BH210211RO



                                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 NO.BH210211RO

           15 Crown Associates            :  DISTRICT RENT OFFICE
           c/o Emil Friedman                 DOCKET NO. ZK001752R
                                            
                                             TENANT: Venus Johnson            
         

                            PETITIONER    : 
      ------------------------------------X                             


           ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


      On July 31, 1987, the above named owner filed a Petition for 
      Administrative Review against an order issued on June 30, 1987 by the 
      Rent Administrator concerning the housing accommodations known as 15 
      Crown Street, Brooklyn, New York, Apartment No.3E, wherein the Rent 
      Administrator found overcharges to the complainant tenant.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Section 2526.1 of the Rent Stabilization Code.

      The issues herein are whether the Rent Administrator provided the owner 
      the opportunity to submit to the DHCR the requisite proof that the 
      complainant tenant was served with a copy of the Initial Registration; 
      whether the Administrator's finding of overcharges was correct; whether 
      the imposition of treble damages was warranted; and whether the owner's 
      liability for overcharges collected by the prior owner 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 on March 24, 1985 
      of a rent overcharge complaint wherein the tenant indicated that she  
      commenced occupancy of the subject apartment on April 1, 1984 and that 
      she had not been served with a copy of the Initial Registration by the 
      owner.

      BH210211RO

      On January 29, 1987, the DHCR sent a notice to the owner wherein the 
      owner was requested to provide the DHCR with certain documentation 
      (three methods) substantiating that said owner had served a copy of the 
      Initial Registration on the complainant tenant.  In a response dated 
      February 18, 1987, the owner submitted a copy of the Initial 







      BH210211RO


      Registration and proof of Service on the tenant herein by certified mail 
      on September 25, 1986.  Certified mailing was not one of the three 
      methods of service permitted by the D.H.C.R to prove service of the 
      Initial Registration prior to May 1, 1987.  

      On May 14, 1987, the DHCR sent a notice to the owner wherein the owner 
      was notified that it failed to produce to the DHCR the requisite proof 
      that the complainant tenant was served with a copy of the Initial 
      Registration and that it was again requested to submit such requisite 
      proof or, if unable to do so, a rental history of the subject apartment 
      dating back to April 1, 1980.  The three acceptable methods of proof of 
      service on a tenant were again cited in the May 14, 1987 notice.  
      However, the owner failed again to submit acceptable proof.        
                      
      In Order Number ZK001752R, the Rent Administrator determined that, due 
      to the owner's failure to submit the requisite proof that it had served 
      the complainant tenant with a copy of the Initial Registration, the 
      owner was prohibited from collecting any rent increases above the rent 
      established by the DHCR for April 1, 1984.  Further, the Administrator 
      established the lawful stabilization rent for April 1, 1984 based on the 
      Default Procedure, effecting a rent overcharge of $7,936.20, including 
      excess security and treble damages, since the Administrator determined 
      that the owner failed to submit to the DHCR a rental history dating back 
      to April 1, 1980.  It is noted that, in the Administrator's order, the 
      second page of the rent overcharge chart lists an incorrect overcharge 
      of $10,554.30.  

      In its petition, the owner contends, in essence, that it was not given 
      the opportunity before the issuance of the Rent Administrator's order to 
      cure its deficiency in the requirement that it provide the DHCR with the 
      requisite proof that it had served the complainant tenant with a copy of 
      the Initial Registration.  Moreover, the owner disputes the 
      Administrator's finding that it overcharged the complainant tenant and 
      that such overcharge was willful.  The owner contends that it purchased 
      the subject building in August of 1986 and that, at such time, it merely 
      collected the rent which was based on the calculations of the prior 
      ownership.  The owner asserts that it actually collected lesser amounts 
      in monthly rent than was stated in the Rent Administrator's order.  
      Further, the owner questions its liability for overcharges to this 
      tenant collected during the prior ownership.  The owner submitted on 
      appeal additional documentation as proof that it served the tenant with 
      a copy of the Initial Registration.

      The Commissioner is of the opinion that this petition should be denied. 

