DF 110410 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
          APPEAL  OF                                DOCKET   NO.   DF   110410-RO
                                                          
                                                 DISTRICT RENT ADMINISTRATOR'S
            CIAMPA BELL COMPANY,                 DOCKET NO. AD 110196-R  

                                                 TENANT: Roni Hefetz
                                PETITIONER     
          ----------------------------------X                           
            
            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

          On June 13, 1989, the  above-named  owner  filed  a  petition  for
          administrative review of an order issued on  May  10,  1989  by  a
          District Rent Administrator concerning the  housing  accommodation
          known as Apartment 504, 16-70 Bell Boulevard,  Bayside,  New  York
          wherein  the  Administrator  determined  that  an  overcharge  had
          occurred.

          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 by the petition for review.

          This proceeding was commenced on April 19, 1986 upon the filing of 
          a general complaint of rent overcharge by the tenant.  The  tenant
          stated that he had taken occupancy of  the  subject  apartment  on
          October 1, 1985 and that he suspected he was being overcharged.

          In its answer, the owner alleged that the  subject  premises  were
          part of the 421-A Tax Abatement Program.  The owner  alleged  that
          the subject premises were completed on September 21, 1973 and  the
          building  became  eligible  for  the  tax  abatement  benefits  on
          November 13, 1973.  It is further alleged, th t  the  complainant-
          tenant became  the  first  tenant  after  expiration  of  the  tax
          benefits and after a vacancy occurred.   Based  on  Section  421-a
          (2)(f)(i) of the Real Property Tax Law, the owner alleged that the 
          subject apartment was no longer within  the  jurisdiction  of  the
          Rent Stabilization Law.  The owner submitted various documents  to
          corroborate its factual allegations, to  wit:   a  Certificate  of
          Eligibility for the Tax Abatement Program, the  initial  Apartment
          Registration (RR-1), the annual Apartment Registration (RR-2A) for 
          1986, and a complete lease history of the subject  apartment.   In
          addition, the owner submitted copies of two Administrator's orders 
          issued  February  10,  1987  and  July   7,   1987   wherein   the
          Administrator, under  a  similar  set  of  facts,  declared  other
          apartments in the subject building to be outside the  jurisdiction
          of the Rent Stabilization Law.






          DF 110410 RO

          On April 4, 1989, the  owner  was  sent  notice  of  the  proposed
          imposition of treble damages on the  overcharge.   The  owner  was
          afforded a final opportunity to submit evidence to rebut a finding 
          that the overcharge was willful.

          In the order here under review, the Administrator determined  that
          the subject building was  within  the  jurisdiction  of  the  Rent
          Stabilization Law and that  an  overcharge  occurred.   Also,  the
          Administrator found that the owner failed to sustain its burden of 
          proof in showing a lack of willfulness and imposed treble damages. 
          The lawful stabilization rent was established at $990.26  for  the
          lease period of October 1, 1987 through September 30, 1989 and the 
          owner was ordered to refund $11,949.21  in  overcharges  collected
          through  May  31,  1989,  including  treble  damages  and   excess
          security.

          In its petition for  administrative  review,  the  owner  requests
          reversal of the Administrator's order.  First, the  owner  alleged
          that it was deprived of due process.  The owner  asserts  that  it
          had requested on April 27, 1989 an extension of  time  to  respond
          to the final notice of the possible imposition of  treble  damages
          until May 25, 1989.  The  letter  stated  that,  unless  otherwise
          advised, the owner would assume the extension  was  granted.   The
          owner contends that due process was denied because  the  extension
          request was not specifically rejected and the order was issued  on
          May  10,  1989.   Second,  the  owner  alleges  that  the  subject
          apartment is not within the jurisdiction of the Rent Stabilization 
          Law  because  the  tax  abatement  benefits  had  expired  and   a
          subsequent vacancy had occurred.  Third, the  owner  contends,  in
          the alternative, that treble damages should not have been imposed. 
          The owner bases this contention on its opinion that the owner  had
          reasonably interpreted the law and that the owner  had  reasonably
          relied on the two subsequently issued  Administrator's  orders  to
          reinforce its opinion.  Accordingly,  it  is  contended  that  the
          record does not support a determination that the  overcharges,  if
          any, were willful.  The owner alleges that  any  overcharges  were
          "hypertechnical" in nature.

          The tenant filed an answer to the owner's petition requesting that 
          the Administrator's order be affirmed.

          After careful consideration, the Commissioner is  of  the  opinion
          that this petition should be denied.

          First, the Commissioner finds that the owner has not  been  denied
          due process protections.  The granting or  denying  of  a  party's
          request  for  an  extension  of  time  to  respond  is  totally  a
          discretionary decision of the rent agency.  A party may not assume 
          that the request for an extension has been granted.   However,  in
          order to ensure the full protection of  the  owner's  due  process
          rights,  the  Commissioner  will  fully  consider  the  vigorously
          presented arguments made by the owner in its petition  for  review
          on the issue of treble damages.






