AR Docket Nos. DC 410157-RO, DD 410018-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
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEALS OF DOCKET NOS.: DC 410157-RO
DD 410018-RO
ALFRED M. GRONER
(THREE-ODD-NINETY-FOURTH DRO ORDER NO.: CDR 27,516
ASSOCIATES) AND FAITH As Amended
MINISTRIES, INC.,
DRO DOCKET NO.:
CH 410037-RP; (TC-082675-G)
TENANT: Ellen Landesberg
PETITIONERS
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ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE
REVIEW IN PART
On March 14, 1989, the above named petitioner-prior-owner, Alfred
M. Groner [Three-Odd-Ninety-Fourth Associates], filed a Petition
for Administrative Review against an order issued on February 28,
1989, by the Rent Administrator at 10 Columbus Circle, New York,
New York, concerning housing accommodations known as apartment
number 3 at 329 East 94th Street, New York, New York, wherein the
Administrator established the stabilized rent and directed the
owner to refund $11,563.71, including interest from April 1, 1984.
On April 4, 1989, the above named petitioner-owner, Faith
Ministries, Inc. filed a Petition for Administrative Review
against said order. Pursuant to Section 2529.1(c) of the Code
effective May 1, 1987, these petitions are consolidated herein.
The Commissioner notes that this proceeding was initiated prior to
April 1, 1984. Sections 2526.1(a)(4) and 2521.1(d) of the Rent
Stabilization Code (effective May 1, 1987) governing rent
overcharge and fair market rent proceedings provide that
determination of these matters be based upon the law or code
provisions in effect on March 31, 1984. Therefore, unless
otherwise indicated, reference to Sections of the Rent
Stabilization Code (Code) contained herein are to the Code in
effect on April 30, 1987.
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 February 16, 1984 by
the filing of a complaint of rent overcharge with the New York
City Conciliation and Appeals Board (CAB, the agency formerly
charged with enforcing the Rent Stabilization Law) by the tenant.
Based on the failure of any prior or current owner to submit a
complete rental history, a default procedure was used to fix the
stabilized rent. To correct various procedural defects that had
appeared therein, the Administrator's original order of November
AR Docket Nos. DC 410157-RO, DD 410018-RO
24, 1986 was twice amended. The next to the last order issued
hereinbelow was issued on October 5, 1987.
Thereafter, the tenant asked for reconsideration of the order
issued on October 5, 1987, to correct the designations made in
that order as to the current and prior owners and to apportion the
responsibility for the refund between the current and prior
owners. Notice of this application was served on the Petitioners
and they were afforded an opportunity to comment thereon.
By letter dated December 6, 1988, Alfred M. Groner answered the
application by advising the Administrator that the subject
building had been sold to L.C. Realty Corporation (L.C.) in 1983;
that L.C. was located at 101 Park Avenue c/o Dreyer and Traub
(Attorneys-at-law) and that all inquiries regarding the subject
building should be sent to L.C.
Notice of that application was also sent to S & G Management (the
managing agent for L.C.) addressed to that firm at P.O. Box 4405,
Flushing, New York 11360-4405. The answer received to that notice
was delivered by return mail in an envelope with a handwritten
return address that read "Faith Ministries, P.O. Box 4405, Bay
Terrace, New York 11360." The answer was signed by "M. Delgado"
and the signature was described, by M. Delgado, as the signature
of "previous reg.[istered] agent." The answer stated, in
substance, the following:
1) L.C. mail must be addressed to P.O. Box 4405, Bay
Terrace, NY 11360.
2) The tenant was in occupancy prior to L.C.'s
acquisition of the above premises and therefore L.C.
should not be subject to treble damages.
3) The tenant took occupancy on September 15, 1982,
which was prior to L.C.'s purchase of the building on
September 21, 1983. L.C.'s renewal lease with the
tenant accorded with the applicable Guidelines.
Therefore, L.C. should not be subject to treble damages.
3) The tenant vacated before the expiration of the L.C.
renewal lease.
4) Faith Ministries, Inc. [L.C.'s devisee] took title a
number of years after the tenant had vacated.
AR Docket Nos. DC 410157-RO, DD 410018-RO
5) L.C., was not given "decontrol papers" for the
apartment by the prior owner; but a copy of a previous
lease was provided and is enclosed herewith [no such
lease was found in the record as a part of this answer].
On February 28, 1989, the tenant's application was granted by the
issuance of the appealed order. Faith Ministries, Inc. was named
therein as the current owner. L.C. Realty Corp. was named as the
2nd prior owner and S & G Management was named as the present and
2nd prior managing agent. Three-Odd-Ninety-Fourth Associates c/o
Alfred M. Groner, 575 8th Avenue, New York, New York 10018 was
named therein as the 1st prior owner. Troy Ventures c/o J.L.
