CE410074RO; CE410033RT

                                STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEAL OF                              DOCKET NOS. CE410074RO; 
                and                       :  DISTRICT RENT OFFICE
           Neil Rosenthal,                   DOCKET NO. L3115851RT

                                             OWNER: Gerber/Yablon            
                            PETITIONERS   :  TENANT: Neil Rosenthal


      On May 16, 1988 and May 18, 1988 the above named owner and tenant filed 
      Petitions for Administrative Review against the above cited order, 
      issued on April 14, 1988, by the Rent Administrator concerning the 
      housing accommodations known as 47 West 85th Street, New York, New York, 
      Apartment No. 4B.  The petitions have been consolidated for 
      determination herein.

      The Commissioner notes that this proceeding was filed prior to April 1, 
      1984.  Sections 2526.1 (a) (4)  and 2521.1 (d) of the Rent Stabilization 
      Code (effective May 1, 1987) governing rent overcharge and fair market 
      rent proceedings provide that determination of these matters be based 
      upon the law or code provisions in effect on March 31, 1984.  Therefore, 
      unless otherwise indicated, reference to Sections of the Rent 
      Stabilization Code (Code) contained herein are to the Code in effect on 
      April 30, 1987.

      The Administrative Appeals are being determined pursuant to the 
      provisions of Section 2526.1 of the current Rent Stabilization Code.

      The issues herein are whether the lease rent for a certain lease term 
      was properly omitted in the Rent Administrator's calculation of the 
      lawful stabilization rents for the subject apartment; the period for 
      which the lawful stabilization rents and overcharges were calculated; 
      and whether treble damages should have been imposed.

      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 by the filing on March 30, 1984 
      of a rent overcharge complaint by the tenant.
      In answer to the tenant's complaint and a subsequent Notice Of Pending 
      Default served on the owner, the requisite rental history was submitted 

          CE410074RO; CE410033RT

      to the DHCR.

      In Order Number L3115851RT, the Rent Administrator established the 
      lawful stabilized rent as $399.68 for the lease term May 1, 1982 through 
      June 30, 1984; determined that the tenant had been overcharged; and 
      directed a refund to the tenant of $1,911.08, including excess security 
      and interest on overcharges collected on and after April 1, 1984.

      In the owner's petition, the owner requests reversal of the Rent 
      Administrator's order and contends that the Rent Administrator's finding 
      of overcharges resulted from the Administrator's failure to include the 
      August 1980 lease rent of $304.20 in the calculation of the lawful 
      stabilization rents of subsequent leases.  Based on the inclusion of 
      said August 1980 lease rent of $304.20 in the owner's calculations, the 
      owner purports to show that, among other things, the lawful 
      stabilization rent for the complainant tenant's May 1, 1981 vacancy 
      lease was $405.18 rather than $353.70 as determined by the Administrator 
      and that, therefore, the amount of $400.00 in monthly rent actually 
      collected was not an overcharge.

      In the tenant's petition, the tenant requests modification of the Rent 
      Administrator's order and contends that, although he submitted the 
      requisite information in response to a letter from the DHCR requesting 
      an additional rental history for the period July 1, 1984 through the 
      date of receipt of said letter, the Administrator's order failed to 
      include additional overcharges for this period.  The tenant further 
      states that treble damages should have been included in the total 
      overcharge amount since the tenant believes that the overcharges were 
      willful. The tenant submitted with his petition leases and registrations 
      for the period May 1, 1981 through June 30, 1988.

      In answer to the tenant's petition, the owner affirms its own appeal but 
      states that, if found to have overcharged the tenant, said overcharges 
      were not willful.  The owner states that its petition should be granted 
      and that the tenant's petition should be denied.

      In response to the owner's answer, the tenant disputes the veracity of 
      the owner's contentions and reasserts that the overcharges were willful.

      The Commissioner is of the opinion that the owner's petition should be 
      denied and that the tenant's petition should be granted in part.

      In accordance with the policy promulgated by the DHCR in the application 
      of Board guideline rent increases, the compounding of guideline 
      increases during the same guideline period is prohibited.  However an 
      owner is permitted to compound vacancy allowances for vacancy leases if  
      the applicable guideline order allows multiple vacancy allowances and 
      the vacancy tenant continues in occupancy for at least three months.  In 
      the instant case, the August 1, 1980 renewal rent of $304.20 was not 
      factored into the Rent Administrator's calculation of the lawful 
      stabilization rent for the complainant tenant's May 1, 1981 vacancy 
      lease (as were neither the September 1, 1980 and March 23, 1981 vacancy 
      leases) since said August 1, 1980 lease (and the September 1, 1980 and 
      March 23, 1981 vacancy leases) commenced within the same guideline 
      period as the complainant tenant's vacancy lease.  However, since the 
      occupancy for the September 1, 1980 vacancy lease continued at least 
      three months, the five percent vacancy allowance permitted for this 
      lease was compounded for the complainant tenant's May 1, 1981 vacancy 

          CE410074RO; CE410033RT

      lease wherein a ten percent vacancy allowance (5% for the September 1, 
      1980 vacancy lease and 5% for the vacancy lease of the tenant herein) 
      was permitted since multiple vacancy allowances were permitted pursuant 
      to Guideline 12 then in effect.  The five percent vacancy allowance for 
      the March 23, 1981 vacancy lease was not permitted since the March 23, 
      1981 vacancy tenant was not in occupancy for at least three months.  It 
      is noted that the Rent Administrator's order incorrectly shows guideline 
      No. 12a for the complainant tenant's May 1, 1981 vacancy lease.  Such 
      error is hereby corrected to read Guideline 12.  Based on the foregoing, 
      the Commissioner finds that the Rent Administrator properly omitted the 
      August 1, 1980 lease rent in its calculations contrary to the owner's 
      contention on appeal.

      An examination of the record discloses that, in fact, the DHCR had 
      requested from the tenant information concerning any change in rent 
      since July 1, 1984, and that said tenant responded by his submission in 
      the proceeding before the Rent Administrator of a rental history for the 
      period July 1, 1984 through June 30, 1988.  Accordingly, the 
      Commissioner finds that the lawful stabilization rents and overcharges 
      for the period July 1, 1984 to the date of issuance of the Rent 
      Administrator's order should have been included in the Administrator's 

      The Commissioner notes that, pursuant to Policy Statement 89-2, 
      overcharges resulting from an owner's compounding of guideline increases 
      during the same guideline period, as occurred in the instant case, is 
      deemed a hypertechnical error for which the imposition of treble damages 
      is not warranted.  The Commissioner finds, therefore, that the Rent 
      Administrator properly excluded treble damages in the calculation of 
      overcharges to the tenant.

      Based on the foregoing, the Rent Administrator's order is herein 
      modified.  The Commissioner has recalculated the lawful stabilization 
      rents and the amount of rent overcharge on the amended rent calculation 
      chart attached hereto and made a part hereof.  

      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 

      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 judgement 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 Rent Stabilization Law and Code, it is

      ORDERED, that the owner's petition be, and the same hereby is, denied, 
      that the tenant's petition 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.  The lawful 

          CE410074RO; CE410033RT

      stabilization rents and amounts of overcharge are established on the 
      attached chart which is fully made a part of this order.  The total 
      amount of rent overcharges through April 30, 1988 is $5,146.48.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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