BE 410396 RO, BE 410081 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
APPEAL OF DOCKET NOS. BE 410396 RO
BE 410081 RT
: DISTRICT RENT OFFICE
Clypeta Realty, DOCKET NO. ZL 002160 R
and
Lawrence M. Kalstone, TENANT: Lawrence M. Kalstone
PETITIONERS :
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ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW
IN PART
On May 22, 1987, the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on April 17, 1987, by the
Rent Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the accommodations known as 250 East 73rd Street, New York,
New York, garage space No. #6, wherein the Rent Administrator determined
that the owner had overcharged the tenant.
On May 20, 1987, the above-named petitioner-tenant filed a timely
petition for Administrative Review against the aforementioned order.
These petitions are being consolidated for disposition herein.
The issue herein is whether the Rent Administrator's order was
warranted.
The applicable sections of the Law are Section 2520.6 and 2526.1 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 issue
raised by the administrative appeals.
This proceeding was originally commenced in November 1984 by the filing
of a rent overcharge complaint by the tenant in which the tenant stated
in substance that the garage is owned and operated by the building
owners and therefore the garage space leases should be subject to the
Rent Stabilization Law and Code; that he is being overcharged in the
rent for his garage space and that the owner refuses to give him co-
terminus leases for the garage space as he requested but offers one year
BE 410396 RO, BE 410081 RT
leases only.
In support of these contentions the tenant stated that he has had two
and three year renewal leases for the subject apartment. In addition
the tenant submitted copies of all his garage space leases beginning
with the leases commencing February 1, 1976 to October 31, 1987 for
garage space #6 which listed the owner (Clypeta Realty) as the lessor of
the garage space.
In answer to the tenant's complaint, the owner stated in substance that
the garage space is not subject to the Rent Stabilization Law and Code
in that the space is rented pursuant to a separate and independent lease
and not increased in conjunction with the apartment lease. The owner
submitted the Certificate of Occupancy in effect on May 31, 1968 which
indicated that 29 garage spaces are provided for tenants' use.
In Order Number ZL 002160 R, the Rent Administrator found that the
garage space was subject to Rent Stabilization; that $160.00 was the
Initial Legal registered rent because the tenant had not filed a timely
objection to the 1984 apartment registration and that the owner had
overcharged the tenant $367.59 from November 1, 1984 through April 30,
1987 and directed the owner to refund the overcharge.
In the owner's petition, the owner alleges in substance that the order
should be reversed because the rent paid for the garage was $250.00 from
November 1, 1986 through April 30, 1987 and not $285.00 as cited by the
Rent Administrator; the overcharge should only be computed from April 1,
1984 and the garage space is not subject to Rent Stabilization.
The owner resubmitted the submission which was sent to the Rent
Administrator reiterating its contention that the garage space was not
subject to Rent Stabilization.
The tenant responded to the owner's petition and alleged in substance in
his own petition that the garage lease was subject to Rent Stabilization
but that the order should be modified to treat the complaint as a timely
objection to the April 1, 1984 registered garage rent of $160.00 because
a Tenant Objection had been filed by the tenant August 20, 1984 which
was timely.
The tenant submitted two photo copies of a Tenant Objection form both
dated August 20, 1984 which although essentially the same differed in
the wording of the complaint in Section 15 of the form, along with an
envelope addressed to DHCR dated by pre-paid postage meter as August 20,
1984 but not date-stamped by the post office.
Further, the tenant alleged that the Rent Administrator had mistakenly
calculated the rent overcharge as the guideline increase rather than the
difference in rent between the lawful stabilized rent and the rent
charged; failed to adjust leases to be co-terminus with the apartment
BE 410396 RO, BE 410081 RT
leases and failed to assess treble damages.
The Commissioner is of the opinion that these petitions should be
granted in part.
