STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X SJR No. 6386
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEALS OF DOCKET NO.BL410146RT
: and BL410307RO
David J. Fleming, Tenant DRO DOCKET No.
& Putmam Realty Co, Owner L3112254RT
ORDER AND OPINION GRANTING OWNER'S PETITION FOR ADMINISTRATIVE
REVIEW IN PART
AND GRANTING TENANT'S PETITION FOR ADMINISTRATIVE REVIEW
The above-named parties filed two separate petitions for
administrative review on December 1, 1987 and December 23, 1987,
respectively, of an order issued on November 18, 1987 by a District
Rent Administrator concerning the housing accommodation known as
Apartment 6-H, 65 Morton Street, New York, New York, wherein the
Administrator determined that the owner had overcharged the tenant.
The Commissioner is consolidating these petitions and this order
and opinion shall be dispositive of both.
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 appeals.
This proceeding was commenced on March 29, 1984 upon the filing of
a rent overcharge complaint. The tenant stated that he took
occupancy of the subject apartment on or about March 15, 1976 at
monthly rent of $295.00.
In answer, the owner alleged that as a result of vacancy decontrol
the base date for the subject apartment was November 1, 1974.
On October 26, 1984, the Division of Housing and Community Renewal
(DHCR) mailed to the owner a notice requesting that the owner
submit to the rent agency "a DC-1 or DC-2 Notice of Initial Legal
Regulated Rent or Apartment Registration Form RR-1" that was served
on the first stabilized tenant or subsequent tenants, along with
proof of mailing.
The owner attached to letters dated November 5, 1984, and October
9, 1985, a copy of a certified mail postal receipt signed by the
alleged first rent-stabilized tenant. No copy of the DC-2 notice
On October 5, 1987, the Administrator sent to the owner a "Final
Notice of Pending Default" which rerequested adequate proof of the
The owner did not respond to this notice.
In the order of November 19, 1987, the Administrator determined
that the tenant's initial legal regulated rent was $251.06,
pursuant to D.H.C.R's default procedure, and directed a refund of
$5,286.22 for overcharges accruing through March 31, 1983,
including excess security.
In its petition for administrative review, under Docket No.
BL410307RO, the owner asserted that it "made a complete submission,
including the initial lease for the subject apartment and proof of
service of the required DC-2 upon the initial rent-stabilized
tenant." With its petition the owner submitted leases of the
alleged initial rent stabilized tenant of the subject apartment for
the period from November 1, 1974 through October 31, 1976.
In an order issued on March 13, 1992, the Commissioner denied the
owner's petition for administrative review on the basis of the
owner's failure to adequately prove the base date. The owner only
submitted to the Administrator an alleged copy of the certified
mail receipt signed by the alleged first rent stabilized tenant of
the subject apartment. However, the owner failed to submit a copy
of the DC-2 notice itself, a copy of any report of decontrol or a
copy of the relevant rent ledgers. Accordingly, the
Administrator's determination of the complainant's initial legal
regulated rent by using the DHCR's default procedure was found to
In his petition for administrative review the tenant, under Docket
No.BL410146RT, requested an updating of the overcharges because the
Administrator's calculations only went through March 30, 1983. The
Commissioner on March 13, 1992 granted this petition for
administrative review because the tenant had provided the
Administrator in the proceeding below with updated rental data.
Treble damages were assessed on all overcharges occurring after
April 1, 1984. Additionally, other minor adjustments were made in
the calculations and the Commissioner's order of March 13, 1992
concluded that the total overcharges through October 31, 1987 were
Subsequently, the owner filed a petition in the Supreme Court
pursuant to Article 78 of the Civil Practice Law and Rules seeking
judicial review of the Commissioner's order of March 13, 1992.
On consent, the case was remitted for further processing. The
basis for this agreement was that the record did not adequately
reflect service on the owner of the "Final Notice of Pending
Default." To insure that the owner's due process rights were fully
protected the owner was given a final opportunity to produce
adequate proof of the base rent date and thus avoid default.
