BI110060RO
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. BI110060RO
: DISTRICT RENT OFFICE
Leogro Realty Co., DOCKET NO. TC82880G
TENANT: Joel Barnehama
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On August 27, 1987, the above-named owner filed a petition for
administrative review of an order issued on July 22, 1987 by a District
Rent Administrator concerning the housing accommodations known as 65-15
Alderton Street, Rego Park, New York, Apartment No. 2D, wherein the
Administrator determined that the owner had overcharged the tenant.
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the record relevant to the issue
raised by the administrative appeal.
This proceeding was commenced by the filing of an overcharge complaint
on January 4, 1984.
On September 30, 1986, the owner responded to DHCR's Final Notice of
Pending Default by submitting the tenant's lease for the period of
December 15, 1982 through December 14, 1985 and a renewal offer signed
by the tenant.
In the order here under review, the Administrator found that the owner
had failed to provide a complete rental history. The Administrator
established the lawful stabilization rent by utilizing the default
procedure and found a rent overcharge. In computing the lawful
stabilization rent the Administrator used the lowest rent in the subject
building for a three room apartment. Apartment 5D was selected
at a rental of $275.00. The total overcharges were determined to be
$12,021.28.
In the petition for administrative review, the owner alleges, among
other things, that in the proceeding before the Administrator there were
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some notification irregularities based on the fact that the managing
agent's business office had moved. Further, the owner alleges that the
Administrator incorrectly determined the lawful stabilization rent by
utilizing the rent for apartment 5D which the owner states was based on
a "sweetheart" lease. The owner submits a copy of the alleged
"sweetheart" lease and notes that it is a five year lease given by the
prior owner. Also, the owner alleges that the subject apartment was
duly registered in 1984 and the tenant was duly served. The owner
concludes that because the tenant did not challenge the initial
registration, DHCR is precluded from considering the overcharge
complaint.
The owner further asserts in the petition for administrative review that
because of delays in receiving the Administrator's order that the owner
should be permitted additional time to file supplemental pleadings. The
record reflects that no supplemental pleadings were received by DHCR in
this case.
The Commissioner is of the opinion that this petition should be granted
in part.
The Commissioner finds that the due process rights of the owner were
fully protected. While the owner did not respond to the initial
complaint, it did file a response to the Final Notice of Pending
Default. The Final Notice of Pending Default clearly enumerated what
specific documentation was required to be submitted by the owner to
avoid default. The owner failed to submit the required documentation.
The Commissioner is of the opinion that the Administrator correctly
determined that the owner failed in its obligation to supply DHCR with
a complete rental history. Accordingly, it was appropriate for the
Administrator to employ the default system of computing the lawful
stabilization rent.
The owner's assertion that DHCR may not consider the overcharge
complaint because the tenant failed to object to the initial
registration is without merit. The tenant's complaint was filed before
April 1, 1984 and was properly processed as an overcharge. Had the
tenant's complaint been filed more than ninety days after the date he
was served with the initial registration, the April 1, 1984 rent would
have been established as the lawful stabilization rent.
However, the Commissioner is of the opinion that the owner has
adequately shown that the lowest rent for a three room apartment in the
subject building was a "sweetheart" lease. As such, the second lowest
rent should have been used by the Administrator in the calculations
(Apartment 4D at a monthly rental of $327.60) instead of $275.00 for
Apartment 5D.
The Commissioner notes that in the course of revising the calculations
it was observed that the Administrator also erred by not freezing the
legal stabilization rent in accordance with the default procedure.
Accordingly, the total overcharge as reflected in the enclosed
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calculation chart is $10,934.67 which includes interest on post-April 1,
1984 overcharges. Excess security has been removed from the total
overcharge since the apartment is now a co-op.
This order may, upon the expiration of the period in which the owner may
institute a proceeding pursuant to Article 78 of the Civil Practice Law
and Rules, be filed and enforced in the same manner as a judgment.
THEREFORE, in accordance with 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
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