BE 410238 RO / BE 410090 RT
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
APPEALS OF DOCKET NOS.: BE 410238 RO
BE 410090 RT
545 WEST COMPANY, OWNER
AND
ELLEN IRIS CARNI, TENANT,
D.R.O DOCKET NO.: U-3123036-R
PETITIONERS
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ORDER AND OPINION DENYING THE OWNER'S AND GRANTING THE TENANT'S
PETITIONS FOR ADMINISTRATIVE REVIEW
On May 2O, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
April 15, 1987, by the District Rent Administrator, concerning
housing accommodations known as 545 West 111th Street, New York,
New York, Apartment 7-A.
On May 16, 1987 Ellen Iris Carni, the tenant of apartment 7-A
also filed a Petition for Administrative Review of the
Administrator's order.
The Commissioner is consolidating these two petitions and this
order is dispositive of both.
The appealed order of the District Rent Administrator determined
that a rent overcharge had occurred.
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 appeal.
In the owner's petition, the owner contends, in substance, that
the District Rent Administrator's order is arbitrary and
capricious in arriving at the rent computations and that it did
not collect the Major Capital Improvement (MCI) rent increase
granted pursuant to Order No. CDR 5597, until October, 1985.
The tenant alleged in her petition that the District Rent
Administrator improperly failed to award treble damages for
overcharges collected, on or after, April 1, 1984.
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
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determination of these matters be based upon the law or code
provisions in effect on March 31, 1984. Therefore, unless
otherwise indicated, any reference to sections of the Rent
Stabilization Code (Code) contained herein are to the code in
effect on April 30, 1987 and this proceeding is being determined
pursuant thereto.
This proceeding was commenced on March 30, 1984 upon the filing
of a general complaint of rent overcharge by the tenant with the
former New York City Conciliation and Appeals Board (CAB).
On April 1, 1984, responsibility for the administration of rent
stabilization in New York City was transferred to the New York
State Division of Housing and Community Renewal (DHCR).
The Commissioner is of the opinion that the owner's petition
should be denied and that the tenant's petition should be
granted.
The record revealed that the owner was served with the tenant's
overcharge complaint along with a notice requesting that it
submit a complete rental history for the subject apartment from
its base date and that the owner complied with the notice.
The District Rent Administrator determined however, based on the
record in this case, that the owner was charging the subject
tenant a rental in excess of the lawful stabilization rent
permitted under the applicable provisions of the Law, Code and
Guidelines.
The Commissioner finds that no evidence was adduced by the owner
in support of its contention on appeal that the District Rent
Administrator's order is arbitrary and capricious in arriving at
the rent computations.
Moreover, the record below reveals that the owner filed an answer
to the tenant's complaint, on January 6, 1986, in which it is
stated that Order No. CDR 5597 (granting the owner an MCI
building-wide increase of $11.37 per apartment) became effective
on May 1, 1983.
In computing the rental for the subject apartment, the District
Rent Administrator's rent chart shows that this MCI rent increase
was taken into consideration, effective May 1, 1983, as stated
in the owner's own answer.
Accordingly, the owner's contention on appeal about the
collectability of Order No. CDR 5597 is without merit.
As to the tenant's (Ellen Carni) allegations in her petition that
the District Rent Administrator should have assessed treble
damages, for overcharges collected, on or after, April 1, 1984,
the owner has the burden of proof to show lack of willfulness.
Section 25-516(a) of the Rent Stabilization Law now provides for
"a penalty equal to three times the amount of the overcharge" to
be paid to the tenant unless "the owner establishes by a
preponderance of the evidence that the overcharge was not
willful" in which case the Division of Housing and Community
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Renewal (DHCR) "shall establish the penalty as the amount of the
overcharge plus interest."
In the case at hand, the owner's answer to the tenant's petition
for administrative review, (filed on November 25, 1987) contains
a copy of a refund check, dated November 6, 1987, made to the
tenant's order, in the amount of $17,275.39, representing all
excess rent collected as calculated by the District Rent
Administrator.
Inasmuch as the tenant's petition does not allege the owner's
failure to refund excess rent, the Commissioner finds that the
owner refunded such amount to the subject tenant.
Finally, the Commissioner finds that treble damages should have
been assessed by the District Rent Administrator below.
The record clearly shows that the owner received notice at the
District Rent Office level that treble damages may be assessed.
The owner's answer form, dated January 6, 1986, clearly states
in pertinent part:
Your failure to comply with the aforementioned
requirements will result in a determination by DHCR
that your Answer is incomplete and you will be
considered in default. Upon such default DHCR will
establish the tenant's lawful stabilized rent and will
require the owner to refund to the tenant all such
overcharge(s) covering the period prior to April 1,
1984. Further, the owner is subject to treble
damages, reasonable costs, attorney's fees, and
interest on rent overcharges collected on or after
April 1, 1984.
Moreover, the Commissioner notes that the overcharge refund came
too late to justify a denial of treble damages.
For an owner to avoid a finding of treble damages, DHCR policy
requires that the refund either be made within the twenty (20)
day answer period or reasonably soon after the owner receives the
overcharge complaint.
It is apparent that the owner's refund herein was made after the
issuance of the District Rent Administrator's order.
Upon the facts found herein, the Commissioner finds that the
presumption of willfulness contained in Section 25.516(a) of the
Rent Stabilization Law has not been overcome by the owner.
On the issue of treble damages the owner has the burden of proof
of showing a lack of willfulness and this was not accomplished by
the owner in this proceeding.
The attached calculation chart is incorporated in and made a part
of the Commissioner's order.
The Commissioner has recomputed the overcharge adding a multiple
of three against those overcharges occurring after April 1, 1984
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and subtracting from the total overcharge any monies already
refunded.
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 by the tenant
in the same manner as a judgment or not in excess of twenty
percent thereof per month may be offset against any rent
thereafter due the owner.
THEREFORE, pursuant to the Rent Stabilization Law and Code, it is
ORDERED, that the owner's petition be, and the same hereby is
denied and that the tenant's petition be and the same hereby is
granted and that the District Rent Administrator's order be, and
the same hereby is, modified in accordance with this Order and
Opinion to provide that the remaining overcharge of $12,147.78
must be refunded to the tenant.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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