter, should have served Levites Realty with the complaint and 
           fair market rent appeal, Levites Realty made clear in its letter 
           that it was unable to submit prior rent records.

           Based thereon, the Administrator was not in error in determining 
           the stabilized rent pursuant to the "42A procedure".  This 
           procedure has been approved by the courts for use where an owner 
           has failed to comply with its obligations under Section 42A of the 
           former Rent Stabilization Code to provide prior rent records.
           (61 Jane Street Associates v. CAB, NYLJ, 5/9/84, p. 11, col. 4 
           ((Sup. Ct, N.Y. Co., Greenfield, J.)); 108 A.D. 2d 636, 486, NYS2d 
           694; affirmed 65 NY2d 898, 493 NYS2d 455 ((C.A., 1985).

           There is no discrepancy in the Administrator's knowledge of the 
           rents of other apartments in the building.  DHCR records show that 
           52 stabilized apartments were registered in 1984.  The order stated 
           that the rents of the subject apartment, not the building, were not 
           registered.  The DHCR's computerized rent registration shows the 
           1986 registration of the subject apartment as being the earliest 
           registration on file, so it was proper, pursuant to Section 2528.4 
           of the Rent Stabilization Code, to disallow any rent increases 
           until the owner files registrations for 1984 and 1985.

           Concerning the owner's demand that he be permitted to establish the 
           fair market rent, the Commissioner notes that this method of 
           determining the stabilized rent, pursuant to Section 25 of the 
           former Rent Stabilization Code, may only be employed if the first 
           tenant to occupy the apartment following decontrol from Rent 
           Control filed a fair market rent appeal.  The owner has failed to 
           produce any evidence that the complaining tenant is such a tenant, 
           and no DHCR records have been located showing a date of decontrol 
           or even whether the apartment was ever subject to rent control.

           The owner has not submitted any evidence of efforts (legal action, 
           etc.) made in an attempt to obtain rental records from either the 
           7A Administrator or the prior owner, so this order continues the 
           presumption in the Administrator's order, pursuant to Section 
           2526.1(a)(1) of the current Code, that overcharges, resulting from 
           the failure to prove the lawfulness of the rents charged, were 
           willful.  While treble damages are imposed, the total penalty is 
           less than calculated by the Administrator.  On May 16, 1985 the 
           DHCR received an initial registration of Apartment 2I by the 7A 
           Administrator, listing the complainant as being in that apartment 
           as of April 1, 1985.  The Administrator had calculated the 
           overcharge for the subject apartment through March 31, 1986.  The 
           total overcharge of the complainant in the subject apartment is 
           therefore $3,408.00 ($852.00 from April 1, 1983 to March 31, 1984, 
           and $2,556.00, including treble damages, from April 1, 1984 to 
           March 31, 1985).

           It appears (because the tenant named it on his March 7, 1984 
           complaint) that Yo-Yo Realty owned the subject building until at 






          BD 610002-RO (REOPENED), BD 610540-RO, BD 610574-RO

           least April 1, 1984, so it is liable for refunding the $852.00 
           overcharge for the period prior to that date.  While Yo-Yo Realty, 
           the 7A Administrator, and Yesterday Associates/Levites Realty 
           Management Corporation are individually liable for each of their 
           portions of the overcharge, pursuant to Section 2526.1(f) Yesterday 
           Associates/Levites Realty Management Corporation is also jointly 
           and severally liable with Yo-Yo Realty and the 7A Administrator for 
           the overcharge attributable to each of them.  In other words, the 
           tenant may collect the entire $2,556.00 overcharge occurring on and 
           after April 1, 1984 from Yesterday Associates or Levites Realty 
           Management Corporation.

           This order is issued without prejudice to any right which Yesterday 
           Associates or Levites Realty Management Corporation might have to 
           proceed against Yo-Yo Realty and/or the 7A Administrator in a court 
           of competent jurisdiction for overcharge penalties for which Yo-Yo 
           Realty or the 7A Administrator were liable but which Yesterday 
           Associates or Levites Realty Management Corporation paid.

           This order may, upon the expiration of the period in which 
           Yesterday Associates or Levites Realty Management Corporation may 
           institute a proceeding pursuant to Article Seventy-Eight of the 
           Civil Practice Law and Rules, be filed and enforced against them by 
           the tenant in the same manner as a judgment.

           The owner is directed to reflect the findings and determinations 
           made in this order on all future registration statements, including 
           those for the current year if not already filed, citing this Order 
           as the basis for the change.  Registration statements already on 
           file, however, should not be amended to reflect the findings and 
           determinations made in this order.  The owner is further directed 
           to adjust subsequent rents to an amount no greater than that 
           determined by this order plus any lawful increase.  A copy of this 
           order is being sent to the current tenant.

           THEREFORE, in accordance with the Rent Stabilization Law and Code, 
           it is

           ORDERED, that Docket No. BD 610002-RO be, and the same hereby is, 
           reopened; that the Commissioner's order in that proceeding be, and 
           the same hereby is, revoked; that the Administrator's order in 
           Docket No. GD-610010-RP be, and the same hereby is, revoked; that 
           that proceeding be, and the same hereby is, terminated; that 
           Petitions for Administrative Review Nos. BD 610002-RO, BD 610540-RO 
           and BD 610574-RO be, and the same hereby are, denied; and that the 
           Administrator's order in Docket No. B-3110892-RT be, and the same 
           hereby is, modified in accordance with this order and opinion.  The 
           overcharge from April 1, 1983 to March 31, 1984 is $852.00, which 
           the tenant may collect from Yo-Yo Realty.  The overcharge from 
           April 1, 1984 through March 31, 1985 is $2,556.00, which the tenant 
           may collect from Yesterday Associates or Levites Realty Management 
           Corporation.  The lawful stabilization rent is $187.00 per month as 












          BD 610002-RO (REOPENED), BD 610540-RO, BD 610574-RO

           of March 31, 1985.







           ISSUED:

                                                   ------------------------
                                                   JOSEPH A. D'AGOSTA
                                                   Deputy Commissioner
            
              
                                              
    

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