In the owner's supplemental pleadings dated May 11, 1993 and June
30, 1993, the owner supplied the DHCR with rent ledgers which
covered the period from April 1974 (the final date that DHCR
records reflect rent control activity in the subject apartment) and
November 1974 (the date that the first stabilized tenant allegedly
The owner was also given the opportunity to submit a complete
rental history from the alleged base date of November 1, 1974
through the date of the Administrator's order of November 18, 1987.
The owner's response to the request for a lease history was that by
combining the Administrator's order of November 18, 1987 and the
Commissioners order of March 13, 1992 the record already contained
a complete lease history.
The owner's supplemental pleadings were forwarded to the tenant.
After careful consideration, the Commissioner is of the opinion
that the owner's petition should be granted in part.
The Commissioner is of the opinion that the rent ledgers submitted
by the owner on June 30, 1993 adequately prove that the tenant in
occupancy of the subject apartment on April 1, 1974 was a rent
controlled tenant. The ledgers go on to indicate that the rental
amount collected by the owner for the subject apartment remained
the same through October of 1974. Further, the ledger sheet for
the subject apartment has the name of the rent controlled tenant
with a line through it, the name of the first rent stabilized
tenant substituted and the letters "D/C" plainly displayed. The
owner asserts that the letters "D/C" denotes that the subject
apartment was then decontrolled.
Accordingly, the Commissioner concludes that the owner has
adequately proven that the base date for the subject apartment was
November 1, 1974. Since the record contains a complete lease
history from November 1, 1974, the default method for the
computation of overcharges may not be employed.
However, the recomputation of the rental history of this apartment,
as indicated in the attached calculation chart, shows that an
The Commissioner notes that the unusual rent history as reflected
in the calculation chart is tenant supplied and without
contraindication by the owner.
The Commissioner is of the opinion that the tenant's petition
should be granted.
As stated in the Commissioner's prior order of March 13, 1992, the
Administrator should have updated the overcharges through October
31, 1987. The Administrator requested updated rent information
from the tenant and received a response. This response was then
forwarded to the owner who did not challenge the accuracy of the
rent figures supplied by the tenant.
The Commissioner notes that in the "Final Notice of Pending
Default," dated October 5, 1987, the owner was informed that treble
damages "will be imposed on any overcharge occurring after April 1,
1984 for which the owner fails to satisfy the Division that the
overcharge was not willful." It is noted that although the owner
claimed it was not served with this notice in the proceeding before
the Rent Administrator, it was served with said notice
during the appeal processing when it was again afforded an
opportunity to submit a complete rental history. As the owner did
not establish that the overcharges collected were not willful, the
Commissioner finds that treble damages should be assessed as to
overcharges collected after April 1, 1984.
The owner is directed to reflect the findings and determinations
made in this order on all future registration statements, including
those for the current year if not already filed, citing this Order
as the basis for the change. Registration statements already on
file, however should not be amended to reflect the findings and
determinations made in this order. The owner is further directed
to adjust subsequent rents to an amount no greater than that
determined by this order plus any lawful increases.
The Commissioner has determined in this Order and Opinion that the
owner collected overcharges of $4,604.38. This Order may, upon
expiration of the period for seeking review of this Order and
Opinion pursuant to Article Seventy-eight of the Civil Practice Law
and Rules, be filed and enforced as a judgment or not in excess of
twenty percent per month of the overcharge may be offset against
any rent thereafter due the owner. Where the tenant credits the
overcharge, the tenant may add to the overcharge, or where the
tenant files this Order as a judgment, the County Clerk may add to
the overcharge, interest at the rate payable on a judgment pursuant
to Section 5004 of the Civil Practice Law and Rules from the
issuance date of the Rent Administrator's Order to the issuance
date of the Commissioner's Order.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
ORDERED, that the owner's petition for administrative review be,
and the same hereby is, granted in part, and the tenant's petition
for administrative review be, and the same hereby is, granted and
the Administrator's order be, and the same hereby is, modified in
accordance with this order and opinion.
JOSEPH A. D'AGOSTA