CF410027RT, CF410053RO

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

      APPEAL OF                              DOCKET NOS. CF410027RT

           Lori Segal Oppenheimer, tenant,:  DISTRICT RENT OFFICE
                     and                     DOCKET NO. L3116481R, 
           G.P. Associates, owner,                      CDR33340 As Amended
                            PETITIONER    : 


      On June 24, 1988 the above-named petitioners filed Petitions for 
      Administrative Review against an order issued on May 20, 1988 by the 
      Rent Administrator, 10 Columbus Circle, New York, New York concerning 
      the housing accommodations known as 1470 First Avenue, New York, 
      New York, Apartment No. 5J wherein the Rent Administrator determined 
      that the owner had overcharged the tenant.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Sections 2522.5(e)(4) and 2526.1 of the Rent Stabilization Code.

      The issue herein is whether the Rent Administrator's order was 

      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 in March, 1984 of 
      a rent overcharge complaint by the tenant, who stated in substance that
      she had commenced occupancy on June 1, 1980 at a rent of $461.47 per 
      month, and that the owner had collected additional charges and increases 
      in 1981 and 1982.

      In answer to the complaint, the owner submitted the 1978 lease for the 
      prior tenant, which was the first one after the building was constructed 
      with the help of benefits pursuant to Real Property Tax Law ("RPTL") 
      Section 421-a.
      In an order issued on May 20, 1988 the Administrator found an overcharge 
      of $1,388.10 as of March 31, 1986 (including excess security, although  

          CF410027RT, CF410053RO

      the tenant had vacated).

      In its petition (Docket No. CF410053RO), the owner contends in substance 
      that the base rent must be increased by an additional 2.2% per year 
      pursuant to RPTL Section 421-a, and that interest should not have been 
      assessed against overcharges.

      In answer, the tenant makes arguments herein set forth in the 
      description of her petition, infra.

      In response the owner further contends that it is not required to keep 
      or maintain records to 1980, but only for four years, pursuant to the 
      Omnibus Housing Act of 1983.  

      In her petition (Docket no. CF410027RT), the tenant contends in 
      substance that the Administrator ignored the rents paid during her 
      second lease, set forth in her complaint and now evidenced by cancelled 
      rent checks, and instead just used the rents set forth in the lease; 
      that treble damages should be imposed, both because the lease rents were 
      unlawful and because the owner arbitrarily charged amounts above the 
      rent recited in her second lease; that the Administrator incorrectly 
      added two RPTL Section 421-a increases on June 1, 1985 although they had 
      previously been credited; and that the interest calculated is less than 
      the applicable 9%.

      The owner's former attorney initially contended that the tenant's 
      petition, date-stamped by the DHCR on June 27, 1988, was untimely, and 
      requested an opportunity to address it on the merits if the DHCR chose 
      to accept it despite its untimeliness.  On April 21, 1993 the owner was 
      informed that the petition had been mailed on June 24, 1988, and was 
      given an opportunity to respond to it.

      In its subsequent answer, the owner asserts in substance that the 
      tenant's petition is untimely since it may have had a private postage 
      meter postmark [the owner was subsequently sent a copy of the mailing 
      envelope date-stamped by the U.S. Postal Service on June 24, 1988, the 
      same date that the owner's petition was mailed in an envelope hand- 
      stamped by the Postal Service, although the owner's envelope also has a 
      postage-meter date of June 23, 1988]; that the Commissioner abused his 
      discretion under current Rent Stabilization Code Section 2529.7 by 
      failing to determine within a reasonable amount of time whether or not 
      the petition was timely, thus prejudicing the owner; that this 
      constitutes laches; that the tenant is attempting to use separate and 
      legal charges for which she may have been in arrears to allege that she 
      was being overcharged; that she was charged pursuant to her lease 
      agreement; that treble damages should not be imposed in the case of 
      hypertechnical computation errors such as the inclusion of the 2.2% 
      increases in the base rent on and after November 19, 1982; and that no 
      interest should be imposed in light of the DHCR's five year delay in 
      processing the tenant's petition.

      The Commissioner is of the opinion that the tenant's petition should be 

          CF410027RT, CF410053RO

      granted in part, and that the owner's petition should be denied.

      It is unclear why the owner contends that the Administrator's order 
      failed to afford the owner the full amount of the RPTL Section 421-a 
      increases, since $7.37 (2.2% of the initial rent) was added on each 
      anniversary date of the initial lease.  [Pursuant to Section 
      2522.5(e)(4) of the current Rent Stabilization Code, any 2.2% increases 
      which become effective on and after November 19, 1982 do not become part 
      of the legal regulated rent, but are a separate charge not included in 
      the base rent when calculating Guideline increases.] Regarding interest, 
      in the absence of the imposition of treble damages the DHCR was required 
      by Section 2526.1(a)(1) to impose interest on overcharges occurring on 
      and after April 1, 1984.

      The Administrator's rent calculation chart did contain several errors.  
      For June 1, 1980 the chart calculated a Guidelines and vacancy increase 
      on the 1979 2.2% increase of $7.37, although that increase was not in 
      effect on June 30, 1979.  For June 1, 1982 the chart removed the 1981 
      2.2% increase, not in effect on September 30, 1981, before applying the 
      Guidelines increase, but forgot to add it back in afterwards.  For June 
      1, 1985 the chart calculated the increase on the basis of the September 
      30, 1983 rather than September 30, 1984 rent.  However, the tenant is 
      incorrect about duplication of two 2.2% increases on that date, since 
      the fact that Guidelines increases did not apply to the 1983 or later 
      2.2% increases meant that the 2.2% increases have to first be subtracted 
      out, and then added back in after the Guideline is applied.

