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
APPEAL OF ADMINISTRATIVE REVIEW
DOCKET NO. BF-410195-RT
Lisa Cohen, DISTRICT RENT ADMINISTRATOR'S
DOCKET NO. L311154OR
PETITIONER
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ORDER AND OPINION REMANDING PROCEEDING TO THE RENT ADMINISTRATOR
The above-named tenant filed a petition for administrative review
("PAR") of an order issued on April 24, 1987 by a District Rent
Administrator concerning the housing accommodations known as
Apartment 8, 240 East 13th Street, New York, New York, wherein
the District Rent Administrator determined that there was no
overcharge.
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 March 31, 1984, and the issues are being determined
pursuant thereto.
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 petition for review.
On January 30, 1984, the subject tenant, Lisa Cohen, filed a
complaint of rent overcharge with the New York City Conciliation
and Appeals Board ("C.A.B."), the agency formerly charged with
enforcement of the Rent Stabilization Law. The tenant took
occupancy on June 1, 1982 of an initial rent of $590.00.
Docket No. BF-410195RT - 2 -
On April 1, 1984, responsibility for the administration of rent
stabilization in New York City was transferred to the New York
State Division of Housing and Community Renewal.
On October 31, 1984, the Division of Housing and Community
Renewal served a copy of the tenant's complaint upon the owner
and demanded that the owner submit copies of all leases or rent
ledgers in effect since the apartment's base date (i.e., the
date that the apartment became subject to rent stabilization).
The owner's answer, dated November 7, 1984, asserted that the
subject apartment was under rent control prior to the complaining
tenant's occupancy; that the complaining tenant was served with
an R-42 form and a DC-2 form on July 15, 1982, and that,
therefore, the time to challenge the rent had expired. The owner
attached the above-mentioned R-42 and DC-2 forms to its answer.
The owner also asserted that $4,343.25 was spent on renovating
the subject apartment.
The tenant's response to the owner's answer, dated March 29,
1985, alleged that an illegal "finder's fee" of $885.00 was
collected by the broker. The reason given by the tenant was
that the broker and the landlord are married; that they share the
same office and telephone, and they were engaged in a single
business entity.
On September 6, 1986 the Administrator mailed to the tenant a
request for copies of the cancelled check and receipt for the
finder's fee.
In a letter dated December 2, 1986, the tenant stated that she
was not in possession of the check, because it was written by
the complaining tenant's former co-tenant. The tenant further
stated that diligent efforts were being made to locate the check.
In the order under review herein, the Administrator found that
there was no rent overcharge, and that the tenant failed to
substantiate the collection of the broker's fee.
In the petition for administrative review the tenant asserts that
the administrator failed to determine whether the initial rent of
$590.00 per month was the legal regulated rent for the subject
apartment, and that the Rent Administrator failed to review the
rental history of the subject apartment prior to the
complainant's occupancy. Also, the tenant reiterates her
assertion that the owner collected an illegal "finder's fee"
because the owner and the broker are a single business entity.
Docket No. BF410195RT - 3 -
The owner's answer, dated November 17, 1987, asserts that the
petition should be dismissed for untimeliness, because, it
asserts, it was filed more than thirty-five days after the
issuance of the Administrator's order. The owner states that the
complainant was the first stabilized tenant of the subject
apartment at the commencement of her tenancy, on June 1, 1982,
and therefore D.H.C.R. cannot determine an overcharge complaint
as to the initial regulated rent. As to the collection of the
alleged illegal "finder's fee," the owner points out that it did
not own the building at the time the tenant initially took
occupancy, and therefore could not have collected a "finder's
fee." Additionally, the owner asserts that the tenant never
substantiated her allegation of paying a "finder's fee."
With regard to the issue of the timeliness of the tenant's
petition, the rent agency, by letter dated February 28, 1991,
requested that the tenant submit proof of the timely filing of
the petition.
