STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.:
FRANK LOHR & ROGER PAFFITT, RENT ADMINISTRATOR'S
DOCKET NO.: L-3114383
ORDER NO.: CDR 22796 As
------------------------------------x OWNER: BRITTON REALTY CO.
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND MODIFYING RENT ADMINISTRATOR'S ORDER
On November 9, 1988, the above-named petitioners filed a Petition
for Administrative Review against an order issued on October 27,
1988, by the Rent Administrator, 10 Columbus Circle, New York,
New York concerning the housing accommodation, known as 95
Christopher Street, New York, New York, Apartment 16-B wherein
the Administrator amended an order which was issued on April 29,
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 in the administrative appeal.
This proceeding was commenced on March 2, 1984 when the tenants
filed a complaint of general overcharge, alleging that the owner
had failed to provide a rental history for the subject apartment.
The tenants stated they had commenced occupancy on July 22, 1983
pursuant to a lease assignment.
A copy of the complaint was sent to the owner.
In response, the owner submitted a rental history from the base
date, including copies of leases, the assignment agreement, the
Landlord's Report of Statutory Decontrol, Major Capit l Improve-
ment (MCI) rent increase orders, and invoices and cancelled
checks for the installation of new appliances and air condi-
On October 27, 1988, the Administrator issued the order here
under review, amending and superseding an order issued on April
29, 1988, which itself amended an order dated November 5, 1986.
In the order as amended, the Administrator determined that an
overcharge had occurred and directed the owner to refund a total
of $17.07 inclusive of excess security and interest on the
overcharge occurring on or after April 1, 1984.
In the appeal, the petitioners request modification of the order
to determine a greater overcharge and to award treble damages.
The tenants cite two errors in the order:
1. in the explanation of the rent increase on May 1,
1977, there is a discrepancy between the Guide-
lines number and the percentage increase allowed;
2. because the previous rent increase had been
effective on May 1, 1977, a rent increase should
not have been permitted on August 1, 1977, only
three months later.
In reply, the owner contends that the tenants are mistaken as to
the correct Guidelines number and percentage of rent increase
applicable during the pertinent time period. The owner states
that despite a typographical error which did not affect the cal-
culation, the DHCR calculated the rent correctly.
The Commissioner is of the opinion that this petition should be
granted in part.
The Commissioner finds there is an error in the explanation of
the May 1, 1977 rent increase. Section 20A(4) of the former Rent
Stabilization Code precludes the owner from increasing the rent
charged in the initial stabilized lease for a period of one year
or until the expiration of the initial stabilized lease, which-
ever is later. This provision applies specifically "... for
those dwelling units which were subject to the Rent Stabilization
Law as a result of the vacancy, ..." and it estops an owner from
effectuating an otherwise allowable rent increase. As noted in
the rent calculation chart, the initial lease would have termin-
ated on April 30, 1977. Therefore, the stabilized rent was
frozen until May 1, 1977. At that time, the applicable Guideline
was Guideline No. 8 and the appropriate rent increase was at
the rates for a one-year vacancy lease. Although the Adminis-
trator erred in its explanatory portion of the calculations
employed for the May 1, 1977 rent increase, the error was not
material in the determination of the lawful rent. Although cor-
rected by the Commissioner in the chart annexed hereto, this
error was only typographical in effect.
Nevertheless, the tenants' petition must be granted in part
because Division policy dictates that a lease rent in effect for
three months or less cannot be used to support a rent increase.
(Accord: Administrative Review Order No. K 410186-RO). There-
fore, the $525.00 Avigdor rent, which was in effect from May 1,
1977 to July 31, 1977 could not be the base used to compute the
August 1, 1977 initial London and Samaniego rent. Accordingly,
the immediately prior Avigdor rent of $465.00 should have been
The three month rule is usually used at the beginning of a lease
term where allegedly there have been succesive vacancies within
a short period of time and it would be difficult to determine
whether there actually had been the vacancies alleged. Its use
here at the end of a lease term is technically correct; however,
because of its interaction with code Section 20A(4), its appli-
cation herein produces a particularly harsh result. Here, there
is no question of the vacancy. But for Section 20A(4) the owner
would have been entitled to a vacancy increase at the beginning
of the Avigdor tenancy. Accordingly, with due consideration of
all factors bearing upon the equities involved, pursuant to Code
Section 2522.7, the Commissioner determines that the lawful sta-
bilized rent as of August 1, 1977 should include the 5% vacancy
increase eliminated by the three month rule.
Section 25-516(a) of the Rent Stabilization Law provides for
treble damages to be awarded unless "the owner establishes by a
preponderance of the evidence that the overcharge w s not will-
ful." A lack of willfulness is presumed where, as here, the
overcharge is caused by the hypertechnical nature of the rent
computation, e.g., violation of the three month rule. See Order
Nos. BK 110266-RO and CG 110199-RT. Accordingly, the Commis-
sioner directs the refund of the overcharges of $2,860.85 but
denies the petitioner's request for treble damages.
Upon the expiration of the period in which the own r may insti-
tute a proceeding pursuant to Article 78 of the Civil Practice
Law and Rules, this order may be filed and enforced as a judg-
ment, or the tenants may offset against any rent thereafter due
the owner not in excess of twenty percent per month of t e over-
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be, and the same hereby is, granted
in part and that the Rent Administrator's order be, and the same
hereby is, modified in accordance with this order and opinion.