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
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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
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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:
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JOSEPH A. D'AGOSTA
Deputy Commissioner
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