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STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. BG 410044 RO
: DISTRICT RENT OFFICE
Harvey Sorkin, DOCKET NO. TC 076846-G
TENANTS: Michelle Tonjes
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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
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
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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