CD510130R0
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 S.J.R. 6650
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: CD510130RO
DRO DOCKET NO.: ZBL410001R
RAPHAEL SCHNEIDERMAN,
TENANTS: GEORGE AND LAURA
HOLLANDER
PETITIONER
------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On April 13, 1988, the above-named petitioner-owner timely re-filed
a Petition for Administrative Review against an order issued on
February 16, 1988, by the Rent Administrator, 10 Columbus Circle
New York New York, concerning the housing accommodations known as
340 West 22nd Street, New York, New York, Apartment No. 2R AKA 2B,
wherein the Rent Administrator determined that the owner had
overcharged the tenant.
Subsequent thereto, the petitioner-tenant filed a petition in the
Supreme Court pursuant to Article 78 of the Civil Practice Law and
Rules, in the nature of mandamus, for a judgment directing the
Division to render a determination of the petitioner-owner's
administrative appeal.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2526.1 of the Rent Stabilization Code
(hereafter RSC).
The issue herein is whether the Rent Administrator's order 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
issue raised by the administrative appeal.
This proceeding was originally commenced by the filing of a rent
overcharge complaint by the tenants in December 1987.
The tenants who took occupancy of the subject apartment in
September 1975 contend that the initial apartment registration
(hereafter RR1) was never served on them and that the apartment is
not properly registered with the Division of Housing and Community
Renewal (DHCR) because the owner, who recently combined 3
apartments into a single unit thereby reducing the 6 unit multiple
dwelling into a 3 unit multiple dwelling, alleges that the building
is no longer subject to Rent Stabilization.
The owner was served with a copy of the tenants' complaint but
failed to interpose a response.
CD510130R0
Prior to the order appealed herein, the Rent Administrator had
issued order ZAI410017RV on December 28, 1987 wherein it was
determined that the tenants were entitled to a renewal lease; that
the building was subject to the Rent Stabilization Law (hereafter
RSL) and that failure to properly register the subject building may
bar an owner from applying for or collecting any rent increases
pursuant to Section 2528.4 of the RSC.
In Order Number ZBL410001R, the Rent Administrator established the
lawful stabilized rent as $438.38 effective April 1, 1984,
determined that the tenants had been overcharged and directed a
refund to the tenants of $4,725.55 including interest on
overcharges collected on and after April 1, 1984.
In addition, the rent was frozen at $438.38 until the apartment is
properly registered with DHCR and a copy of the RR1 forms are
served by certified mail on the complainants and all other Rent
Stabilized tenants in the building.
In this petition, the owner contends in substance that it had
purchased the subject building in 1984 and believed that the prior
owner had both properly registered the building and served the
tenants with the required RR1; that the instant complaint only
arose because the owner had originally wished to use the subject
apartment for his own use but subsequently abandoned any attempt to
acquire the subject apartment because another apartment became
vacant; that the owner has attempted and is continuing to make
efforts to obtain an affidavit from the prior owner concerning the
service of the RR1 on the complainants; that proof of proper
registration would render the tenants' complaint untimely and that
it is unfair to penalize the current owner for an alleged failure
of his predecessor.
In answer to the owner's petition, the tenants stated in substance
that upon receipt of the owner's claim on their apartment they did
start to investigate their rights and found that DHCR had no record
of registration for the subject building on file; that the owner
never rented the other vacant apartment immediately but did combine
3 apartments into one and that they are the last rent stabilized
tenants in the building.
The Commissioner is of the opinion that this petition should be
denied.
Sections 2528.2 and 2528.3 of the RSC outline the owner's
obligations under the Omnibus Housing Act to register subject
housing accommodations with DHCR.
Section 2528.4(a) of the RSC provides, in pertinent part, that the
penalty for failure to completely and timely register an apartment
will be that the owner will be barred from collecting any rent in
excess of the legal regulated rent in effect on the date the
housing accommodation became subject to the registration
requirements and that the late filing of the registration shall
result in the elimination prospectively of such penalty.
CD510130R0
Full compliance with these registration requirements involves both
the filing of initial registrations with DHCR and the service of
such initial registration on the tenant in occupancy on April 1,
1984 or on the date the apartment first becomes subject to the
registration requirements.
An examination of DHCR records in this case discloses that the
subject building and apartment were not registered for the years
1980 and 1988 until January 6, 1989 and January 12, 1989,
respectively (There is no record of the actual date that the 1984
and 1985 registrations were filed with DHCR); that no
substantiation that a RR1 was actually served on the complainants
was submitted either below or on appeal; that the owner failed to
file a discrete petition against the Rent Administrator's previous
order ZAI410017RV wherein it was established that the apartment and
building were subject to the Rent Stabilization Law and the owner
was advised of the penalties for failure to comply with the
registration requirements of Section 2528.4 and although served by
the Rent Administrator during the proceeding below the owner failed
to interpose a response.
Therefore, the Rent Administrator correctly applied the provisions
of Sections 2528.2, 2528.3 and 2528.4 of the RSC by calculating the
rent from the base date of April 1, 1980 and freezing the rent at
$438.38 effective April 1, 1984 due to the owner's failure to
evince proper and complete registration of the subject apartment by
service of the RR1 on the tenants in occupancy on April 1, 1984.
Although on pg. 3 of the order a typographical error lists the rent
of $520.84 frozen effective November 1, 1981, both the calculations
on pg. 2 and in the calculation chart indicate that the correct
frozen rent is $438.38 and the correct effective date is April 1,
1984 pursuant to Section 2528.4(a) of the Code. This typographical
error is hereby corrected.
With regard to the current owner's contention that the current
owner should not be held liable for overcharges caused by a prior
owner, Section 2526.1(f) 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
collected by any prior owner.
The Commissioner rejects as without merit the owner's contention
that its liability is limited due to the fact that it should not be
penalized for alleged failures of the prior owner and for records
not provided at title transfer.
It is a long standing DHCR policy that a new owner "steps into the
shoes" of the prior owner. Upon purchasing a rent regulated
property, the new owner knew or should have known of its obligation
to acquire a complete set of rental records in order to verify that
the rents contained in the building's rent roll included with the
transfer of title were legal regulated rents and that registration
requirements were complied with. Its failure to do so is
insufficient evidence to absolve the current owners from liability.
Accordingly, the Rent Administrator's order was warranted.
CD510130R0
Because this determination concerns lawful rents only through
February 29, 1988, 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 this 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 this order. The
owner is further directed to adjust subsequent rents to an amount
no greater than that determined by this order plus any lawful
increase.
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 or not in excess of twenty percent per month
thereof may be offset against any rent thereafter due the owner.
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
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