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STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X SJR No. 4591
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE APPEAL
APPEAL OF DOCKET NO. CL 110106 RO
Argo Corporation, DISTRICT RENT OFFICE
DOCKET NOS. TC 081809 G/
Tenant: Joan M. McNulty
ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE
This order and opinion is issued after an order of the Supreme
Court, Queens County, Justice Joan Marie Durante, dated May 17,
1990, ordered remit of an Article 78 proceeding directing the
Division to reconsider its former order and opinion issued on
September 29, 1989, on the basis of the decision in J.R.D. Mgmt. v.
Eimicke 148 A.D.2d 610, 539, N.Y.S. 2d 667 (App. Div. 2d Dept.,
1989) (hereafter JRD).
The Commissioner has reviewed all of the evidence in the record and
has carefully considered that portion of the evidence relevant to
the issues raised in the administrative appeal.
This proceeding was originally commenced on January 27, 1984 by the
filing of a rent overcharge complaint concerning the housing
accommodation known as apartment 4T, 65-65 Wetherole Street, Rego
Park, New York.
In the order issued on October 26, 1988, the Rent Administrator,
92-31 Union Hall Street, Jamaica, New York, established the Legal
Stabilized Rent and directed the owner to refund $5,729.69,
including interest on the overcharge from April 1, 1984.
On December 5, 1988, the above-named petitioner-owner filed a
Petition for Administrative Review against the Administrator's
order. Subsequently, by an order issued on January 19, 1989, said
petition was dismissed as untimely filed. Thereafter, the
petitioner filed a petition in Supreme Court, Queens County,
requesting that the dismissal of the petitioner's administrative
appeal be annulled.
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Thereafter, with the consent of the parties, the proceeding was
remitted by Court order to the Division for a new determination.
Argo Corp v. DHCR, index no. 19665/89 (Sup. Ct., Queens County,
Durante, J. 5/17/90).
In its petition, the owner contends that the Administrator erred in
calculating the rent by failing to acknowledge that:
1) the Administrator's determination contravenes an order issued
on August 29, 1986 under Docket #Q3121005 R in which the
Administrator dismissed an earlier rent overcharge complaint
on the basis of an Assurance of Discontinuance entered into
between the owner and the New York State Attorney General;
2) the tenant vacated in April 1985; and
3) the order provides for a refund of excess security of $159.95
but this security was previously adjusted when the tenant
Although afforded the opportunity to do so, the tenant did not
interpose an answer to the owner's petition.
The Commissioner is of the opinion that this petition should be
granted in part.
The Commissioner finds that it cannot be said that the instant
complaint was barred by the order issued on August 29, 1986 since
the validity of that order is in serious doubt.
That order purports to have been based upon an Assurance of
Discontinuance entered into between the owner and the Attorney
General of the State of New York. An Assurance of Discontinuance
provides only that the Attorney General will cease proceeding
against the other party. Neither the Division nor the tenant was
party to the proceeding in which the Assurance of Discontinuance
was issued; therefore, the Administrator was in error in relying
Accord: ART 10040 Q, AL 410421 RO. Nevertheless, as the owner
pointed out in its most recent Article 78 proceeding, it appears
that the tenant did not appeal the determination dismissing the
The Commissioner notes that in its Article 78 petition of November
8, 1989, the owner argued at length to the effect that an
administrative agency "only has the power to reopen a previously
decided case on the ground of illegality, irregularity in a vial
matte or fraud when that power or authority is contained within the
Agency's enabling statute and therefore, the Commissioner was bound
by the August 29, 1986 order.
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The Commissioner finds that the Rent Stabilization Code effective
May 1, 1987 was amended, pursuant to Chapter 888 of the Laws of
1985, Section 26-511 [of the Rent Stabilization Law] McKinney's
Unconsolidated Law, volume 65) to provide at Section 2527.8 that
the DHCR, on application of either party, or on its own
initiative, and upon notice to all parties affected, may
issue a superseding order modifying or revoking any order
issued by it under this or any previous Code where the
DHCR finds that such order was the result of illegality,
irregularity in vital matters, or fraud.
The Commissioner, therefore, concludes that it is within the
Division's power to so act, in accordance with the regulations it
has promulgated and which have the force of law until amended or
set aside by judicial action. Given that neither the tenant nor
the DHCR was a party to the Assurance of Discontinuance and nothing
therein may be construed to deprive the tenant of pursuing any
right in a Court of competent jurisdiction or before the DHCR, the
Commissioner finds that the order dismissing the complaint was
based upon an error in law and should be set aside pursuant to
Section 2527.8 of the Rent Stabilization Code as a result of an
irregularity in a vital matter.
Accordingly, the Commissioner determines that order no. 21,648
issued on August 29, 1986 should be vacated and its underlying
overcharge complaint should be reinstated and consolidated with the
complaint filed in this proceeding.
The Commissioner notes that the record contains a letter from the
tenant dated April 18, 1985 in which the tenant advised the
Division that she had a new address. Accordingly, the Commissioner
finds that the owner's allegation that it did not collect any
overcharges for the months of April through September 1985 is
Since it is common practice to return a security deposit when the
tenant vacates and since the tenant herein has remained silent on
the issue, the Commissioner determines that the excess secuirty has
already been returned to the tenant.
In accordance with the foregoing the Commissioner finds that the
Administrator's order should be modified reducing the amount of the
overcharge to $4,547.03.
This figure is arrived at by deducting from the overcharges found
by the Administrator, $5,729.69, the portion thereof generated by
the overcharges, including interest, erroneously assessed for the
months of April through September 1985 ($1022.71) and the excess
security ($159.95). Further the lawful stabilization rent for the
subject apartment is $391.25 as of October 1, 1984.
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It is noted that pursuant to the JRD decision for apartments in the
Second Department, DHCR could not require an owner to produce more
than four years of rent records.
In the instant case JRD limits the requirement for rent records to
April 1, 1980. An examination of the rent records from April 1,
1980 discloses there was no rent overcharge until September 15,
1982 and thereafter and that the overcharge from September 15, 1982
until the tenant vacated was $4,547.03 as previously mentioned.
Therefore JRD did not preclude the finding of a rent overcharge in
This order may, upon the expiration of the period in which the
owner may institute a proceeding pursuant to Article Seventy-Eight
of the Civil Practice Law and Rules, be filed and enforced by the
tenant in the same manner as a judgment.
If the owner has already complied with the Administrator's order
and there are arrears due to the owner as a result of the instant
determination said arrears shall be payable immediately. A copy of
this order is being sent to the current occupant of the subject
THEREFORE, pursuant to the Rent Stabilization Law and Code, it is
ORDERED, that the Petition be, and the same hereby is granted in
part; and that the Administrator's order be, and the same hereby is
amended in accordance with this order and opinion.
Joseph A. D'Agosta
Acting Deputy Commissioner