DOC. NO.: BJ 410122-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 DOC. NO.: BJ 410122-RO
D.R.O. DOC.: 47021
THE GREENWICH CO., A LIMITED :
PARTNERSHIP, c/o ENGELMAN & CO.
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On October 13, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review of an order issued on September
16, 1987, by the Rent Administrator, 10 Columbus Circle, New York,
N.Y. concerning housing accommodations known as Apartment 2N at 50
East 8th Street, New York, New York wherein the Rent Administrator
determined that the tenant had been overcharged.
The issue in this appeal is whether the 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
issues raised by the administrative appeal.
This proceeding was originally commenced by the filing of a
Tenant's Objection to Rent/Services Registration on August 29,
1984. The tenants took occupancy pursuant to a lease commencing
November 1, 1981 and expiring on October 31, 1984 at a monthly rent
of $479.02. By their filing, the tenants claimed, among other
things, that the rent being paid was an overcharge and that air
conditioner electricity was included in the rent at a monthly
charge of $15.00.
The owner was served with a copy of the complaint, and was afforded
an opportunity to answer and to submit rent records to prove the
lawfulness of the rent being charged. In answer to the
complaint, the owner supplied the lease in effect on April 1, 1980,
the base rent date, and all leases subsequent thereto. The
owner also submitted a photocopy of the paid bills for a stove and
refrigerator. The owner confirmed that the tenant was charged
$15.00 per month for the tenant-installed air conditioner unit.
DOC. NO. BJ 410122-RO
By order dated September 16, 1987, under Docket No. 47021, the
District Rent Administrator determined, among other things, that
the owner had overcharged the tenant in the amount of $1459.54,
including a penalty of treble damages on overcharges collected from
April 1, 1984 to March 31, 1986, based on the owner's failure to
establish lack of willfulness. The Administrator further
determined that the air conditioner charge for 1981 was $13.27, and
is part of the base rent, subject to annual guidelines increases
and that the charge is to be dropped from the base rent upon
removal of the air conditioner.
In this petition, the owner, by its agent contends that the
District Rent Administrator's order should be modified to reflect
that the equipment cost was $652.75, not $625.69, as found by the
Administrator; that to the best of his recollection, the owner
called DHCR for guidelines regarding the air conditioner charge,
and was told that $15.00 per month was the correct figure; that the
difference of $1.73 between the lawful air conditioner charge and
the amount charged by the owner indicates that this was not a
willful overcharge; and that the overcharge for the apartment was
not willful, but the result of errors in computation. With the
petition the owner's agent and his secretary submitted affidavits
that the error was inadvertent clerical error.
In response to the owner's petition, the tenants contend, among
other things, that the surcharge for the appliances should not have
included the sales tax; that they never requested a larger
refrigerator; that the overcharge was willful; that the air
conditioner surcharge originally offered, and upon which
representation they relied, was $5.00, and that the owner was
estopped from charging more than that sum; that the 1984 renewal
offer accepted by the tenants should have been treated as a binding
contract, and the rent increase based on it; and that interest
should be assessed on all overcharges preceding April 1, 1984, and
from September 16, 1987 to the date the owner actually refunds all
overcharges.
The Commissioner is of the opinion that this petition should be
denied.
Section 2526.1 of the Rent Stabilization Code provides, in
pertinent part: "A penalty of three times the overcharge may not
be based upon an overcharge having occurred more than two years
before the complaint is filed, or upon an overcharge which occurred
prior to April 1, 1984....
With regard to the owner's assertion that the monthly appliance
increase should have been based on $652.75, the Commissioner finds
DOC. NO. BJ 410122-RO
that the owner is correct and that the Administrator selected an
incorrect figure from the invoice. However, a review of the record
indicates that the Administrator failed to correctly apply the
statutory penalty of treble damages by limiting treble damages to
two years following April 1, 1984. Application of the correct
processing procedures, recomputing all overcharges and penalties,
would more than negate any benefit to the owner based on the
argument raised by the owner in its petition. As such, and in the
absence of a timely petition for administrative review by the
tenants, the Commissioner finds it appropriate to deny this portion
of the owner's appeal.
Concerning the owner's allegation that it charged the $15.00/month
air conditioner surcharge based on a telephone conversation with a
Division employee, the Commissioner finds that this unsupported
allegation lacks probative value, and is without merit on the issue
of establishing the owner's lack of willfulness. Equally lacking
conclusory weight are the owner's statements that the overcharge
was not willful, and the affidavits to that effect by the owner and
its employee, submitted for the first time on appeal. The self-
servicing nature of these documents renders them valueless as
evidence that the overcharge was not willful. Further, the
allegation of the owner that the error was inadvertent clerical
error, inadequate to overcome the presumption of willfulness. The
owner failed to establish a lack of willfulness; therefore, the
Commissioner finds that the imposition of treble damages was
warranted.
Regarding the allegations of the tenants in their answer, the
Commissioner finds that the appropriate vehicle for these arguments
would have been the filing by the tenants of their own petition for
administrative review; they may not be raised in answer to the
owner's petition for administrative review. However, it is noted
that the allowable increase for improvements pursuant to Section
2522.4 of the Rent Stabilization Code is 1/40 of the total cost,
including sales tax; and that the penalty of interest, pursuant to
Section 2526.1 of the Rent Stabilization Code, is established from
the date of the first overcharge on or after April 1, 1984.
This order may, upon the expiration of the period for seeking
review pursuant to Article Seventy-Eight of the Civil Practice
Law and Rules, be docketed and enforced in the manner of a judgment
of the Supreme Court. The total overcharge is $1459.54.
Because this determination concerns lawful rents only through
September 30, 1987, the owner is cautioned to adjust subsequent
rents to an amount no greater than that determined by this order
plus any lawful increases, and to register any adjusted rents with
DOC. NO. BJ 410122-RO
this order and opinion being given as the explanation for the
adjustment. A copy of this order and opinion is being sent to the
current occupant of the subject apartment.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is
ORDERED, that this petition be and the same hereby is, denied, and
the District Rent Administrator's order be and the same hereby is
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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