CE410074RO; CE410033RT
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 NOS. CE410074RO;
CE410033RT
Gerber/Yablon
and : DISTRICT RENT OFFICE
Neil Rosenthal, DOCKET NO. L3115851RT
OWNER: Gerber/Yablon
PETITIONERS : TENANT: Neil Rosenthal
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ORDER AND OPINION DENYING OWNER'S PETITION FOR ADMINISTRATIVE REVIEW
AND
GRANTING TENANT'S PETITION FOR ADMINISTRATIVE REVIEW IN PART
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
calculations.
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
increases.
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.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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