Madison Properties Ltd. was named in the order, but its status was
not made clear. J.L. Madison Properties, Ltd c/o 329 Associates
was named as the 1st Managing Agent. On the chart attached to and
made a part of the order, the Administrator established the
stabilized rent under the tenant's September 15, 1982 to September
14, 1983 lease at $635.00 and under the tenant's January 1, 1984
to December 31, 1984 lease at $660.40. The order contained no
specific provision directing an apportionment of the refund due
among the various prior owners and the current owner.
In the Petition signed by Alfred M. Groner, and wherein Alfred M.
Groner is named as the Petitioner, it is asserted that the
Administrator erred in holding Three-Odd-Ninety-Fourth Associates
responsible for any portion of the overcharges to be refunded
because Three-Odd-Ninety-Fourth Associates had sold the building
on March 28, 1983 and all records pertaining to this case were
transferred at that time.
The tenant has filed an answer opposing that Petition. The tenant
states that Three-Odd-Ninety-Fourth Associates was the owner of
the subject building during a period that the tenant resided there
and during which period overcharges were collected by said prior
owner from the tenant (to wit, September 15, 1982 to August 30,
1983). The tenant asserts that pursuant to the Rent Stabilization
Code effective May 1, 1987 (Section 2526.1) the petitioner should
be held liable for the overcharges it collected.
Styled as a response to the tenant's answer, the Commissioner
received an application filed by the attorney for Alfred M.
Groner. This application made reference to PAR docket numb r DC-
410157-RO and sought "dismissal of all proceedings as to Alfred M.
Groner." Various documents were submitted with said application.
In a surreply to this application, the tenant argues that her
claim is against a number of companies and that as a limited
partner of Three-Odd-Ninety-Fourth Associates, Alfred Groner,
(despite any right to indemnification that he may have against the
AR Docket Nos. DC 410157-RO, DD 410018-RO
General Partner) is liable to the tenant based on the overcharges
collected.
In the Petition of Faith Ministries, Inc. the current owner
alleges the following, in substance:
1. L.C. Realty did not acquire title (or collect rents)
until September 21, 1983. The prior owners were
responsible for setting the tenant's initial rent. L.C.
relied on that figure in setting the renewal lease rent.
2. The tenant never entered into a renewal lease with
L.C.
3. The tenant vacated owing more than four (4) months
back rent.
4. The tenant had vacated long before November, 1984,
by which time the apartment had already been rented to
another tenant.
5. Faith Ministries, Inc. never collected any rent from
the tenant. The tenant had vacated by the time Faith
Ministries Inc. took title.
6. L.C. did not get a complete rental history from the
prior owner.
The tenant has interposed an answer in opposition to the Petition
of Faith Ministries, Inc. The tenant asserts, in substance, as
follows:
1. Three-Odd-Ninety-Fourth Associates c/o Alfred Groner
did execute the tenant's first lease.
2. Three-Odd-Ninety-Fourth Associates did collect the
tenant's rent until September of 1983.
3. The tenant did enter into a renewal lease with L.C.
Realty Corp. [the tenant annexed a copy of a lease
between L.C. Realty and herself dated December 5, 1983
for a term which commenced on January 1, 1984 and
expired on December 31, 1984 at a monthly rental of
$660.40].
4. The tenant does not owe any rent arrears. She was
never informed [prior to receipt of a copy of Faith
Ministries's Petition] of that charge. Further, the
tenant questions the basis of Faith Ministries's
AR Docket Nos. DC 410157-RO, DD 410018-RO
interest in said alleged arrears if it was not her
landlord.
5. The tenant vacated the apartment around August or
September of 1984. [Subsequent to the filing of this
answer in opposition, in a telephone conversation with a
member of the Division's staff, the tenant revised this
statement indicating that she had vacated by the time
she had filed her February 5, 1984 complaint and that
she may have vacated in January of 1984.]
6. To the best of the tenant's knowledge, she never
wrote a rent check that was payable to Faith Ministries,
but may have written one payable to one of Faith
Ministries's managing agents.
7. Whether the prior owner ever gave L.C. Realty Corp.
a complete rental history is not something the tenant
should comment on.
The Commissioner is of the opinion that both of the Petitions
should be granted in part and that the Administrator's order
should be amended in accordance with this order and opinion.
The Commissioner finds that it is clear from the record herein,
and especially from the complaint itself (which states that the
tenant's mailing address was 333 East 14th Street, New York, New
York), that the tenant had vacated the subject apartment as of
January 31, 1984. Since the complaint was signed on February 5,
1984, the Commissioner finds that the order below, wherein the
overcharges were calculated on the basis that the tenant had
continued in occupancy through December 31, 1984, must be amended
by reducing the total overcharges to be refunded to the sum which
the Administrator found had been collected as of January 31, 1984;
that is to $5,900.38.
