BE610213RO
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.BE610213RO
: DRO DOCKET NO.B3100864R
DAVID GARBER
PETITIONER : TENANT: AGATHA PERRY
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ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE
REVIEW
On May 18, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on April
14, 1987, by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York, concerning the housing accommodations known as
2259 Creston Avenue, Bronx , New York, Apartment No. 3E, wherein the
Administrator established the legal stabilized rent by using
approved default procedures and directed the owner to refund an
overcharge of $2,330.14 inclusive of excess security and interest on
the overcharge occurring on or after April 1, l984.
The Commissioner has reviewed all of the evidence of record and
has carefully considered that portion of the record relevant to the
issues raised in the administrative appeal.
This proceeding was commenced on March 31, l984 when the tenant
filed a complaint of rent overcharge.
In answer to the complaint, the owner stated that he had
purchased the subject building pursuant to a foreclosure sale and
had received no rental records from the prior owner.
Based upon the owner's failure to provide a full rental
history, the Administrator established the lawful stabilization rent
as of February 1, 1985 at $248.48 and directed the owner to refund
overcharges of $2,330.14 inclusive of excess security and interest
on the overcharge occurring on or after April 1, l984.
In his appeal, the owner asserts that he was unable to provide
a rental history because he had taken title to the subject building
pursuant to a foreclosure action in August 1983 and that he had not
received a complete set of rent records from the prior owner.
Moreover, the owner contends that he should not be held liable for
failing to produce rent records when the DHCR could have inspected
its own files to ascertain the correct rent either in the Maximum
Base Rent Master Building Rent Schedules or in the registered rent
pursuant to Section 2526.1 of the Rent Stabilization Code. The
owner also asserts that the tenant had no basis for a complaint.
BE610213RO
The owner submits a copy of his deed in substantiation of his
assertion.
In response to the petition, the tenant contends that she filed
her complaint after learning of the appropriate agency to contact
about the rent.
The Commissioner is of the opinion that this petition should be
granted in part.
With respect to the alleged failure of the Administrator to
examine DHCR records for the base rent, the Commissioner notes that
such information is not available in the agency's records but should
be provided by owners who are enjoined to maintain such records.
The Maximum Base Rent Schedules to which the owner refers are rent
schedules for rent controlled apartments and differ significantly
from base rents for rent stabilized apartments. Since this
complaint, which was filed before April 1, l984, predates
registration requirements, the owner cannot rely on the registered
rent to fulfill the need to submit base date rental data.
Code Section 2526.1(f) provides in pertinent part that where
no records sufficient to establish the legal regulated rent were
provided at a judicial sale, in the absence of collusion or any
relationship between a current owner and any prior owner, a current
owner who purchases at such judicial sale shall be liable only for
his or her portion of the overcharge and shall not be liable for
treble damages upon such portion resulting from overcharges caused
by any prior owner. Section 2526.1(f) further provides that for
overcharges collected prior to April 1, l984, an owner will be held
responsible only for his or her portion of the overcharges.
Consistent with the exemptions from treble damage liability and
from responsibility for refunding overcharges collected by prior
owners extended to purchasers at a judicial sale under the Rent
Stabilization Code, and in consideration of court rulings directing
the DHCR to modify default procedures for certain owners, DHCR has
adopted a new policy with respect to the processing of overcharge
cases involving judicial sale purchasers. Where rent records are
not available upon judicial sale, DHCR will establish the legal
regulated rent as the average of a) the lowest rent in the building
for an apartment with the same number of registered rooms; b) the
complaining tenant's initial rent, minus the guidelines; and c) the
prior tenant's rent, if known.
The legal regulated rent so established is to be frozen for
three years or two lease terms,whichever is greater, starting with
the commencement date of the complaining tenant's initial lease.
Application of this new policy to the instant proceeding would
necessitate correction of computational errors in the
Administrator's order, rendering a harsher result than contained in
the Administrator's order. This is so because the Rent
Administrator's order did not freeze the rent for any period as
required. Since the tenant herein did not file her own appeal,
the Commissioner declines to apply this new policy.
BE610213RO
However, review of the record discloses that the Administrator
failed to apportion the overcharge between the current owner and
prior owners as is required by Code Section 2526.1. Accordingly,
the Commissioner has recomputed the current owner's portion of the
overcharge from September 1,1983 through January 31, 1987 at
$1114.06 inclusive of interest on the overcharge
occurring on or after April 1, l984. Excess security is eliminated
since the tenant vacated the subject apartment.
Since the record indicates that the tenant has vacated the
subject premises, a copy of this Order and Opinion is being sent to
the current tenant in occupancy,
The tenant may seek to recover that portion of the overcharge
collected by the prior owner ($1192.06) from the prior owner in a
court of competent jurisdiction
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 $1114.06. 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. 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 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.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
BE610213RO
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