ADM. REVIEW DOCKET NOS.: BA810106RO, ET AL.
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
------------------------------------X
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NOS.: BA810106RO,
BA810301RO, BA810112RT
ABC PROPERTIES,
PETITIONER-OWNER DISTRICT RENT OFFICE
DOCKET NO.: WLAR-86-S-6-R
RICHARD AND ROSALEEN MARI,
PETITIONER-TENANTS
------------------------------------X
ORDER AND OPINION DENYING TWO OWNER PETITIONS FOR
FOR ADMINISTRATIVE REVIEW AND DISMISSING ONE
TENANT PETITION FOR ADMINISTRATIVE REVIEW
These petitions have been consolidated as they involve common
issues of law and fact.
The above named petitioner-owner timely filed a Petition for
Administrative Review against an order issued on December 16, 1986
by the Rent Administrator, 55 Church Street, White Plains, New
York, concerning housing accommodations known as Apartment 324-D,
Larchmont Acres West, Larchmont, New York, wherein the Rent
Administrator determined that the tenants herein had been
overcharged. The petition received the first two docket numbers
captioned above. On January 23, 1987 the above named tenant-
petitioners field a Petition against the same order, receiving
docket number BA810112RT.
The issue in this appeal is whether the Administrator properly
disallowed rent increases taken by the owner on leases commencing
on or after October 1, 1985 but before September 30, 1986 because
the owner had failed to file certain required data to the
Westchester County Rent Guidelines Board by May 15, 1985.
The applicable sections of the Emergency Tenant Protection Act
(ETPA) are Sections 4 and 12 (8624 and 8632 in McKinney's
Unconsolidated Laws [Book 65]).
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 these administrative appeals.
ADM. REVIEW DOCKET NOS.: BA810106RO, ET AL.
In the Order herein under review, the Rent Administrator
determined that because the owner had filed the Maintenance and
Operating (M & O) Cost Survey after its May 15, 1985 due date, the
owner was ineligible to impose Rent Guidelines increases on leases
commencing during the 1985-1986 Rent Guidelines period.
In its petitions, the owner contends that the Rent
Administrator's Order is incorrect and should be modified because
the Board had no power to impose such a penalty for late filing and
secondly, even if the Board had such power, the penalty should not
be applied herein since the required Maintenance and Operating
schedule was submitted less than two weeks late. More
specifically, the owner argues that under ETPA the Board is
empowered to collect data and adopt guidelines for rent increases-
but has no authority to impose penalties. Therefore, the
Guidelines Order for the period in question "insofar as it purports
to bar an owner from collecting rent guidelines increases for an
entire year upon the late filing of an M & O Schedule is an
unlawful exercise of authority by the County Rent Guidelines
Board." (Emphasis in original.)
In addition, the owner contends that the penalty imposed by
the Board "is inconsistent with the spirit and intent of the ETPA
and the regulations promulgated thereunder." The owner supports
this contention by noting that under the Tenant Protection
Regulations (TPR) a failure to timely file a Certificate of
Services or an annual registration statement only results in an
owner being precluded from collecting rent increases until the
owner subsequently files the required documentation, at which point
the owner can collect the rent increases prospectively. Therefore,
the Board's penalty herein also should not penalize an owner beyond
the date of actual filing.
Accordingly, the owner contends the Administrator "erred by
imposing a rent overcharge penalty based upon an unlawful and
unenforceable resolution of the County Rent Guidelines Board."
Furthermore, the owner argues that neither the Board nor the
tenants have even asserted that they were prejudiced by the late
filing, whereas the prejudice to the owner is "severe," especially
since the lateness was not willful. The delay is alleged to have
been caused by "an office oversight" whereby the March 1985 letter
from the Board "did not come to the attention of...the owner's
managing partner until after the May 15th deadline, and as soon as
he became aware of it the Schedule was completed and filed by hand-
delivery." The owner's "good faith" is also said to be
demonstrated by the fact that all prior M & O schedules had been
filed on time.
In answer to these petitions the tenants argue that the
Administrator's Orders were correct and should be upheld.
ADM. REVIEW DOCKET NOS.: BA810106RO, ET AL.
On the merits, the tenants state the Board "does have the
express authority to adopt guidelines which bar the landlord from
collecting any increase for the period in question for failure to
timely file the Maintenance & Operating Expense Schedule."
The tenants contend that the M & O Schedule "is required on a
timely basis so that it may be analyzed by the Rent Guidelines
Board. And if by two days or by two weeks the landlord failed to
meet the deadline as required, he is in violation because the
financial data is not available to be included in the data used by
the Guidelines Board to determine increases."
The tenants further contend that the owner "made no attempt to
be excused for this failure. The landlord had several
opportunities to appear before the...Board to offer any and all
relevant facts and request that the...Board remove the landlord
from the [list of owners ineligible to take Guidelines increases
during the period in question]."
The Commissioner is of the opinion that the owner's petitions
should be denied and that the tenants' petition should be
dismissed.
