BE 410131 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
APPEALS OF DOCKET NOS.:
BE 410131 RO
BE 410255-RO
HARLINGTON REALTY CORP., D.R.O. DOCKET NOS.:
L 3115534 R; 41424
PETITIONER TENANT: Denise Puricelli
-----------------------------------X
ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
On May 21 and May 22, 1987, the above named petitioner-owner
filed Petitions for Administrative Review against orders issued
on April 16 and April 17, 1987 respectively, by the District Rent
Administrator located at Gertz Plaza, Jamaica, New York, con-
cerning housing accommodations known as 248 West 105th Street,
New York, New York, apartment 2D, wherein the Administrator
determined that the tenant had been overcharged.
The proceedings have been consolidated for purposes of this
determination.
The issue on appeal is whether the Administrator's orders were
warranted.
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 deter-
mination of these matters be based upon the law or code provi-
sions 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 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 appeals.
This proceeding was originally commenced by the filing of a rent
overcharge complaint by the tenant with the New York City Concil
iation and Appeals Board, one of the predecessor agencies to the
Division of Housing and Community Renewal (DHCR). The tenant
took occupancy pursuant to a lease commencing January 1, 1982
and expiring December 31, 1982 at a monthly rent of $586.05.
During the pendency of the initial overcharge complaint, on
BE 410131 RO
January 10, 1985, the tenant filed an objection to the 1984
rent/services registration, Docket No. 41424, stating that the
rent paid on April 1, 1984 was an overcharge. By order issued on
April 17, 1987, the Administrator determined that the objection
was a duplicate of the overcharge complaint assigned Docket No.
L-3115534-R, terminated the objection, and consolidated the
proceedings under Docket No. L-3115534-R.
By order issued on April 16, 1987 under Docket No. L 3115534-R,
utilizing the Section 42-A default procedure, the District Rent
Administrator determined that the tenant had been overcharged a
total of $51,634.72, including treble damages on overcharges
collected on or after April 1, 1984; established the legal regu-
lated rent as of January 1, 1986 through December 31, 1987 at
$277.96, and directed a refund to the tenant of the overcharges.
In its petition under Docket No. BE 410255-RO, challenging Docket
No. 41424, the owner alleges that the order terminating the
objection and consolidating the proceedings was inappropriate, as
the objection requested a fair market rent appeal, in addition to
a complaint of overcharge. The owner further alleges that it
timely served an answer to the objection on the Division, along
with leases from 1980.
In its petition under Docket No. BE 410131-RO, challenging Docket
No. L-3115534-R, the owner contends that the Administrator's
order should be revoked, alleging that the tenant's complaint was
never sent to it; that the DHCR is unfairly claiming willful
default, and that treble damages should not have been assessed.
The owner further states that it is not required to provide
records prior to 1981, four years prior to the filing of the
tenant's objection.
In answer, the tenant contends that the default order should be
upheld because the petitioner has not shown it to be in error,
and that the owner still has not supplied the requisite rental
records.
The Commissioner is of the opinion that these petitions should be
denied.
Section 42A of the former Rent Stabilization Code requires that
an owner retain complete records for each stabilized apartment in
effect from June 30, 1974 (or the date the apartment became sub-
ject to rent stabilization, if later) to date and to produce such
records to the DHCR upon demand.
Section 26-516 of Rent Stabilization Law, effective April 1,
1984, limited an owner's obligation to provide rent records by
providing that an owner may not be required to maintain or
produce rent records for more than four years prior to the most
recent registration, and concomitantly, established a four year
limitation on the calculation of rent overcharges.
It has been the DHCR's policy that overcharge complaints filed
prior to April 1, 1984 are to be processed pursuant to the Law or
Code in effect on March 31, 1984. (See Section 2526.1(a)(4) of
the current Rent Stabilization Code.) The DHCR has therefore
BE 410131 RO
applied Section 42A of the former Code to overcharge complaints
filed prior to April 1, 1984, requiring complete rent records in
these cases. In following this policy, the DHCR has sought to be
consistent with the legislative intent of the Omnibus Housing Act
(Chapter 403, laws of 1983), as implemented by the New York City
Conciliation and Appeals Board (CAB), the predecessor agency to
the DHCR, to determine rent overcharge complaints filed with the
CAB prior to April 1, 1984 by applying the law in effect at the
time such complaints were filed so as not to deprive such tenants
of their right to have the lawful stabilized rent determined from
the June 30, 1974 base date and so as not to deprive tenants
whose overcharge claims accrued more than four years prior to
April 1, 1984 of their right to recover such overcharges. In
such cases, if the owner failed to produce the required rent
records the lawful stabilized rent would be determined pursuant
to the default procedure approved by the Court of Appeals in 61
Jane Street Associates v. CAB, 65 N.Y.2d 898, 493 N.Y.S.2d 455
(1985).
