CA410127RT


                             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
      APPEALS OF                             DOCKET NO. CA410127RT
                                                        DC410019RT

           Lois Satler,                   :  DISTRICT RENT OFFICE
                                             DOCKET NO. AL410012RP
                                            
                                                          
                            PETITIONER    : 
      ------------------------------------X                             


          ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW


      On February 6, 1988, the above-named tenant timely refiled a petition 
      for administrative review of a District Rent Administrator's order 
      issued on November 19, 1987 concerning the housing accommodations known 
      as 245 East 35th Street, New York, New York, Apartment No. 4C, wherein 
      the Rent Administrator determined that the owners had not overcharged 
      the tenant.

      A supplemental submission filed by the tenant was received by the 
      Division of Housing and Community Renewal (DHCR) on March 2, 1989.  Due 
      to a clerical error this supplemental submission was assigned a new 
      Docket No. DC410019RT.  Accordingly, the Commissioner is consolidating 
      these two cases, and this order and opinion shall be dispositive of 
      both.

      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 appeals.  

      This proceeding was originally commenced on October 7, 1983 by the 
      filing of an overcharge complaint with the New York City Conciliation 
      and Appeals Board (CAB), the agency formerly charged with enforcing the 
      Rent Stabilization Law, under Docket No. TC077130G.  In the complaint 
      the tenant stated that she took occupancy of the subject apartment on 
      October 15, 1975 and suspected she was being overcharge.  The tenant 
      noted that she had not received a rental history of the subject 
      apartment.  The owner named in this complaint was Sulzberger-Rolfe, Inc.


      In its answer to the tenant's overcharge complaint, Sulzberger-Rolfe 
      asserted that no overcharges had occurred, but acknowledged that it had 
      no leases in its possession prior to the complainant-tenant's vacancy 
      lease beginning October 15, 1975.

      In the Rent Administrator's order under Docket No. TC077130G issued on 







          CA410127RT

      December 11, 1985 the Administrator determined that the owner had failed 
      to provide DHCR with a complete rental history.  Accordingly, the 
      Administrator determined the lawful stabilization rent and the 
      overcharges by employing the court-approved default method.  The total 
      overcharges were computed to be $20,775.29 through December 31, 1985.  
      This order named Avenue Associates as the prior owner and Townsley 
      Associates, c/o Sulzberger-Rolfe, Inc. as the current owner.

      The prior owner, Avenue Associates, filed a petition for administrative 
      review (Docket No. ARL07204L) of the order issued on December 11, 1985 
      alleging that it had not been served by DHCR with any notices in the 
      original proceeding and therefore had been denied due process.

      The tenant's answer to the prior owner's petition for administrative 
      review alleged that Avenue Associates was "flagrantly lying," and 
      alleged that a connection existed between the prior owner and current 
      owner of the subject building.

      On November 28, 1986, the Commissioner under Docket No. ARL07204L issued 
      an order and opinion finding that Avenue Associates had been denied due 
      process in the original proceeding and accordingly, remanded the case to 
      the Administrator for further processing.  The remanded case was 
      assigned Docket No. AL410012RP and is the case here under review.

      In the proceeding before the Administrator under Docket No. AL410012RP 
      the tenant alleged that she had been advised by a CAB employee that 
      Avenue Associates had in fact been served in the original proceeding.  
      Further, she alleged that she had filed a second complaint of overcharge 
      with the CAB on October 13, 1983 in which she named Avenue Associates as 
      the owner, and therefore the tenant concluded that Avenue Associates had 
      been served.

      Avenue Associates reiterated the due process allegations made in its 
      petition for administrative review Docket No. ARL07204L before the 
      Administrator.  Namely, Avenue Associates asserted that it had sold the 
      subject building in 1981 and had moved from the address listed in the 
      original order under Docket No. TC77130G.  Further, in addressing the 
      merits of the case, the prior owner submitted two leases which completed 
      the rental history.

      In the order here under review, the Administrator determined that a 
      complete rental history had now been supplied and that the owners had 
      not overcharged the tenant.

      In her petitions for administrative review, the tenant reasserts, among 
      other things, that the prior owner, Avenue Associates, was in fact 
      served and should not have been given a second opportunity to contest 
      her original complaint.  In the alternative, the tenant asserts that the 
      previously-defaulted current owner, Townsley Associates, filed no 
      petition for administrative review of the Administrator's original order 
      under Docket No. TC77130G and therefore should not benefit from the 
      reprocessing of this case due to the filing of a petition for 
      administrative review by the prior owner.  Further, the tenant alleges 
      that the leases which the owners produced to complete the rental history 
      were fraudulent, and she alleges that a collusive relationship existed 
      between the current owner and the prior owner.  The tenant submits a 
      variety of documents in an effort to bolster her claims of fraud and 
      collusion.


          CA410127RT


      In their answers to the petitions for administrative review, the owners 
      urge that the Administrator's order under Docket No. AL410012RP be 
      affirmed.  Among other things, the owners vigorously refute the tenant's 
      allegations of fraud and collusion.

