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 NO.: BA 210024-RO
:
RENT ADMINISTRATOR'S DOCKET
D.S.J. MANAGEMENT CORPORATION NO.: K 3104146-R
PETITIONER :
------------------------------------X TENANT: ISAAC KAMINSKY
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART
AND MODIFYING RENT ADMINISTRATOR'S ORDER
The above named petitioner-owner filed a timely Petition for
Administrative Review against an order of the Rent Administrator issued
September 25, 1986. The order concerned housing accommodations known as
Apartment 3E located at 3115 Brighton 6th Street, Brooklyn, New York. The
Administrator determined that the tenant had been overcharged and computed
the overcharge at $4205.64.
The Commissioner has reviewed the record and carefully considered that
portion relevant to the issues raised by that appeal.
The Commissioner notes that this proceeding was initiated prior to April
1, 1984. Sections 2526.1(a)(4) and 2521.1(d) governing rent overcharge
and fair market rent proceedings provide that determination of these
matters be based upon the law or code provisions 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 tenant commenced this proceeding on March 23, 1984 by filing a rent
overcharge complaint, in which he indicated that he moved into the subject
apartment on September 15, 1977 pursuant to a two year lease at a rental
of $200.00 per month. The tenant said the owner had refused to show him
prior leases and that he believed that the initial legal regulated rent
exceeded the fair market rent.
A copy of the complaint was sent on October 9, 1980 to the owner named by
the tenant on the complaint along with answer forms and a demand for
complete copies of all leases for the period from the base date to the
date on which the tenant took occupancy. The mailing was returned to DHCR
by the post office with the notation "attempted-not known". On February
24, 1986, the owner was sent at the same address a Final Notice of Pending
Default, advising the owner how the rent would be determined in the
absence of a rent history and explaining that treble damages would be
imposed if the owner did not establish that the overcharges were not
willful.
When no response was received, the lawful stabilized rent was established
by using default procedures developed pursuant to Section 42A of the
DOCKET NUMBER: BA 210024-RO
former Rent Stabilization Code. The owner was directed to refund $4205.64
in overcharges including treble damages on overcharges collected on or
after April 1, 1984.
Petitioner filed a petition for administrative review. That petition was
dismissed by the Commissioner on February 27, 1987. The Commissioner
noted that the petitioner had failed to timely file the petition.
Petitioner requested reconsideration of the Commissioner's order. Finding
that a change of ownership took place and that petitioner, the new owner,
was not properly notified of the Rent Administrator's order the
Commissioner granted reconsideration of this dismissal. The case was
reopened for decision on the merits.
In the petition, the owner argues that the Administrator's finding that
the owner was in default violates due process because the owner was never
served with the complaint and had no knowledge of the proceedings until
the tenant sent the owner a copy of the order. The owner also asserts
that the finding of an overcharge is erroneous because the complaining
tenant was the first stabilized tenant and his initial rent of $200.00 did
not exceed the fair market rent. Finally, the owner argues that treble
damages should not have been imposed because the owner has always charged
the proper and lawful rent. The owner includes its own version of the
lawful rents and actual rents charged since the commencement of this
tenant's occupancy.
After careful consideration of the evidence of record, the Commissioner is
of the opinion that the petition should be granted in part.
As noted in the reopening order, the Administrator did not serve the
correct owner with the complaint or the Final Notice of Pending Default
despite notice to the agency of the change in ownership. Because of this
error, the owner's answer to the complaint as contained in the petition
will be considered for the first time on appeal.
The Division's records confirm the tenant's statement in the complaint and
the owner's statement in the petition that the complaining tenant was the
first stabilized tenant after the apartment became decontrolled in 1977.
Converting the tenant's complaint to a fair market rent appeal results in
a determination that the initial rent of $200.00 does not exceed the fair
market rent as determined by adjusting the 1976 Maximum Base Rent of
$178.05 by the 20% special guideline stated in Rent Guidelines Order No. 9
A review of the subsequent increases reveals that the tenant was still
overcharged as shown on the rent calculation chart attached to and made a
part of this order. The Commissioner notes that the owner indicated in
its submission that the rent charged for the September 15, 1982 to
September 14, 1985 lease term was $273.69 while the tenant said in his
complaint that he paid $259.52. Since the Division's records reveal that
the owner registered the rent in 1984 as $259.54 and this is similar to
the tenant's number this is the amount that is used in the computations
herein.
Finally, Section 2526.1 of the Rent Stabilization Code provides for treble
damages unless the owner establishes by a preponderance of the evidence
that the overcharge was not willful. Since the overcharges herein are the
DOCKET NUMBER: BA 210024-RO
result of the incorrect application of guidelines increases, the
Commissioner finds that the owner has not established that the overcharge
was not willful. Accordingly, treble damages are warranted. The revised
overcharge is computed at $799.19.
If the owner had already complied with the Administrator's order and there
are arrears due the owner as a result of this order, the tenant may pay
off such arrears in twelve monthly installments. If the tenant vacates or
has already vacated the arrears are payable immediately.
This order may be enforced as a judgment after the time to file an Article
78 has expired or the tenant may deduct from future rent payments up to 20
percent of the total overcharge until the total amount is deducted.
The owner is directed to file amended registrations with this order as the
reason for the modification and to base all rents subsequent to the
October 1, 1985 to September 30, 1987 lease term on the amount determined
herein.
THEREFORE, in accordance with the Rent Stabilization Law and Code it is
ORDERED, that this petition be and the same hereby is granted in part and
the Administrator's order be and the same hereby is modified in accordance
with this order and opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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