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                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO. BG 410044 RO

                                              :  DISTRICT RENT OFFICE
               Harvey Sorkin,                    DOCKET NO. TC 076846-G
                                                 TENANTS: Michelle Tonjes    
                                                          Mary Degan
                                PETITIONER    : 

                                       IN PART

          On July 8, 1987, the above-named petitioner-owner filed a Petition 
          for Administrative Review against an order issued on June 3, 1987,
          by a Rent Administrator concerning the housing accommodations known 
          as 136 West 87th Street, New York, New York, Apartment No. 9, 
          wherein the Rent Administrator determined that the owner had 
          overcharged the tenant in the amount of $25,047.12, including 

          The Commissioner notes that this proceeding was filed 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 
          provision 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, 

          The issue herein is whether the Rent Administrator's order was 

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law, Section 42A of the former Rent Stabilization 
          Code 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 
          issue raised by the administrative appeal.  

          This proceeding was originally commenced by the filing on September 

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          23, 1983 of a rent overcharge complaint by the tenants, in which 
          they stated that they had commenced occupancy pursuant to a lease 
          commencing November 15, 1982 and expiring November ,30 1983 at a 
          monthly rent of $637.00.  The tenant submitted leases for the prior 
          tenant in the subject apartment for the period from August 1, 1978 
          to July 31, 1982.

          In a letter dated March 31, 1986, the tenant stated that the 
          building was sold on January 30, 1986 to Mr. Harvey Sorkin in 
          Purchase, New York, and that the rent checks were being sent to 
          Herbert Charles and Company.

          On June 26, 1986, a copy of the complaint was sent to Herbert 
          Charles and Company, with full instructions that if no answer was 
          received within 20 days, the owner would be considered in default. 

          On August 6, 1986, a Final Notice of Pending Default was sent to 
          Herbert Charles and Company, with a detailed description of the 
          method that would be utilized to establish the lawful rent if the 
          complete lease history was not received.

          In the order under appeal herein the Rent Administrator determined 
          that due to the owner's failure to submit a complete rental 
          history, the owner had collected a rent overcharge in the amount of 
          $25,047.12 including interest on that portion of the overcharges 
          occurring on or after April 1, 1984.  A lawful rent of $280.74 was 
          determined for the lease term expiring November 30, 1987.

          In this petition, the owner contends in substance that the order 
          was an improper denial of its due process rights because it had 
          never been served with the complaint; that Herbert Charles & 
          Company was the managing agent for the subject building from 
          January 1986 to April 1986; and that the owner only learned of the 
          proceeding when it received a copy of the order and the August, 
          1986 Notice of Pending Default from Herbert Charles and Company in 
          June 1987, after the order had already been issued.  The owner also 
          states that it is reviewing its files and will submit to DHCR 
          copies of relevant records, and requests that the Commissioner 
          accept such rent records and remand the proceeding for 
          consideration of such records.  The owner also contends that since 
          it did not collect rent from the tenant until it purchased the 
          building in January, 1986, it should not be responsible for 
          overcharges prior to that date.  

          In a letter dated October 1, 1987, the tenant informed the DHCR 
          that she was vacating the subject premises.

          In answer to the owner's petition, the tenant states that the owner 
          has not asserted any defense to the overcharge claim.

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          In a supplement to its petition dated March 9, 1988, the owner 
          claims it was only required to maintain rent records from April 
          1981, four years prior to the most recent registration at the time 
          the owner bought the subject building.

          By notice dated, July 30, 1991, the owner was requested to submit 
          a complete rental history for the subject apartment from June 30, 

          The owner subsequently made several requests for an extension of 
          time to prepare a response, but failed to submit the requested 
          rental history.

          By notice dated June 29, 1992, the owner served with a copy of the 
          tenant's complaint and was again requested to submit rent records 
          from June 30, 1974 in order to avoid a default.

