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. BA410253RO(Reopened)
: DISTRICT RENT OFFICE
DOCKET NO. L3111091R
David C. Gold, CDR28415
TENANTS: Penny Creech &
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On January 22, 1987, the above-named petitioner filed a Petition for
Administrative Review against an order issued on December 19, 1986, by
the District Rent Administrator, 10 Columbus Circle, New York, New York,
concerning the housing accommodations known as 235 East 4th Street,
New York, New York, Apartment No. 2B, wherein the District Rent
Administrator determined that the tenants had been overcharged.
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, 1987.
The issue in this appeal is whether the District Rent Administrator's
order was warranted.
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 in March, 1984 of
a complaint, dated June 28, 1983, by Penny Creech, naming Albert Garcia
and David C. Gold at 501 5th Avenue as the owners, stating that she had
commenced occupancy on May 3, 1983 at a rent of $321.00 per month, and
contending that the rent should be returned to the rent controlled rent
since the owner had been expelled from the rent stabilization system.
By complaint dated February 14, 1984 Penny Creech and Laura Yaccarino
filed another complaint naming only Alberto Garcia at 235 East 4th
Street as the owner. Both complaints were received on March 28, 1984
and given the same docket number.
The copy of the complaint sent to Alberto Garcia at 235 East 4th Street
was returned by the Postal Service. A copy sent to 501 Fifth Avenue was
not returned. On May 9, 1986 a Final Notice of Pending Default was sent
to Irar Properties at 95 Delancey Street. No replies were received from
anyone in the proceeding except the tenants.
In an order issued on December 19, 1986 the Administrator, using DHCR
default procedures, found an overcharge of $2,587.50 from May 3, 1983 to
May 2, 1984. The order named Irar Properties at 95 Delancey Street as
the owner, and Albert Garcia and David Gold at 501 Fifth Avenue as the
prior owner. It stated that "the former owner is directed to make full
refunds to the tenant for any rent collected by it in excess of the
lawful stabilized rent, during the period between May 3, 1983 and the
date that it sold the subject building."
The copy of the order sent to Irar Properties was returned by the Postal
Service stamped "Addressee Unknown" after someone wrote "Send to new
owner" on the envelope.
In this petition, David C. Gold by his attorney contends in substance
that he was never the owner of the subject premises; that, at most, the
firm of David C. Gold & Company Real Estate, Inc. was a former managing
agent of the building for a short time; that 235 East 4th Street Realty
Corp. was the former owner; and that the order should be revoked. The
501 Fifth Avenue address of David Gold's attorney is the same address
given on one of the complaints as the owner's address.
In answer, one tenant asserts in substance that the Administrator's
order should stand against Alberto Garcia of 235 East 4th Street Realty
Corp., Inc., and Malekan, President of Irar Properties, Inc.; that the
order should be modified against David C. Gold and Company, since the
tenants never listed in their complaint that David C. Gold was owner of
235 East 4th Street Realty Corp.; that Alberto Garcia owned and managed
the property for a number of years prior to selling it to Irar
Properties on November 26, 1984; that he initiated the overcharge, which
was continued by Irar Properties; that both continued the overcharge
despite being notified of it; and that the order should not be revoked
just because of a mistake regarding David C. Gold's relationship to 235
East 4th Realty Corporation, Inc.
The Commissioner is of the opinion that this petition should be denied.
Section 2520.6(i) of the Rent Stabilization Code in pertinent part
defines an "owner" as:
A fee owner, lessor, sublessor, assignee, net lessee, or a
proprietary lessee of a housing accommodation in a structure
or premises owned by a cooperative corporation or association,
or an owner of a condominium unit or the sponsor of such
cooperative corporation or association or condominium
development, or any other person or entity receiving or
entitled to receive rent for the use or occupation of any
housing accommodation, or an agent of any of the foregoing...
A managing agent receiving rents is therefore an owner for the purposes
of the Rent Stabilization Code.
Section 2526.1(f) of the Rent Stabilization Code provides in substance
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; and that for 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.
Although the initial registration shows Irar Properties, Inc. as being
the owner on April 1, 1984, the petitioner submitted a deed showing that
235 East 4th Street Realty Corp. sold the property to Irar Properties,
Inc. on November 26, 1984. Pursuant to Section 2526.1(f) David C. Gold
& Company Real Estate, Inc. is liable to the tenants for overcharges
which it actually collected prior to April 1, 1984, and although David
C. Gold & Company may be able to claim indemnification from the fee
owner at the time for any such refund it makes to the tenants. For
overcharges which David C. Gold & Company may have collected on and
after April 1, 1984 it is jointly and severally liable with the current
owner. Since the current owner may have already made a refund to the
tenants for part or all of the overcharge award, this order is without
prejudice to any action that the current owner may have against the
petitioner for overcharges reimbursed by the current owner which the
petitioner had collected.
The Commissioner notes that the subject apartment has not been
registered since 1984, and that the tenants moved to Apartment 3B in
1985 or 1986. (The exact date is unknown since neither apartment 3B nor
any other apartment in the building was registered in 1985.)
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, denied and that
the Rent Administrator's order be, and the same hereby is, affirmed.
JOSEPH A. D'AGOSTA