          DF 110410 RO

          Second, the Commissioner  finds  that  the  subject  apartment  is
          within the jurisdiction of the Rent Stabilization Law despite  the
          fact that  the  owner's  tax  abatement  benefits  expired  and  a
          subsequent vacancy occurred.  Originally, the subject building was 
          rent-regulated solely by  virtue  of  the  owner's  receiving  421
          benefits.   In  1974,  Section  8625  of  the   Emergency   Tenant
          Protection Act also provided that the subject buildi g  was  rent-
          regulated.    Currently,   Section   2520.11(p)   of   the    Rent
          Stabilization Code is the applicable  law.   This  section  states
          that in order for an apartment building to become  deregulated  it
          must have been completed after January 1, 1974 and was subject  to
          regulation solely because the owner was  receiving  tax  benefits.
          Clearly, the subject premises in the instant case, completed prior 
          to January 1, 1974, do not qualify as an exception and remain rent 
          regulated.

          When the subject  building  was  constructed  in  1973,  the  Rent
          Stabilization Law provided that only  buildings  of  six  or  more
          units  constructed  before  March  1969  were  subject   to   rent
          regulation.  The building was subject to  the  Rent  Stabilization
          Law  beginning  in  1973  solely  by   virtue   of   the   owner's
          participation in the 421 partial tax exemption program.   However,
          with the passage of the Emergency Tenant Protection Act  of  1974,
          all buildings built before January 1, 1974 became subject  to  the
          Rent Stabilization Law.  The fact that  this  building  had  first
          become subject to the Rent Stabilization Law by virtue of the  421
          program did not now  distinguish  this  building  from  any  other
          building built before January 1, 1974.  The continuing receipt  of
          the 421 benefits no longer had any  relevance  to  the  buildings'
          rent regulation status.

          The owner relies on Section 421-a(2)(f)(i) of  the  Real  Property
          Tax Law to support its assertion that the subject premises  should
          not be subject to regulation.  The Commissioner is of the  opinion
          that this section  does  not  apply  in  the  instant  case.   The
          original Section 421-a(2)(f) stated that  when  the  tax  benefits
          expire the subject premises' rents ". . .  shall  be  decontrolled
          unless immediately prior to such expiration such rents would  have
          controlled by the provisions of any law  other  than  pursuant  to
          this section. . ."  Clearly, this section alerts the owner to  the
          applicability of Section  2520.11(p)  of  the  Rent  Stabilization
          Code, which provided that the rents of the subject  premises  were
          subject to regulation.

          The amended Section 421-a(2)(f)(i), upon which the  owner  relies,
          became effective July 3, 1984.   This  amendment  states  that  it
          applies "with respect to units subject to the provisions  of  this
          section on the effective date of this subparagraph. .  ."   It  is
          uncontested that the subject premises'  tax  benefits  expired  on
          November 13, 1983.  Clearly, this amendment did not apply  to  the
          subject premises because  the  tax  benefits  expired  before  the
          effectuation date of the amendment.






          DF 110410 RO

          Finally, the Commissioner is of the opinion  that  treble  damages
          were  correctly  imposed.   The  owner  alleges  that  the  record
          indicates no evidence of willfulness.  The Commissioner notes that 
          Section  2526.1  of  the  Rent  Stabilization  Code  requires  the
          Administrator to assess treble damages unless the owner  proves  a
          lack of willfulness.  The owner began to overcharge the tenant  on
          October 1, 1985.  This overcharge  was  based,  according  to  the
          owner, on ignorance of  the  law.   The  overcharge  was  not,  as
          maintained by the owner,  based  on  an  interpretive  view  of  a
          clearly written regulation.  Nor was the overcharge, as maintained 
          by the owner, based on a "hypertechnical" calculation error.   Nor
          was the overcharge, as maintained by the  owner,  based  on  other
          Administrator's orders.  These orders were  issued  subsequent  to
          the owner's initial overcharge.   Clearly  the  owner  cannot  now
          contend that it reasonably relied on these orders in an effort  to
          show a lack of willfulness.  It is also  noted  that  these  other
          orders were reopened and corrected  by  the  Administrator  months
          after they were issued.  Therefore, the  Commissioner  finds  that
          the owner failed to sustain its burden of proof in demonstrating a 
          lack of willfulness.

          Accordingly, the Commissioner finds  no  basis  for  reversing  or
          modifying the Administrator's order.

          THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

          ORDERED, that this petition be, and the same  hereby  is,  denied,
          and that the Administrator's order be, and  the  same  hereby  is,
          affirmed; and it is

          FURTHER  ORDERED,  that  the  owner  Ciampa  Bell  Company   shall
          immediately refund to the tenant  all  amounts  not  yet  refunded
          representing overcharges, treble damages and excess security;  and
          it is

          FURTHER ORDERED, that if the owner Ciampa  Bell  Company  has  not
          refunded the stated amounts upon the expiration of the period  for
          seeking judicial review  pursuant  to  Article  78  of  the  Civil
          Practice Law and Rules the tenant  may  recover  such  amounts  by
          deducting them from the rent due to the owner.  If the  owner  has
          refunded no such amounts and the tenant has not made any such 
          deductions from his rent as an offset, then the  tenant  may  file
          and enforce a certified copy of this order as a judgment  for  the
          amount of $11,949.21 against Ciampa Bell Company.

          ISSUED:




                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner

    

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