Section 2520.6(r)(4)(xi) of the current Rent Stabilization Code provides
in pertinent part that ancillary services such as garage facilities for
which there is or was a separate charge shall not be subject to the
provisions of the Rent Stabilization Code where no common ownership
between the operator of such service and the owner exists or existed on
the applicable base date and such service is or was provided on the
applicable base date and at all times thereafter by an independent
contractor pursuant to a contract or agreement with the owner. Where,
however, on the applicable base date or at any time subsequent thereto,
there is or was a separate charge, and there is or was common ownership,
directly or indirectly, between the operator of such service and the
owner, or the service was provided by the owner, any increase, other
than the charge provided in the initial agreement with a tenant to
lease, rent or pay for such service, shall conform to the applicable
rent guidelines rate.
In the instant case the evidence of record including copies of the
garage space leases discloses that from the date of the tenant's first
garage lease in February 1, 1976 the garage was operated by the owner
itself.
Accordingly, the garage space is subject to the applicable rent
guidelines rate of the Rent Stabilization Law pursuant to Section
2520.6(r)(4)(xi). Further the tenant was entitled to select co-terminus
renewal leases for the garage space just as he selected lease options
for apartment renewal leases.
Section 2526.1 of the Rent Stabilization Code provides in pertinent part
that any owner who is found by the DHCR to have collected any rent or
other consideration in excess of the legal regulated rent on and after
April 1, 1984 shall be ordered to pay to the tenant a penalty equal to
three times the amount of such excess. If the owner establishes by a
preponderance of the evidence that the overcharge was not willful, the
DHCR shall establish the penalty as the amount of the overcharge plus
interest from the date of the first overcharge on or after April 1,
1984.
In the instant case the owner has not submitted any evidence to
establish that the overcharge was not willful.
Accordingly, the imposition of treble damages is warranted as the tenant
contends.
The Commissioner rejects the tenant's contention that a timely Tenant
Objection to the initial apartment registration was filed on August 20,
1984 by the tenant.
BE 410396 RO, BE 410081 RT
A diligent search of DHCR registration records fails to reveal a Tenant
Objection Docket for the subject apartment nor has the tenant indicated
such a docket number existed. Further, the tenant's proof of mailing is
insufficient proof in the absence of corroborating documentation by the
post office. Finally, the tenant's submission of two different
photocopies both purported to be of the original tenant objection form
filed on August 20, 1984 casts doubt on the tenant's contention that a
timely objection was in fact filed.
Accordingly, the rent of $160.00 registered on April 1, 1984 for garage
space 6 is the Initial Legal Registered Rent.
The Commissioner notes that the tenant is correct in his contention that
the guideline increase used as the amount of the rent overcharge in the
Rent Administrator's order was incorrect and that the garage leases
should have been adjusted to be co-terminus with the apartment leases.
The Commissioner further notes that the owner's contention that the
overcharge should only be computed from April 1, 1984 is moot because
the overcharge commenced November 1, 1984 in the Rent Administrator
order and April 1, 1984 was established as the base date rent.
The Owner and Tenant through their submissions both concur that the rent
paid from November 1, 1986 through April 30, 1987 was $250.00 not
$285.00 and therefore that portion of the Owner's petition is granted.
Taking the aforementioned factors into account, the Commissioner has
calculated the lawful stabilization rents and the amount of the rent
overcharge for the subject garage space.
The lawful stabilization rents and amount of the rent overcharge are set
forth on the amended rent calculation chart attached hereto and made a
part hereof.
Because this determination concerns lawful rents only through
April 30, 1987, the owner is cautioned to adjust subsequent rents to an
amount no greater than that determined by this order plus any lawful
increases, and to register the garage rents with this order and opinion
being given as the explanation for the registration.
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 in the same manner as a judgment or not
in excess of twenty percent per month thereof may be offset against any
rent thereafter due the owner.
THEREFORE, in accordance with the provisions of the Rent Stabilization
Law and Code, it is
ORDERED, that these petitions for administrative review be, and the same
hereby are, granted in part, and, that the order of the Rent
Administrator be, and the same hereby is, modified in accordance with
BE 410396 RO, BE 410081 RT
this order and opinion. The lawful stabilization rents and the amount
of the rent overcharge are established on the attached chart which is
fully made a part of this order. The amount of the rent overcharge
through April 30, 1987 is $7,653.00.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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