BH 410080 RO
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. BH 410080 RO
: DRO DOCKET NO.L-3114609 R
NICHOLAS MATIRE TENANT; LISA MONHEIT
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART
On August 4, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on June
30, 1987, by the Rent Administrator, 10 Columbus Circle, New York,
New York, concerning the housing accommodations known as 325 West
100th Street, New York, New York, Apartment No. 1A, wherein the Rent
Administrator determined that the owner had overcharged the
tenant.
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
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 Administrative Appeal is being determined pursuant to the
provisions of Section 42A of the former Rent Stabilization Code
and Sections 2526.1 and 2527.8 of the current 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 by the filing in
March 1984 of a rent overcharge complaint by the tenant who first
moved to the two room subject apartment on July 1, 1978 at a
rental of $250.00 per month.
The owner was served with a copy of the complaint and was
directed to submit a complete rental history for the subject
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apartment from the base date including copies of all leases. The
owner was also informed that treble damages could be imposed on
rent overcharges collected on or after April 1, 1984. In a
response dated October 20, 1984, the owner stated that prior
tenant Reggie Holloway had possession of the subject apartment on
July 1, 1974 at a rental of $215.00 per month and that Mr.
Holloway's rent was then increased to $230.00 per month effective
July 1, 1976. In support of such contention, the owner submitted
copies of three rent receipts from Mr. Holloway for the subject
apartment. Such rent receipts were dated April 12, 1974, January
26, 1976, and April 12, 1978 and listed monthly rents of $200.00,
$215.00, and $230.00 respectively. In addition, the owner
submitted a copy of the complaining tenant's initial rent deposit
form dated June 12, 1978. On such form, the complaining tenant
listed Reggie Holloway as a reference and listed Mr. Holloway's
address as the subject premises. On March 25, 1986 and September
26, 1986, the owner was afforded additional opportunities to
submit a complete rental history including copies of leases and /
or rent ledgers for the period of Mr. Holloway's tenancy. No
further documentary evidence was submitted by the owner.
In Order Number CDR 27,253 issued on November 20, 1986, the
Rent Administrator determined that due to the owner's failure to
submit a complete rental history, the owner had collected a rent
overcharge of $2410.78 through June 30, 1984, determined the
lawful stabilization rent was $224.21 effective July 1, 1978 and
directed the owner to refund the overcharge to the tenant. Treble
damages were assessed on the overcharges occurring on and after
April 1, 1984.
On January 5, 1987, the tenant requested that the November
20, 1986 Rent Administrator's order be amended to update the
rental history and include overcharges occurring after June 30,
1984.
On April 30, 1987, the Rent Administrator issued a Notice of
Proceeding to Modify, Revoke or Affirm Order in which the parties
were advised that the Rent Administrator was reopening the
proceeding to issue an amended order to include the lease
effective July 1, 1984 to June 30, 1986 and affording the parties
an opportunity to comment.
On May 6, 1987, in response to the April 30, 1987 Notice, the
owner stated in substance that the order should not be modified on
the basis that the tenant has presented no new evidence, that in
fact there was no overcharge and in any event, any overcharge was
not willful.
On June 30, 1987, the Rent Administrator issued an Amended
Order Number CDR 27,253 to take into account rent overcharges
through June 30, 1987. In such amended order, it was specifically
stated that the rent receipts submitted by the owner were not
sufficient to establish the base rent of the subject
apartment. Total overcharges through June 30, 1987 were
determined to be $6510.24 including treble damages on all
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overcharges occurring on and after April 1, 1984.
In this petition, the owner alleges in substance that
although the owner does not have every rent record for apartment
1A, the owner in good faith believed that the rent charged to the
tenant herein was correct, that the imposition of treble damages
was not warranted, that subsequent to the issuance of the Rent
Administrator's original order, the owner attempted to refund
rent overcharges to the tenant, and that the tenant did not
request modification of the original order until after the time
the tenant could have filed a Petition for Administrative Review
had expired so that such request should have been denied. In
support of such contentions, the owner submitted a copy of a
letter dated May 4, 1987 sent to the tenant by the owner's
attorney. In such letter, it was stated that the owner would
refund to the tenant the amount of the overcharge determined in
the Rent Administrator's original order - $2410.78 plus
overcharges occurring from July 1, 1984 to November 30, 1986 but
without treble damages or interest.
