ADM. REVIEW DOCKET NO.: BI 410300 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.: BI 410300 RO
D.R.O. DOCKET NO.:
: L 3111649 R
REBA SHABOT,
PETITIO
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On September 28, 1987, the above-named petitioner-owner filed
a Petition for Administrative Review against an order issued on
August 28, 1987, by the District Rent Administrator, 10 Columbus
Circle, New York, New York, concerning housing accommodations
known as Apartment 4A at 203 West 94th Street, New York, New York,
wherein the District Rent Administrator determined that the tenant
had been overcharged.
The Commissioner notes that this proceeding was initiated
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 Commissioner has reviewed all of the evidence in the
record and has carefully considered that portion of the record
relevant to the issues raised by the administrative appeal.
This proceeding was originally commenced by the filing of a
rent overcharge complaint by the tenant with the New York City
Conciliation and Appeals Board, one of the predecessor agencies to
the DHCR. The tenant took occupancy pursuant to a lease
commencing August 1, 1980 and expiring July 31, 1981 at a monthly
rent of $600.00.
In Order Number CDR 31,236, the District Rent Administrator
determined the lawful stabilized rent utilizing the default
procedure based on the owner's failure to submit a complete rental
history for the subject apartment, determined that the tenant had
been overcharged in the amount of $4,144.70, including interest on
overcharges collected on or after April 1, 1984, and directed the
ADM. REVIEW DOCKET NO.: BI 410300 RO
refund of such amount to the tenant.
In this petition, the owner contends that the District Rent
Administrator's order is arbitrary, capricious, unreasonable and
confiscatory; that the Administrator's order states that the rent
would be determined under method number 1 of the default
procedure, but this was not the case; that similar apartments in
the area rent for at least $1,000.00; that the tenant is
collecting at least $650.00 from people who use and occupy two
rooms of the apartment; that interest should not be imposed
because the owner has shown good faith by paying lump sums to the
tenant pending determination of the petition; and that the
Administrator's rent calculation ends on September 30, 1984 and
does not include a two year renewal lease from October 1, 1984 to
September 30, 1986 at a monthly rent of $684.95. The owner also
submits with this petition a statement dated March 12, 1987 signed
by the parties indicating that the parties had reached a
settlement and requesting withdrawal of the tenant's overcharge
complaint.
The Commissioner is of the opinion that this petition should
be granted in part.
Section 2520.13 of the Rent Stabilization Code provides that
a tenant may withdraw any complaint pending before the DHCR based
upon a negotiated settlement between the parties and with the
approval of the DHCR or a court of competent jurisdiction where
the tenant is represented by counsel.
In this case, the owner submits a copy of a settlement
agreement with its petition but offers no explanation for not
having submitted this document to the Administrator. Moreover,
the settlement as stated in the agreement does not meet the
requirements of Section 2520.13 of the Rent Stabilization Code in
that it was not entered into with the approval of the DHCR or a
court of competent jurisdiction where the tenant was represented
by counsel. Therefore this settlement will not be accepted.
Section 42A of the Rent Stabilization Code requires that an
owner retain complete rent records for each stabilized apartment
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, 2974, the owner must provide satisfactory
documentary evidence of the apartment's date of decontrol.
DHCR has adopted a procedure for determining an apartment
rent where an owner does not provide a complete rent history of
the apartment. In such cases the rent is calculated to be the
lowest of the following amounts: 1) the lowest stabilized rent
for a similar apartment with the same number of rooms; 2) the
current tenant's initial rent minus a guideline and vacancy
allowance; 3) the prior tenant's last rent, if known.
ADM. REVIEW DOCKET NO.: BI 410300 RO
A review of the record in the instant case discloses that the
Administrator properly implemented the default procedure as a
result of the owner's failure to provide a complete rent history.
While the Administrator's order incorrectly states the method
1 would be utilized, the Administrator properly utilized method 2
(the tenant's initial rent minus a guideline and vacancy
allowance) which resulted in the lowest rent. Therefore no
modification of the Administrator's rent calculation is warranted.
The Commissioner finds that the rents for similar apartments
in this area, as well as the owner's unsupported allegations
regarding the tenant's collection of rent from other parties, have
no bearing on the determination of the lawful stabilized rent
pursuant to the default procedure.
Section 216-516 of the Rent Stabilization Law provides that
where an owner has been found to have overcharged a tenant, treble
damages shall be imposed unless the owner establishes by a
preponderance of the evidence that the overcharge was not willful,
in which case interest shall be imposed.
The Commissioner finds that the owner's contention that it
acted in good faith has no bearing on the imposition of interest,
which is mandated by law. Therefore the imposition of interest in
this case is affirmed.
The Administrator's issued August 28, 1987 includes a rent
calculation up to September 30, 1984. In its petition, the owner
advises that the tenant was given a two year renewal lease from
October 1, 1984 to September 30, 1986 at a monthly rent of
$684.95. The Commissioner finds that the rent for this lease term
did not exceed the lawful guideline increase over the lawful
stabilized rent established by the Administrator for the prior
lease and therefore the tenant was not overcharged for this lease
term.
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 District Rent Administrator's order be
and the same hereby is modified to the extent hereinabove
indicated.
ISSUED:
ADM. REVIEW DOCKET NO.: BI 410300 RO
ELLIOT SANDER
Deputy Commissioner
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