      Subsequently, the case was referred to the Hearings Section for a 
      hearing on the issues of the whether the leases submitted to complete 
      the rental history were valid and whether the owners acted in collusion.  
      Prior to the commencement of the hearing, the parties were given access 
      to the entire file and various memoranda as well.

      The hearing began before Paul K. Fuller, Administrative Law Judge, on 
      May 14, 1992 at which time all parties appeared with counsel and 
      concluded on June 24, 1992 when the owners again appeared with counsel 
      and the tenant appeared pro se.

      The tenant had specifically challenged the lease entered into between 
      the prior owner and tenant Ms. Novas-Calvo on March 7, 1974 and the 
      lease of September 13, 1974 between the prior owner and tenant Maureen 
      O'Connell.

      The tenant alleged and testified that in August of 1975 she was informed 
      by either a superintendent or a doorman that the subject unit had been 
      vacant for a long time.  The tenant stated that Ms. Novas lived in an 
      apartment on 72nd Street.  However, she acknowledge that Ms. Novas told 
      her that for several months she had lived elsewhere but could not recall 
      when or what building.  Ms. Novas also told the tenant that while she 
      had not signed the lease perhaps her husband or daughter had signed the 
      lease.  The tenant also testified that she had a conversation with 
      Maureen O'Connell but that Ms. O'Connell could not recall anything 
      probative.

      To substantiate her allegations regarding the legitimacy of the leases 
      between the prior owner and the prior tenants, on which the tenant has 
      the burden of proof, the tenant submitted, among other things, 
      affidavits of two independent tenants.  The tenant also submitted 
      letters from Syracuse University and the Town of DeWitt by which 
      documents she sought to establish the falsity of the Novas Calvo 
      apartment lease application and thus the lease.

      Avenue Associates produced the original leases, apartment lease 
      applications and other documents contained in their records pertaining 
      to these two rentals.  The Administrative Law Judge found that all of 
      the documents appeared regular on their face and contained no obvious 
      alterations with the single exception of the v and the o in Calvo, on 
      the lease, which the Administrative Law Judge determined to be 
      insignificant.

      Like the complainant-tenant, the owner's witnesses had no personal 
      knowledge of the facts and circumstances surrounding the execution of 
      the two leases.

      After a complete hearing in which the Administrative Law Judge heard 
      testimony from several witnesses and examined the large number of 
      documents submitted as evidence, the Administrative Law Judge found that 
      the tenant had failed to sustain her burden of proof regarding her claim 
      that the two leases which completed the rental history were not valid 







          CA410127RT

      and that there was no evidence that the owners had acted in collusion or 
      in any way sought to manufacture or submit fraudulent evidence.

      The Commissioner is of the opinion that these petitions for 
      administrative review should be denied.

      The Commissioner is of the opinion that the issue of whether the prior 
      owner was denied due process need not be reconsidered in this 
      proceeding.   That issue was fully considered by the Commissioner in 
      Docket No. ARL07204L wherein the Commissioner found that the prior owner 
      was in fact denied due process in the proceeding under Docket No. 
      TC077130G.  The tenant has offered no evidence to warrant 
      reconsideration of this issue.

      Even if the Commissioner were to reconsider this issue, the evidence in 
      the record would confirm the prior finding of a lack of due process.  
      The DHCR case record under Docket No. TC077130G gives no indication that 
      any notice was sent to Avenue Associates.   There is no independent 
      evidence to corroborate the tenant's claim that the prior owner was 
      served or given an opportunity to participate in the original 
      proceeding.

      Regarding the tenant's claim that the current owner, Townsley 
      Associates, filed no petition for administrative review and, 
      accordingly, the default finding should be affirmed as against Townsley 
      Associates, the Commissioner is of the opinion that this argument is 
      without merit.  Proceedings before DHCR are a single entity and are not 
      severed between owners.  The fact that the current owner may receive a 
      benefit despite being less than diligent in defending itself does not 
      change this rule.  In fact, in the more common situations, DHCR holds a 
      current owner liable for errors made by a prior owner.  Similarly, the 
      current owner can derive a benefit from the prior owner's correction of 
      an error.

      With regard to the merits of the case, the Commissioner finds that it is 
      appropriate to adopt the findings of the Administrative Law Judge that 
      the tenant failed to sustain her burden of proof regarding her 
      allegation of fraudulent leases and that there was no evidence of 
      collusion between the owners or of the manufacture or submission of 
      fraudulent evidence by the owners.  The Administrative Law Judge found 
      that the documentation submitted by the tenant was either inconclusive 
      or non-probative, and that the tenant's own testimony, in fact, lent 
      credence to the validity and legitimacy of the leases.  Accordingly, the 
      Commissioner finds that the record contains a complete, valid lease 
      history which indicates that the owners did not overcharge the tenant.


      THEREFORE, in accordance with the Rent Stabilization Law and Code, it is

      ORDERED, that these petitions be, and the same hereby are, denied and 
      that the order of the Rent Administrator be, and the same hereby is, 
      affirmed.

      ISSUED:
                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner
    

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