In answer to the owner's petition, the tenant stated in
substance that the Rent Administrator's order was warranted in
that the overcharge was clearly willful, that no settlement was
ever reached, that the tenant should be awarded attorney's fees,
and that the owner waived his right to file an administrative
appeal because he did not file a timely appeal against the
original order finding a rent overcharge. Along with her answer,
the tenant submitted a copy of a letter she sent to the owner
dated January 5, 1987 in which she stated that as a result of the
Rent Administrator's original order, she was entitled to receive
from the owner the overcharge determined in such original order -
$2410.78 plus overcharges occurring from July 1, 1984 to December
31, 1986 including treble damages on the overcharges from July 1,
1984 to December 31, 1986.
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.
In the instant case, an examination of the records including
the copies of the rent receipts and the complaining tenant's
deposit form discloses that the owner in fact submitted a complete
rental history for the subject apartment from the base date as
mandated by Section 42A.
The Commissioner has recalculated the lawful stabilization
rents and the amount of the rent overcharge for the subject
apartment on the basis of the rental history submitted by the
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owner. The lawful stabilization rents and the amount of the rent
overcharge are set forth on the amended rent calculation chart
attached hereto and made a part hereof.
With regard to the imposition of treble damages, Section
2526.1 of the current Rent Stabilization Code provides in
pertinent part that any owner who is found by the DHCR to have
collected any rent or other consideration in excess of the legal
regulated rent shall be ordered to pay to the tenant a penalty
equal to three times the amount of such excess except that if the
owner establishes by a preponderance of the evidence that the
overcharge was not willful, the DHCR shall establish the penalty
as the amount of the overcharge plus interest from the date of the
first overcharge on or after April 1, 1984.
In the instant case, the owner has not submitted any evidence
to establish that the overcharge was not willful. In this
connection, it is noted that even after the issuance of the
original Rent Administrator's order on November 20, 1986, the
owner did not take immediate steps to reduce the tenant's rent in
accordance with such order or to refund the overcharge. It was
only after the proceeding was reopened that the owner
unsuccessfully tried to settle the matter with the tenant.
Accordingly, the imposition of treble damages was warranted.
With regard to the owner's contention that the proceeding
should not have been reopened and an amended order issued, it is
noted that Section 2527.8 of the current Rent Stabilization Code
provides in pertinent part that the DHCR, on application of
either party, or on its own initiative, and upon notice to all
parties affected, may issue a superseding order modifying or
revoking any order issued by it under this or any previous Code
where the DHCR finds that such order was the result of
illegality, irregularity in vital matters, or fraud. There is no
time limit imposed for the issuance of such superceding order. In
this case, the failure of the original order to include an
overcharge up to the issuance date of said order represents an
irregularity in a vital matter and the promulgation of an amended
order was therefore warranted.
With regard to the tenant's contention that attorney's fees
should be awarded, it is noted that the tenant did not file a
petition of her own regarding this issue as would be required for
a determination on the merits but merely raised it as part of her
answer to the owner's petition. Accordingly, no award of
attorney's fees can be made in this proceeding.
With regard to the tenant's contention that the owner waived
his right to file an administrative appeal against the amended
order herein because he did not file an appeal against the
original overcharge order, the Commissioner is of the opinion that
the issuance of the amended order was not merely an order
correcting a minor mistake, but was an order on the merits and
that the owner was entitled to file an appeal against such amended
order.
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Because this determination concerns lawful rents only
through June 30, 1987, the owner is cautioned to adjust subsequent
rents to an amount no greater than that determined by the Rent
Administrator's order plus any lawful increases, and to register
any adjusted rents with this order and opinion being given as the
explanation for the adjustment.
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, not in excess of twenty percent per month
thereof may be offset against any rent thereafter due the owner.
If the owner has already complied with the Rent
Administrator's order and there are arrears due to the owner as a
result of the instant determination, the tenant is permitted to
pay off the arrears in twenty four equal monthly installments.
Should the tenant vacate after the issuance of this order or have
already vacated, said arrears shall be payable immediately.
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. The lawful stabilization
rents and the amount of the rent overcharge are established on the
attached chart which is fully made a part of this order. The
amount of the rent overcharge including treble damages through
June 30, 1987, is $127.76.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
BH 410080 RO
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