BA610100RT
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. BA610100RT
: DISTRICT RENT OFFICE
Richard Sperber, DOCKET NO. 28070
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On December 23, 1986, the above-named petitioner-tenant filed a Petition
for Administrative Review against an order issued on November 21, 1986,
by a Rent Administrator concerning the housing accommodations known as
3451 Giles Place, Bronx, New York, Apartment No. L-2, wherein the Rent
Administrator determined that the tenant had not been overcharged.
The Administrative Appeal is being determined pursuant to the provisions
of Section 2526.1 of the Rent Stabilization Code.
The issue herein is whether the 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 on September 24, 1984 by the
filing of a timely objection to the initial registration, claiming that
the initial registered rent was an overcharge. The tenant assumed
occupancy in April, 1979 pursuant to a two year lease at a rent of
$170.00 per month.
In answer to the complaint, the owner submitted the tenant's initial
lease and a statement of the subsequent lease history. The answer
stated that the rent was increased to $188.70 per month effective June
1, 1981, until March 31, 1983, when it was increased to $205.00 "as per
HPD guidelines," and then to $233.45, for the two year term from July 1,
1985 to June 30, 1987. The tenant's initial lease and the lease
commencing on July 1, 1985 were the only leases submitted by the owner.
In Order Number 28070, issued on November 21, 1986, the Rent
Administrator determined that there was no overcharge. The period of
BA610100RT
review of the order commenced with the determination of a base rent of
$205.00 per month effective April 1, 1983, "as established by HPD." The
tenant's subsequent rent of $233.45 was also determined to be the lawful
rent.
In his petition, the tenant contends that the owner overcharged him
since raising his rent without a lease to $188.00 per month, in 1981,
and that the initial registered rent of $205.00 per month was also an
overcharge, as it was incorrectly determined by HPD. Specifically, the
tenant contends that the rent that was set by HPD was based on a formula
of $82.00 per room per month and that, since the apartment is only two
rooms, the initial rent should have been $164.00 per month. However,
HPD incorrectly stated that the apartment consisted of 3 rooms, and set
an initial rent of $246.00 per month. The tenant further stated that
the owner, in response to a letter from the tenant challenging the room
count, agreed to a rent based on 2 1/2 rooms, which computed to an
initial rent of $205.00 ($82.00 x 2.5 = $205.00), which was the amount
charged the tenant. With his petition, the tenant submitted a copy of
an HPD Order and Report of Setting of Initial Regulated Stabilized Rent
pursuant to Article 15 of the Public Housing Finance Law and
accompanying letter from the HPD Office of Rehabilitation establishing
the post-rehabilitation initial legal rent for the subject apartment at
$246.00 ($82.00 per room per month x 3). Finally, the tenant states
that the rent increase for the lease commencing on July 1, 1985 was also
illegal becuase the owner had not registered the apartment with the
DHCR, as shown by the enclosed copy of the Notice to Owner of Failure to
Register Apartments Buildings, dated August 5, 1986.
The Commissioner is of the opinion that this petition should be granted
in part.
Section 2526.1(a)(3)(ii) of the Rent Stabilization Code provides that as
to complaints filed within 90 days of the initial registration of a
housing accommodation, the legal regulated rent for purposes of
determining an overcharge shall be deemed to be the rent charged and
paid on April 1, 1980, or for a housing accommodations not required to
be registered by June 30, 1984, four years prior to the date the housing
accommodation was first required to be registered (or if the housing
accommodation was subject to the RSL and this Code for less than four
years prior to such initial registration, the initial regulated rent)
plus in each case, any lawful increase and adjustments.
In the instant case, the tenant filed a timely objection to the April 1,
1984 initial registered rent of $205.00 per month and checked that the
complaint was for rent overcharge. In processing such a complaint, it
is proper to review the rent history over the four year period prior to
the initial registration from April 1, 1980, as stated above. The
Administrator erred in this case by restricting the period of review to
the lease history after the initial rent set by HPD and found no
overcharges. In fact, however, an overcharge occurred from June, 1981
through March, 1983, when the owner charged an $18.00 per month increase
over the previous rent but failed to offer the tenant a lease, which has
the effect of making such increase void. Overcharges for that period
amount to $396.00 ($18.00 x 22 = $396.00). The owner is directed to
refund that amount to the tenant.
With regard to the April 1, 1984 initial registered rent of $205.00 per
month, however, the Administrator properly held that such amount was not
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subject to review. The Department of Housing Preservation and
Development established the legal rent for the subject apartment
effective April 1, 1983 in conjunction with a rehabilitation loan under
terms governed by Article 15 of the Public Housing Finance Law and,
under Section 2521.1 of the current Rent Stabilization Code, such rent
is not subject to challenge through a DHCR proceeding. The tenant might
have more appropriately sought to challenge the HPD order with HPD, but
did not do so. It is noted that the owner voluntarily agreed to charge
the tenant less than the amount established by the HPD order and
registered such lesser amount ($205.00) with the DHCR and such amount
became the lawful initial registered rent for the subject apartment.
Finally, DHCR records establish that the owner had registered the
apartment with the DHCR, and thus the rent increase for the lease
commencing on July 1, 1985 was proper.
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 that the Rent Administrator's order be, and the same hereby is,
modified in accordance with this order and petition.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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