STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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
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
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
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
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
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
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
that determined by the Rent Administrator's order plus any lawful
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.
JOSEPH A. D'AGOSTA