Docket No.: CC-410055-RT
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.: CC 410055-RT
:
MELVYN L. MEER, DRO DOCKET NO.: L 3114599-R
PETITIONER :
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ORDER AND OPINION MODIFYING COMMISSIONER'S PRIOR ORDER AND
OPINION AFTER RECONSIDERATION
This proceeding was originally commenced by the filing of a rent
overcharge complaint by the tenant concerning housing accommodations
known as apartment 17-H at 201 E. 19th Street, New York, NY. The
tenant took occupancy pursuant to a lease commencing October 1, 1977
and expiring September 30, 1979 at a monthly rent of $525.00.
In Order Number CDR 32,540 issued on February 1, 1988, the District
Rent Administrator established the lawful stabilized rent based on
the managing agent's failure to provide a complete rental history,
determined that the tenant had been overcharged in the amount of
$10,669.19 and directed the refund of such amount to the tenant.
Both the managing agent and the tenant filed petitions for
administrative review of the Administrator's order.
In his petition, the tenant asserted that the District Rent
Administrator's order contained no determination that the overcharge
was not willful and therefore treble damages should have been
awarded.
In answer to the petition, the managing agent asserted that, as
indicated in the April 1977 rent roll submitted by the managing
agent with its answer, the complainant tenant's initial rent was
less than the last rent charged the prior tenant and that there was
no willful overcharge, or any overcharge.
In reply, the tenant asserted, among other things, that any
challenge to the original order by the managing agent must be deemed
untimely and new evidence may not be considered on administrative
appeal.
In a supplement to its answer to the tenant's petition, the managing
agent contended that the Administrator properly determined that the
overcharge was not willful and that the imposition of treble damages
was not warranted. The managing agent asserted that it was unable
to produce a complete rent history from June 30, 1974 because it did
not receive such documentation when it took over management of the
building. The managing agent further asserted that the tenant filed
two overcharge complaints with the CAB (Conciliation and Appeals
Board) under Docket Numbers TC-24736-G and TC-25917-G, that the
determinations in these earlier proceedings are binding on the
Docket No.: CC-410055-RT
Administrator, and that the records in those proceedings contain a
full rent history for the subject apartment. With its answer the
managing agent submitted letters to the CAB from the prior managing
agent dated June 16, 1978 and July 17, 1978 reciting the full rent
history for the subject apartment, a letter to the CAB from the
prior managing agent dated September 5, 1979 reciting new equipment
installed in the subject apartment and invoices and cancelled checks
for these items, and a letter to the CAB from the prior managing
agent dated July 7, 1978 referring to two major capital improvement
rent increases.
By subsequent correspondence, the managing agent submitted a letter
to the CAB from the tenant dated October 28, 1978 in which the
tenant asserted that the rent records of the prior managing agent
for October 1973 and October 1974 reflect that the relationship
between the prior tenant and the owner was not at arm's length. The
managing agent also cited the case of JRD Management, which limited
the requirement for rent records to 4 years.
By notices dated August 23, 1990, both the managing agent and tenant
were requested to submit copies of such orders. The tenant did not
respond to this notice. The managing agent responded by stating
that it was unable to comply with the request.
In an order issued on November 2, 1990, the Commissioner dismissed
the owner's petition for administrative review as untimely filed.
The Commissioner found that a diligent search of the DHCR's records
had failed to locate the earlier overcharge complaints filed by the
tenant with the CAB, that the parties had failed to submit copies of
orders from those cases, and therefore those prior cases could not
be used as a basis for the Commissioner's determination. The
Commissioner found that the fact that the current managing agent was
unable to obtain rent records from the prior managing agent did not
negate the owner's obligation under Section 42A of the Code to
provide a complete rental history for the subject apartment from the
base date; that the managing agent could not submit rental history
documentation for the first time in answer to the tenant's petition
for administrative review; and that since the managing agent failed
to file a timely petition for administrative review, the managing
agent could not raise a challenge to the Administrator's order in
answer to the tenant's petition. The Commissioner noted that the
decision by the Appellate Division First Department in the case of
Lavanant v. DHCR, 148 A.D.2d 185, 544 N.Y.S. 2d 331 (App. Div. 1st
Dep't 1989), finding that the DHCR may require an owner to submit
complete rent records, rather than records for just four years, is
applicable in this case. The Commissioner further found that the
managing agent had failed to establish by a preponderance of the
Docket No.: CC-410055-RT
evidence that the overcharge was not willful and imposed treble
damages, resulting in a total overcharge amount of $15,841.72.