      The tenant is correct about the chart ignoring the actual rents paid 
      during her second lease.  She specified them in her complaint, but the 
      Administrator ignored the contention and, without asking the tenant for 
      further evidence, assumed that the rent specified in the lease was paid.  
      The cancelled checks submitted by the tenant show that she was correct 
      in her contention that the owner charged more than $461.47.  However, 
      the tenant is incorrect in asserting that the additional amounts (being 
      $10.15, $18.15, $26.15 or $28.30 more than the lease rent in various 
      months) were arbitrary.  The owner, at least during the second year of 
      the tenant's initial lease, considered the 2.2% increase to be based on 
      $461.47, resulting in an increase of $10.15.  There was also an $8.00 
      temporary fuel cost adjustment beginning on the first anniversary of the 
      lease and lasting until its expiration.  The additional charges from 
      July, 1981 through May, 1982 represented various combinations of zero, 
      one or two of one or both of those amounts, with the net effect being 
      the addition of $10.15 and $8.00 for each month between June, 1981 and 
      May, 1982.  While the owner may be correct that these are lawful 
      charges, the Administrator included the increases in the lawful rent 
      while failing to include them in the rent collected [although the amount 
      of the 2.2% increase included was $7.37 rather than $10.15], thus 
      incorrectly reducing the amount of overcharge calculated.  Taking these 
      factors into account, the Commissioner has recalculated the lawful 
      stabilization rents and the amount of overcharge.  They are set forth on 
      an amended rent calculation chart attached hereto and made a part 

          CF410027RT, CF410053RO

      The Commissioner considers treble damages to be appropriate for 
      overcharges occurring on and after April 1, 1984.  During the second 
      year of the tenant's initial lease the owner calculated the 2.2% 
      increase on the tenant's $461.47 vacancy rent rather than on the initial 
      stabilized rent of $335.00.  The owner therefore charged a $10.15 rather 
      than $7.37 increase from June 1, 1981 through May 30, 1982.  The $557.22 
      rent in the tenant's second lease also reflected a 1981 2.2% increase of 
      $10.15 rather than $7.37.  There is no indication that the owner took 
      the 1982, 1983 or 1984 2.2% increases, other than adding $7.37 (only) to 
      the 6% Guidelines increase over the June 1, 1982 lease rent to get the 
      June 1, 1985 rent.  (This means the owner did not include the 2.2% 
      increase in the base rent on or after November 19, 1982.)  The net 
      result of this is that approximately $3.00 per month in the second year 
      of the tenant's initial lease, and approximately $6.00 per month 
      thereafter, is attributable to errors in calculating and applying 2.2% 
      increases.  The overcharge in the tenant's vacancy lease was $28.65 per 
      month, before the owner began making the errors of approximately $3.00 
      and $6.00 involving the 2.2% increases.  Because the owner has not given 
      any reason for the majority of the overcharges, the Commissioner does 
      not consider that the presumption of willfulness has been rebutted.

      Laches is an equitable defense based on a party's claimed harmful change 
      of condition resulting from the unreasonable delay in another party's 
      assertion of its rights.  In the present case the DHCR is not a party, 
      and the tenant did not unreasonably delay, since the owner was required 
      at the time that the tenant filed her complaint to retain rent records 
      from the base date, and no delays in the earlier proceeding or on appeal 
      are attributable to the tenant.  Furthermore, the owner's argument about 
      a five year delay refers just to the fact that the DHCR, after accepting 
      the tenant's appeal as timely, took that long to inform the owner that 
      it was in fact incorrect in its (rather weak) argument that an appeal 
      received on Monday, June 27, 1988 must have been mailed after Friday, 
      June 24.  In addition, any hypothetical discarding or loss of records by 
      the owner would have been at the risk of its own pending appeal, whether 
      or not the tenant had one pending.  Also, the owner did not initiate a 
      mandamus proceeding to have either or both appeals decided 
      expeditiously.  The Commissioner also notes that there was not, at least 
      recently, any knowing reliance on the DHCR's failure to respond to the 
      owner's assertion that the tenant's appeal was untimely, since the 
      owner's current attorney did not even have copies of the tenant's or the 
      owner's petitions until being sent them in response to the attorney's 
      requests of May 3 and June 6, 1993 respectively.

      Regarding the owner's contention that it is not required to keep or 
      maintain rent records for more than four years prior to the most recent 
      registration, the Commissioner notes that the requirement relates to the 
      time prior to the filing of a complaint, which in this case was in 
      March, 1984, so the owner would be obligated to furnish the lease prior 
      to the tenant's vacancy lease commencing June 1, 1980; that such prior 
      lease in this instance happens to be the first lease after the building 
      was constructed; and that in any event the Appellate Division, First 

          CF410027RT, CF410053RO

      Department in Lavanant v. DHCR, 148 A.D.2d. 185, 544 N.Y.S.2d 331 
      affirmed that Section 2526.1(a)(4) of the current Rent Stabilization 
      Code means that the former Rent Stabilization Code, requiring a rental 
      history from the base date, applies to First Department overcharge cases 
      filed prior to April 1, 1984.

      The Commissioner notes that the 1992 registration shows the subject 
      apartment as being exempt from rent regulation as of June 30, 1989, 
      although in 1990 a tenant was registered with a stabilized lease 
      beginning September 16, 1989.

      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.

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

      ORDERED, that the tenant's petition be, and the same hereby is, granted 
      in part; that the owner's petition be, and the same hereby is, denied; 
      and that the Rent Administrator's order be, and the same hereby is, 
      modified in accordance with this order and opinion.  The lawful 
      stabilization rents and the amount of the rent overcharge are 
      established on the attached chart, which is fully made a part of this 
      order.  The total overcharge is $2,805.12.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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