DA 110060-RT/DA 110125-RO

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

          ------------------------------------X  S.J.R. 6042
          APPEAL OF                              DOCKET NO. DA 110060-RT
                                                            DA 110125-RO

               Michelle Gani, tenant,         :  DISTRICT RENT OFFICE
               Raya Management Co., owner,       DOCKET NO. 000032601

                                                 TENANT:    Michelle    Gani
                                PETITIONER    : 


          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

          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

          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

          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

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          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

          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

          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. =

          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.  


                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner


          DA 110060-RT/DA 110125-RO


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