DA 110060-RT/DA 110125-RO
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
------------------------------------X S.J.R. 6042
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. DA 110060-RT
DA 110125-RO
Michelle Gani, tenant, : DISTRICT RENT OFFICE
and
Raya Management Co., owner, DOCKET NO. 000032601
TENANT: Michelle Gani
PETITIONER :
------------------------------------X
ORDER AND OPINION DENYING OWNER'S AND GRANTING TENANT'S
PETITIONS FOR ADMINISTRATIVE REVIEW
On December 30, 1988, the above-named petitioner-tenant filed a
Petition for Administrative Review against an order issued on
November 30, 1988, by the Rent Administrator concerning the
housing accommodations known as 26-27 28th Street, Long Island
City, New York, New York, Apartment No. 3-A, wherein the Rent
Administrator determined that the owner had overcharged the
tenant.
On January 2, 1989, the above-named petitioner-owner filed a
Petition for Administrative Review against the same order.
Subsequent thereto, the petitioner tenant filed a petition in the
Supreme Court pursuant to Article 78 of the Civil Practice Law
and Rules requesting that the "deemed denial" of the petitioner's
administrative appeal be annulled. The proceeding was then
remitted to the DHCR for a determination of the petitioner's
appeal.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2526.1 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order was
warranted.
Due to the unavailability of original documents, the case file has
been reconstructed out of resubmissions from the parties.
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 on
September 11, 1984 of an objection to the registered rent and
services by the tenant who stated in substance that she had
DA 110060-RT/DA 110125-RO
assumed occupancy of the subject premises in May, 1982 pursuant to
a one year lease at a rent of $295.00 per month. Subsequently,
her rent was increased to $327.00 per month for a one year lease,
and to $382.00 per month for a three year lease. Enclosed with
the complaint were copies of the tenant's leases, and copies of
cancelled checks verifying payment in those amounts.
The owner was served with the complaint and directed to submit a
complete lease history to establish the lawfulness of the
registered rent. The owner failed to comply with this request.
On July 7, 1988 a final notice of pending default was mailed to
the owner.
In Order Number 32601, issued on November 30, 1988, the Rent
Administrator established the lawful stabilization rent as
$230.47, in accordance with default procedures, effective at the
tenant's occupancy in May, 1982, and determined that the tenant
had been overcharged in the amount of $7,178.04 including excess
security and treble damages on that portion of the overcharge
collected on and after April 1, 1984. The rent calculations chart
included with the order stated that the tenant paid rent of
$295.00 for the two year lease term from May, 1982 through April,
1984 and $307.00 for the subsequent three year term ending on
April 30, 1987.
In its petition, the owner alleges in substance that it was
unable to submit the lease history when asked before because the
documents were located in the office of the attorney who had
handled the case. The owner was, however, submitting them with
the petition. Enclosed with the petition were two one year
leases covering the period from July, 1980 through June, 1982 at
rents of $241.88 and $268.49, respectively. The owner also
protested the treble damages penalty because the record did not
establish that overcharges were willful.
In her petition, the tenant disputes the amounts of actual rent
paid and the length of her leases that were used in the
calculation chart, claiming that these errors resulted in
reduced overcharges. Specifically, she attests to an initial
lease of only one year at a rent of $295.00, a subsequent one year
lease of $327.00 and then a three year lease at a rent of $382.00.
The tenant uses the lease amounts to recalculate the lawful rent
and total overcharges according to the guidelines. This results
in an increase of overcharges, including treble damages, as
before, to $14,656.28, from $7,178.04.
In response, the owner restates the same arguments from its
petition.
The Commissioner is of the considered opinion that the tenant's
petition should be granted, that the owner's petition be denied
and that the Administrator's order should be modified.
As properly based upon the owner's unexplained failure to provide
a lease history, the Rent Administrator made a determination of
the lawful rent in accordance with established procedures in cases
of the owner's default. For the first time on appeal, the owner
now attempts to submit the two leases immediately prior to the
DA 110060-RT/DA 110125-RO
complainant's occupancy, explaining that they had been retained by
the owner's attorney and were thus unavailable. This tactic will
not be fruitful, however. It is long established that new
evidence will not be considered for the first time on appeal. The
explanation offered by the owner, even if it were supported by
independent evidence, is patently insufficient to provide any
basis for abandoning a dependable and fair procedure. The
Commissioner notes as well that the two leases that the owner
finally did submit, reaching back to only July 1, 1980, still fail
to comprise the complete lease history required for the
determination of the initial legal regulated rent, under Section
2526.1(a)(3)(ii) of the current Rent Stabilization Code, which
mandates documentation of the rent paid on April 1, 1980.
Section 26-516 of the Rent Stabilization Law provides that any
owner who is found by the DHCR to have collected an overcharge
shall be liable to the tenant for treble damages unless the owner
establishes by a preponderance of the evidence that the overcharge
was not willful, in which case interest shall be imposed. Section
26-516 also provides that treble damages shall be applied only to
overcharges occurring on or after April 1, 1984.
In the instant case, the owner was notified during the proceeding
before the Administrator that a determination of rent overcharge
would result in the assessment of treble damages unless the owner
established that the overcharge was not willful. The owner failed
to submit such evidence. Therefore the Commissioner finds that
the Administrator's determination to impose treble damages is
correct.
The evidence further establishes that the tenant's revised lease
history, which she documents with copies of the leases, and which
is not disputed by the owner, results in increased overcharges and
a reduced lawful rent, as correctly calculated in the tenant's
petition. The revised rent calculations are as follows:
Lease Rent Paid Legal Rent Overcharges
5/1/82 - 4/30/83 $295.00 $230.47 $64.53 x 12
(by default) mos. =
$774.36
5/1/83 - 4/30/88 $327.00 $239.69 $87.31 x 12
(Guideline 14 inc. mos. =
4% over 9/30/82 $1,047.72
rent of $230.47
= $239.69)
5/1/84 - 4/30/87 $382.00 $263.66 $118.34 x
(Guideline 15 inc. 36 mos. x 3
10% over 9/30/83 = $12,780.72
rent of $239.69
= $263.66)
Adding excess security of $118.34, total overcharges are thus
increased to $14,721.24.
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
DA 110060-RT/DA 110125-RO
manner as a judgment or not in excess of twenty percent per month
thereof may be offset against any rent thereafter due the owner.
THEREFORE, pursuant to 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; and that the Administrator's order be, and the same
hereby is, amended in accordance with this order and opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
DA 110060-RT/DA 110125-RO
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