          In a response from the owner's attorney, dated July 13, 1992, the 
          DHCR was informed that the owner had sold the subject building at 
          least three years ago.  The owner's attorney suggested that the 
          request for rental data and all other correspondence be sent to the 
          new owner.

          The Commissioner is of the opinion that this petition should be 
          granted in part.

          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 to date and produce them to the DHCR upon 
          demand.  If the apartment was decontrolled from the Rent Control 
          Law after June 30, 1974, the owner must provide satisfactory 
          documentary evidence of the apartment's date of decontrol and 
          submit a rental history from that date.

          Section 26-516 of the 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 4 years prior to the most recent 
          registration, and concomitantly, established a 4 year limitation on 
          the calculation of rent overcharges.

          In the instant case, the petitioner owner, who has since sold the 
          building, has not provided a complete rental history as mandated by 
          Section 42A.  Although the owner claims, in a supplement to the 
          petition dated March 9, 1988, that, since the most recent 
          registration at the time it bought the building in January, 1986, 
          was for April, 1985 it is only required to maintain records for the 
          prior four years, i.e. April, 1981, the instant case is governed 
          rather by the stricter demands of Section 42A because the tenant's 
          complaint was filed prior to April 1, 1984, when the earlier 
          version of the Code was in effect.  Petitioner's contention that it 
          was denied due process by not being served with the complaint is 

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          also without merit, since the owner has now been served with the 
          complaint and afforded an opportunity to submit the required rent 
          records, but has failed to do so.  Petitioner gives no reason to 
          believe that actual service of the complaint prior to the issuance 
          of the order would have avoided the default.  

          Accordingly, the Rent Administrator's order establishing the lawful 
          stabilization rent utilizing the Section 42A default procedure and 
          finding a rent overcharge was warranted.

          However, the Commissioner grants the petitioner's request that the 
          order be amended to reflect petitioner's proportionate share of 

          Section 2526.1(f) of the current Rent Stabilization Code provides 
          in pertinent part that for overcharges collected prior to April 1, 
          1984, an owner will be held responsible only for his or her portion 
          of the overcharges in the absence of collusion or any relationship 
          between such owner and any prior owner.

          Section 2526.1(f)(2) provides that for overcharge complaints filed 
          or overcharges collected on or after April 1, 1984, a current owner 
          shall be responsible for all overcharge penalties, including 
          penalties based upon overcharges collected by any prior owner.

          An examination of the records in this case discloses that the owner 
          herein first acquired ownership of the subject premises in January, 
          1986 and that there is no evidence of any collusion between the 
          owner herein and any prior owners.  Therefore, in accordance with 
          the above provisions of the Code, the owner herein bears no 
          liability for overcharges collected prior to April 1, 1984.  The 
          owner is jointly and severally liable with prior owners for 
          overcharges of $9760.40, representing overcharges occurring from 
          April 1, 1984 to December 31, 1985, and is solely liable for 
          overcharges of $8069.83, representing overcharges occurring from 
          January 1, 1986 to May 31, 1987.  As so limited, the current 
          owner's total liability is reduced to $17,830.23.  Excess security 
          has not been included in the owner's overcharge liability as the 
          tenant has vacated the apartment.

          Since the prior owner or owners were not named by the Administrator 
          in his order, no directive to refund against the prior owner or 
          owners is included herein.  This order is issued without prejudice 
          to the owner's rights, if any, to commence an action against the 
          other prior owners for such overcharges reimbursed by the owner 
          which were collected by the prior owners.

          Because this determination concerns lawful rents only through      
          May 31, 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 any adjusted rents with this 
          order and opinion being given as the explanation for the 

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          adjustment.  A copy of this order and opinion is being sent to the 
          tenant in occupancy of the subject apartment.

          As to the overcharge liability of the petitioner-owner, 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 

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

          ORDERED, that this petition for administrative review be, and the 
          same hereby is, granted in part, and, that the order of the Rent 
          Administrator be, and the same hereby is, modified in accordance 
          with this order and opinion. 


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner


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