The tenant's response, dated March 15, 1991, states that the
petition was mailed on May 29, 1987, which was thirty-five days
after the issuance of the Administrator's order, and that it
therefore was filed timely. The tenant points out that May
29th, 1987 was the Friday before the Memorial Day weekend and
suggests that that is the reason why D.H.C.R. noted receipt of
the PAR in June of 1987.
In a letter to the owner dated May 15, 1991, the D.H.C.R.
attached a copy of the tenant's response, and afforded the owner
ten days from the date of the letter to submit a reply.
The owner did not submit a reply.
On June 25, 1991, D.H.C.R. mailed a letter to the owner
requesting proof of service of the DC-2 form upon the
complainant.
The owner submitted an affidavit by Jane Mark, President of Jed
Management Corporation, which owned the subject premises at the
time of the complainant's initial occupancy, stating that she
personally served the tenant the DC-2 form, and attached the DC-2
form to her affidavit.
The tenant submitted her response to the affidavit on September
3, 1991. The complainant states that she was not served with a
DC-2 form, nor did she sign or initial a DC-2 form. Furthermore,
the tenant points out that the owner did not submit a certified
mail receipt or any document with her initials or signature
indicating receipt of the DC-2 form.
Docket NO. BF410195RT - 4 -
After careful consideration, the Commissioner is of the opinion
that this proceeding should be remanded to the Rent Administrator
for further processing.
The Commissioner finds that the tenant's petition was filed
timely. In view of the fact that the tenant has asserted that
the petition was mailed on the thirty-fifth day after the
issuance of the Administrator's order; that the owner has not
submitted any evidence to the contrary; and that the post-mark on
the envelope, in which the petition was mailed, is partially
illegible, the Commissioner is of the opinion that the tenant
mailed the petition on May 29, 1987 (thirty-five days after the
issuance of the Administrator's order), and was therefore timely.
The Commissioner notes that the subject apartment had been under
rent control immediately prior to the complainant's occupancy.
As the complainant is the initial stabilized tenant, the
Commissioner is of the opinion that this proceeding is to be
processed as a fair market rent appeal (F.M.R.A.).
Section 25 of the former Rent Stabilization Code provides that a
fair market rent appeal application must be filed within 90 days
of receipt of the initial legal regulated rent notice (DC-2
notice). Section 26 of the former Code provides that the notice
shall be served by the owner on the tenant by certified mail.
The Commissioner finds that the owner failed to meet its burden
of proof in establishing that the DC-2 notice was served on the
tenant.
The owner has not submitted adequate proof of service of the DC-2
form on the tenant. The former owner's affidavit asserts that
the DC-2 form was personally served on the tenant rather than by
the means set forth in the code. However, the owner did not
produce further evidence of personal service, e.g., a signed DC-2
form by the tenant indicating receipt. As the tenant has denied
receiving the DC-2 notice, and the owner has failed to submit
sufficient additional evidence that the former owner served the
tenant, the Commissioner finds that the tenant was not served
with a DC-2 notice. The Commissioner further finds that t e 90-
day statutory time period for filing the appeal never started to
run and that the tenant is entitled to challenge the initial
legal regulated rent.
As the Administrator did not determine whether the complainant's
initial rent exceeded the fair market rent, the Commissioner is
of the opinion that this proceeding should be remanded to the
Administrator for a determination of this issue.
In addition, the Commissioner is of the opinion that the
Administrator is to give the tenant a further opportunity to
produce the alleged cancel check and receipt for the alleged
Docket No.BF-410195-RT - 5 -
"finders's fee," and the issue of the collection of an illegal
"finder's fee" may also be determined by the Administrator
Therefore, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this proceeding be, and the same hereby is,
remanded to the Rent Administrator to process this case as a Fair
Market Rent Appeal. The previously issued order remains in full
force and effect until a new order is issued on remand.
Issued:
Elliot Sander
Deputy Commissioner
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