However, it has recently been held in the case of J.R.D. Mgmt. v.
Eimicke, 148 A.D. 2d 610, 539 N.Y.S.2d 667 (App. Div. 2d Dep't
1989), motion for leave to reargue or for leave to appeal to the
Court of Appeals denied (App. Div. 2d Dep't, N.Y.L.J., June 28,
1989, p.25, col.1) motion for leave to appeal to the Court of
Appeals denied (Court of Appeals, N.Y.L.J., Nov. 24, col.4).,
motion for leave to reargue denied (Court of Appeals, N.Y.L.J.,
Feb. 15, 1990, p.25, col. 1), that the law in effect at the time
of the determination of the administrative complaint rather than
the law in effect at the time of the filing of the complaint must
be applied and that the DHCR could not require an owner to pro-
duce more than four years of rent records.
Since the issuance of the decision in JRD, the Appellate Divi-
sion, First Department, in the case of Lavanant v. DHCR, 148
A.D.2d 185, 544 N.Y.S.2d 331 (App. Div. 1st Dept't 1989), has
issued a decision in direct conflict with the holding in JRD.
The Lavanant court expressly rejected the JRD ruling, finding
that the DHCR may properly require an owner to submit complete
rent records, rather than records for just four years, and that
such requirement is both rational and supported by the law and
legislative history of the Omnibus Housing Act.
Since in the instant case the subject dwelling unit is located in
the First Department, the Lavanant decision governs and complete
rent records from the date of decontrol were properly required.
Concerning the allegation of the owner that the complaint under
Docket No. L-3115534-R was never sent to it, the Commissioner
finds that the record establishes that the complaint was served
on the owner by mail on October 9, 1984; that the Final Notice of
Pending Default was served on June 24, 1986; that another copy of
the complaint, along with the appropriate answer forms was served
by mail on August 25, 1986, in response to the owner's attorney's
request of July 2, 1986. By letter of January 23, 1987 the
owner's attorney indicated she had received no reply to her July
2, 1986 letter and again requested a copy of the complaint. DHCR
BE 410131 RO
did not respond to this letter. However, the owner requested and
was granted an extension of time to respond in the objection
proceeding, until March 31, 1987. The owner alleges that it
submitted an answer on that date, but submits no proof and no
copy of that answer.
With regard to the owner's assertion that treble damages should
not have been assessed, Section 2526.1(a)(1) of the current Code
provides that a landlord who has been found by the Division to
have collected rent overcharges shall be liable to the tenant
for a penalty equal to three times the amount of such overcharge.
However, if the landlord establishes, by a preponderance of the
evidence, that the overcharge was not willful, the penalty is to
be assessed at only the amount of the overcharge plus interest.
The petitioner has offered no evidence that the overcharges
herein were not willful. Given that the owner failed to submit a
complete rental history to the Rent Administrator, the owner
could not justify the rent that it had charged the tenant. There
fore, the imposition of treble damages was proper.
With regard to the contention of the owner that the order of
consolidation was inappropriate in that the tenant requested a
fair market rent appeal, Section 25 of the Code provides that a
fair market rent appeal application may be filed by the tenant of
an apartment which was subject to rent stabilization or rent
control prior to July 1, 1971 and was vacated between January 1,
1974 and June 30, 1974, both dates inclusive, or of an apartment
which was subject to rent control on June 30, 1974 and vacated
thereafter.
Section 2522.3 of the current Rent Stabilization Code provides,
in pertinent part, that an appeal of the Initial Legal Registered
Rent on the ground that it exceeds the fair market rent for the
housing accommodation, may be filed by the tenant of an apartment
which was subject to the City Rent Law on December 31, 1973.
DHCR records indicate that the subject apartment was decontrolled
in 1952. The tenant therefore was not entitled to file a fair
market rent appeal. The Commissioner finds, that the proceedings
were properly consolidated and processed s an overcharge com-
plaint.
For the reasons stated above, the Commissioner is of the opinion
that these petitions should be denied and that the order estab-
lishing the legal stabilized rent on January 1, 1986 as $277.96,
utilizing the default formula, and finding an overcharge of
$51,634.72, should be affirmed.
This order may, upon the expiration of the period in which the
owner may institute a proceeding pursuant to Article 78 of the
Civil Practice Law and Rules, be filed and enforced as a judgment
or not in excess of twenty percent per month f the rent over-
charge may be offset against any rent thereafter due the owner.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
BE 410131 RO
ORDERED, that these petitions be, and the same hereby are,
denied, and that the Administrator's orders be, and the same
hereby are, affirmed.
ISSUED:
_____________________
ELLIOT SANDER
Deputy Commissioner
|