The Commissioner notes that the Administrator's order indicated
that no rent had been paid from September 15, 1983 through
December 31, 1983: no overcharges were found for that period.
However, the Commissioner notes that that order indicated that
overcharges had been collected subsequent to December 31, 1983 at
the rate of $461.38 per month.
The Commissioner notes that the record shows that Alfred M. Groner
was the president of Meah Achuz Corp., which took title on April
15, 1981 and then deeded the property to Three-Odd-Ninety-Fourth
Associates on April 27, 1981; that at that time Alfred M. Groner
and his wife Jeanne we e limited partners of Three-Odd-Ninety-
Fourth Associates and Jay Weiss was the General Partner. The
AR Docket Nos. DC 410157-RO, DD 410018-RO
record also shows that Jay Weiss was the president of J.L. Madison
Properties, Ltd. on October 14, 1982 and that Alfred M. Groner
held a mortgage on 329-339 East 94th Street. The record further
shows that on March 28, 1983, Three-Odd-Ninety-Fourth Associates
deeded the subject building to 329 Associates and that Jay Weiss's
sister, Lauri Soldinger was the General Partner of 329 Associates.
The record also shows that on September 15, 1983, 329 Associates
deeded the property to L.C. Realty Corporation. The Commissioner
also notes that the record shows that on October 27, 1983, Jay
Weiss, as General Partner of "Three Odd Associates" wrote to
Alfred Groner with regard to the distribution of the proceeds of
the sale of the subject building. In that letter, Jay Weiss
referred to his funding $6,000.00 to the Partnership after April
1, 1983. That letter also shows that the Partnership had obtained
three mortgages on the properties (329-339 East 94th Street)
totalling $360,000.00 at various interest rates. The Commissioner
further notes that Troy Ventures, "as agent", was named as the
owner on the tenant's vacancy lease (September 15, 1982 -
September 14, 1983).
The Commissoner therefore finds that the record shows that there
was a relationship between the various owners of the property
which held title between September 15, 1982 and September 14, 1983
and their agents (Three-Odd-Ninety-Fourth Associates, Jay Weiss,
329 Associates, Lauri Soldinger, Troy Ventures and J.L. Madison
Properties Ltd.) such that each of them is jointly and severally
liable for the full amount of said overchages; that is for
$5,439.00.
The Commissoiner notes that the record shows that, by a deed
dated August 10, 1987, L.C. Realty Corporation deeded the subject
property to Faith Ministries, Inc. The record indicates that said
deed was signed by Lydia Delgado as President of L.C. Realty
Corporation. The record also shows that Lydia Delgado was the
president of L.C. Realty's managing agent, S & G Management, on
October 12, 1984 and that L. Delgado signed the PAR filed by Faith
Ministries, Inc.
The Commissioner therefore finds that there was a relationship
between L.C. Realty Corp, S & G Management and Faith Ministries
such that they are jointly and severally liable for the
overcharges the Administrator found had been collected from
September 15, 1983 through January 31, 1984; that is for $461.38.
Therefore, the Commissioner finds that the Administrator's order
should be modified in accordance with this order and opinion.
As to the application of Alfred M. Groner to have "all proceedings
dismissed as to him", the Commissioner believes that that
application should be, and the same hereby is denied. The
Commissioner cannot make a finding, based on this record, as to
AR Docket Nos. DC 410157-RO, DD 410018-RO
whether or not Alfred M. Groner may ultimately be liable for any
portion of the pre-September 15, 1983 overcharges as a tranferee,
a responsible party or otherwise. Therefore, the Commissioner
finds that it would be inappropriate to dismiss all proceedings as
to Alfred M. Groner.
The Commissioner notes that this order and opinion may, upon the
expiration of the period in which the owner and prior owners 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.
Moreover, in light of the fact that the record herein indicates
that the tenant no longer occupies the subject accommodation, a
copy of this Order and Opinion is being sent to the present
occupant of the subject accommodation. The Commissioner advises
the owner to update the registration statement for the subject
accommodation (if it has not already done so) to reflect the
change in occupancy and the stabilized rent determined in the
Administrator's order below.
THEREFORE, pursuant to the Rent Stabilization Law and Code, it is
ORDERED, that these petitions be, and the same hereby are granted
in part; and that the Administrator's order be, and the same
hereby is amended in accordance with this order and opinion.
ISSUED:
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JOSEPH A. D'AGOSTA
Deputy Commissioner
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