By letter dated November 7, 1990, the managing agent requested
reopening of the proceeding and reconsideration of the
Commissioner's order, asserting that the Commissioner had failed to
consider the full rental history available in the prior CAB
proceedings which indicates that the tenant was not overcharged.
By order issued on December 3, 1990, the Commissioner found that the
rental history was available in the record contained in the current
and prior proceedings instituted by the tenant. The Commissioner
reopened the proceeding due to irregularities in vital matters and
determined that the matter should be reconsidered on the basis of
the tenant's petition, the owner's answer thereto, together with the
evidence presented in the request for reconsideration and relevant
comments received in reply thereto.
A hearing was held on February 24, 1991 at which the tenant
testified that he did not recall filing any overcharge complaint
with the CAB, and that he had no knowledge of the rental history of
his apartment.
By subsequent correspondence, the owner asserted that on
reconsideration the rental history should be considered and the
lawful stabilized rent should be determined.
By subsequent correspondence, the tenant asserted that on
reconsideration only the issue of treble damages should be
considered.
Additional efforts have been made by the DHCR to locate the tenant's
CAB overcharge complaint files. DHCR records indicate that the
files are in the Iron Mountain storage facility in Rosedale, New
York. While the correct storage box was located in that facility,
the files were not in the box. Those files are therefore
unavailable.
The documentation from the prior CAB proceedings submitted by the
managing agent includes a letter dated June 16, 1978 from the prior
managing agent, Charles Greenthal, to the CAB which states, in
pertinent part, "Lease was renewed for 1 year period to 1974 at
$389.21. Another CAB order, December 1, 1973, increased that rental
to $389.65. A new tenant, Columbus Hospital, Inc., took occupancy
on October 1, 1974 for a two year period at $500.00. That lease was
renewed for one year through September 30, 1977 at $632.50. Then we
come to the next lease which was to Mr. Meer." The tenant's
statement in his complaint corroborates the prior managing agent's
statements in this letter. In his complaint the tenant stated,
"Rent records show that rent jumped by an illegal amount (from
$389.21 to $500.00) between October 1973 and October 1974.
Consequently, all changes since have been overcharges. Basis are
print-outs of Rent History."
While the tenant denies any knowledge of prior overcharge complaints
filed with the CAB, the record indicates that such cases were filed.
Those cases constitute part of the record in this case. While,
after a diligent search, the files in those cases have not been
located, the rental information which was submitted in those cases
Docket No.: CC-410055-RT
is available. It can be assumed that due process was followed in
the processing of these cases and that the tenant was on notice of
rental history submissions in those cases (as evidenced by the
tenant's statements in those proceedings). Therefore the rental
history information will be used to determine the tenant's lawful
stabilized rent.
The rental history includes documentation of the following
improvements to the subject apartment at the time the tenant took
occupancy: 12 windows at a cost of $2,100.00, and a stove at a cost
of $164.70. The other items cited either constitute ordinary
repairs or maintenance or were not installed at the time the tenant
took occupancy. Pursuant to Section 20(c)(1) of the Code, the owner
is entitled to an increase of 1/40th of the cost of the allowable
improvements. As noted on the attached chart, where the actual rent
charged is less than the rent with maximum permitted increases, the
lawful stabilization rent is limited to the rent charged.
The lawful stabilized rent is recalculated on the attached chart,
which if fully made a part of this order. As indicated on the
attached chart, the tenant was not overcharged.
Any arrears owed by the tenant as a result of this order may be paid
by the tenant to the owner in equal monthly installments over the
course of the next 24 months.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is
ORDERED, that the Commissioner's prior order and opinion issued
November 2, 1990 be and the same hereby is modified to the extent
hereinabove indicated, the District Rent Administrator's order be
and the same hereby is revoked and it is determined that the tenant
was not overcharged.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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