At the outset, the Commissioner notes that the tenants'
petition was signed, notarized and postmarked on the 36th day after
the issuance of the Administrator's order, and was received by the
Division on the 38th day. Accordingly, their petition was untimely
under the applicable Regulations which provide that a Petition for
Administrative Review (PAR) must be filed within 35 days after the
date of issuance of the Administrator's order being appealed.
There is no provision under the applicable Regulations
permitting an extension of time for the filing of a PAR.
The Commissioner finds that the tenant-petitioners have failed
to comply with the requirements set forth above and that their PAR
must therefore be dismissed.
The Division is required to administer ETPA and, in
particular, to find an overcharge whenever an owner collects rent
in excess of the rent authorized under ETPA. For a rent to be
authorized, it must conform with the applicable Guidelines Board
Order. The Board Order in effect during the period in question in
this proceeding states, in part:
"The Board has determined that it will authorize no
rental adjustment for the class of housing
accommodations for which the owners have failed to
submit or timely submit required data to the Board
ADM. REVIEW DOCKET NOS.: BA810106RO, ET AL.
and have failed to provide a legally acceptable
reason to be determined pursuant to the Board's
directive and resolutions and as implemented by
written notices to said owners sent by certified
mail."
Therefore, the Administrator was constrained, as is the
Commissioner, to find that the owner herein was not eligible to
impose a Guidelines rent increase during the period in question.
The Board is a quasi-legislative body and its rulings are not
subject to review by the Division. Accordingly, the owner can not
collaterally attack the Board's Order in a proceeding before the
Division. This Order is without prejudice to the owner's right to
challenge the Board's Order in a court of competent jurisdiction.
It is undisputed that the owner did not timely file the M & O
Schedule by May 15, 1985. Division records show that the Schedule
was received by the owner on March 13, 1985, two months before the
deadline. It was properly addressed and the return receipt was
signed. Prior to the issuance of the Administrator's Order, a DHCR
staff person confirmed that the person who signed the receipt was
an employee of the owner. The owner does not dispute that the
receipt was signed by an employee of the owner. Instead, the owner
contends in its Petition that "[t]hrough an office oversight, the
matter did not come to the managing partner's attention at ABC
Properties until after the May 15th filing deadline." If such an
excuse were deemed acceptable the deadline would have no meaning at
all.
ETPA Section 4 mandates the establishment of a Rent Guidelines
Board in each of the three ETPA countries and provides that each
Board
"shall establish guidelines for rent adjustments
which, at its sole discretion may be varied and
different for and within the several zones and
jurisdictions of the board, and in determining
whether rents for housing accommodations as to
which an emergency has been declared pursuant to
this act shall be adjusted, shall consider among
other things (1) the economic condition of the
residential real estate industry in the affected
area including such factors as the prevailing and
projected (i) real estate taxes and sewer and water
rates, (ii) gross operating maintenance costs
(including insurance rates, governmental fees,
cost of fuel and labor costs), (iii) costs and
availability of financing (including effective
rates of interest), (iv) overall supply of housing
ADM. REVIEW DOCKET NOS.: BA810106RO, ET AL.
accommodations and over-all vacancy rates, (2)
relevant data from the current and projected cost of
living indices for the affected area, (3) such other
data as may be made available to it. As soon as
practicable after its creation and thereafter not later
than July first of each year, a rent guidelines board
shall file with the state division of housing and
community renewal its findings for the preceding
calendar year, and shall accompany such findings with
a statement of the maximum rate or rates of rent
adjustment, if any, for one or more classes of
accommodation subject to this act, authorized for
leases or other rental agreements commencing during
the next succeeding twelve months. The standards for
rent adjustments may be applicable for the entire
county or may be varied according to such zones or
jurisdictions within such county as the board finds
necessary to achieve the purposes of this subdivision."
(Emphasis added.)
As stated above, the Division does not have the power to
review the Board's Orders. Nevertheless, the Commissioner notes
that the Board has the power to establish different rent increase
rates, or no rates at all, for different classes of housing.
Furthermore, the Board must base its decision in part on "gross
operating maintenance costs" and the Board itself has a July 1st
deadline to promulgate both its findings and the maximum rent
increases for the following cycle (in part based on the M & O
Schedules).
It is clear that to meet its own deadline the Board must
consider the M & O Schedules, if at all, within the month and half
period before the July 1 due date for its Order. While most
deadlines are to some extent arbitrary, clearly some deadline is
required in order for the Schedules to be considered. Surely, the
owner's suggestion that owners be allowed to collect Guidelines
increases upon filing of the Schedules has no merit. The rent
increases can occur no earlier than October 1st, whereas the
Schedules are due the preceding May 15th. Under the owner's
suggestion there would be no incentive at all to timely file.
THEREFORE, in accordance with the Emergency Tenant Protection
Act and Regulations, it is
ORDERED, that two owner petitions be, and the same hereby are,
denied, and the Rent Administrator's order be, and the same hereby
is, affirmed. It is further
ORDERED, that the tenants' petition be, and the same hereby
ADM. REVIEW DOCKET NOS.: BA810106RO, ET AL.
is, dismissed.
ISSUED:
LULA M. ANDERSON
Deputy Commissioner
|