      The Commissioner notes that the form and content of the requisite 
      documentation accepted by the DHCR as proof that a copy of the Initial 
      Registration was served on a tenant were clearly stated in the January 
      29, 1987 and May 14, 1987 notices sent to the owner.  In such notices, 
      the owner was requested to provide the DHCR with the requisite proof of



      service within 20 days from the date of said notices.  The owner was 
      advised therein that its failure to do so may result in the revocation 
      of all rent increases for the subject apartment since April 1, 1984.  In 
      the May 14, 1987 notice, the owner was also advised that it failed to 


      BH210211RO

      provide the requisite evidence in response to the January 29, 1987 
      notice and was again requested to do so.  In addition, the owner was 
      advised therein that, if it does not submit the requisite proof of 
      service, the owner was then required to submit within said time period 
      a rental history of the subject apartment dating back to April 1, 1980.

      The Commissioner finds that, due to the owner's failure to produce to 
      the DHCR in the proceeding before the Rent Administrator the requisite 
      proof, in proper form and content, that it had served the complainant 
      tenant with a copy of the Initial Registration, the owner was prohibited 
      from collecting any rent increases above the rent established by the 
      DHCR for April 1, 1984 and, also, the tenant's overcharge complaint was 
      processed as a timely challenge to the Initial Registration, requiring 
      a rental history dating back to April 1, 1980.  The Commissioner notes 
      that documentation submitted as proof of service on appeal was similarly 
      unacceptable.

      Moreover, the Commissioner finds that the owner failed to submit a 
      rental history for the period April 1, 1980 through March 31, 1984 in 
      the proceeding before the Rent Administrator and failed to give any 
      satisfactory excuse for the non-submission.  Accordingly, the 
      calculation of the lawful stabilization rent effective April 1, 1984 for 
      the subject apartment was based on the Default Procedure rather than the 
      requisite rental history dating back to April 1, 1980, inasmuch as the 
      Rent Administrator properly determined that the owner had defaulted in 
      its obligation to provide a full rental history. 

      In the absence of sufficient evidence in the proceeding before the Rent 
      Administrator that overcharges to the complainant tenant were not 
      willful, the imposition of treble damages was warranted.  

      It is noted herein that the owner's assertion that it had actually 
      collected lesser amounts in monthly rent than established by the Rent 
      Administrator has not been substantiated by any evidence. 

      Further, Section 2526.1(f)(2) of the Rent Stabilization Code provides, 
      in pertinent part, that, for overcharge complaints filed or overcharges 
      collected on or after April 1, 1984, a current owner shall be 
      responsible for all overcharge penalties including penalties based upon 
      overcharges collected by any prior owner.  In the instant case, 
      overcharges were established for the period April 1, 1984 through June 
      30, 1987.  Accordingly, the current owner is responsible for the refund 
      of the entire overcharge ($7,936.20) to the tenant.  However, this order 
      is issued without prejudice to any action the current owner may seek 
      against any prior owner for the refund of overcharges actually collected 
      by any prior owner.



      Accordingly, the Rent Administrator's determination was warranted.

      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 the Rent Administrator's 
      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 the Rent Administrator's order.  The owner is 
      further directed to adjust subsequent rents to an amount no greater than 







      BH210211RO

      that determined by the Rent Administrator's order plus any lawful 
      increases.

      The Commissioner has determined in this Order and Opinion that the owner 
      collected overcharges of $7,936.20.  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.  
      A copy of this order is being sent to the current occupant of the 
      subject apartment since the record indicates that the complainant tenant 
      had now vacated the subject apartment.  

      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, denied, and, that the order of the Rent Administrator be, and 
      the same hereby is, affirmed.                                           
                    
      ISSUED:
                                     

                                                                    
                                         JOSEPH A. D'AGOSTA
                                         Deputy Commissioner
    

TenantNet Home | TenantNet Forum | New York Tenant Information
DHCR Information | DHCR Decisions | Housing Court Decisions | New York Rent Laws
Disclaimer | Privacy Policy | Contact Us

Subscribe to our Mailing List!
Your Email      Full Name