DH 110052-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
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: DH 110052-RO
DISTRICT RENT OFFICE
Van Kleeck Assoc., DOCKET NO.: Q 3122532-R/T
TENANT: Jesse Winley
PETITIONER
------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On August 4, 1989, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
July 3, 1989, by the Rent Administrator, concerning the housing
accommodations known as 51-25 Van Kleeck, Queens, New York,
Apartment No. 3-K, wherein the Rent Administrator determined that
the owner had overcharged the tenant.
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 issue herein is whether the Rent Administrator's order was
warranted.
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 on March 26, 1984 by the
filing of a rent overcharge complaint by the tenant. The tenant
had commenced occupancy of the apartment as subtenant in December,
1982. The tenant then became the lease tenant in April, 1983, for
a seven-month lease term, and renewed his lease until vacating the
apartment in September, 1988. In answer to the complaint, the
owner submitted a complete rental history for the subject
apartment.
DH 110052-RO
In the order under appeal herein, the Rent Administrator determined
that the tenant had been overcharged in the amount of $8,408.00,
including treble damages, and directed the owner to refund such
overcharge to the tenant.
In its petition, the owner contends, inter alia, that the
imposition of treble damages was unjust because it only bought the
building in March, 1984 with the assurances of the previous owner
that all rents at that time were correct. With respect to the
actual rent calculations the owner contends that the prior tenant's
lease commencing on November 1, 1980 under Guidelines 12 should be
granted a vacancy allowance of 10%, instead of the 5% given by the
Administrator. The owner further asserts that the complaining
tenant did not assume occupancy by assignment of the prior tenant's
lease as stated by the Administrator, but was in fact there
illegally, and that it was improper for the Administrator to reduce
the rent for the complaint's vacancy lease commencing April 1,
1983.
In his response, the tenant states that the Administrator's order
should be adjusted to reflect that he vacated the subject premises
on September 21, 1988, instead of June 30, 1989.
The Commissioner is of the opinion that the owner's petition should
be granted in part and that the Administrator's order should be
modified.
The Commissioner finds that the owner is incorrect in its claim
that the lease of the prior tenant commencing November 1, 1980
include a 10% vacancy allowance, instead of 5%. Under Guidelines
12, a 10% vacancy allowance is only available when there has been
no vacancy since 1975. However, in the present case, there was a
vacancy in 1978 with the departure of the rent controlled tenant.
Therefore the 5% vacancy allowance was proper.
The Commissioner further finds that it was proper for the
Administrator to reduce the lawful rent for the complainant's
vacancy lease of April 1, 1983. Both the prior tenant's lease and
the complainant's vacancy lease were executed under Guidelines 14,
and thus the Administrator properly used the rent in effect on
September 30, 1982, or $372.62, as the base rent. However, the
prior tenant's lease was for two years, for a 7% increase, while
the complainant took a one year lease, for only a 4% increase;
accordingly, the lawful rent was actually decreased in this case.
However, an examination of the record reveals that overcharges were
not a result of willfulness on the owner's part. The most
substantial part of overcharges occurred in the complainant's
vacancy lease commencing April 1, 1983 in which overcharges were
increased to $35.34 per month from $7.30 per month. This increase
was the result of the former owner's taking of a second guidelines
DH 110052-RO
increase during the same guidelines period, or "piggybacking." It
is the policy of the DHCR, as enunciated in Policy Statement 89-2,
that "piggybacking" is one of the specified practices for which
there will be no presumption of willfulness for resulting
overcharges.
As a result of the removal of the treble damages penalty, a
recalculation of the rent history results in a reduction of
overcharges to $3,118.50, from $8,408.00, including interest on
overcharges since April 1, 1984. As per the tenant's request the
amount of overcharges is adjusted to reflect the tenant's vacating
of the apartment on September 21, 1988.
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.
THEREFORE, pursuant to the Rent Stabilization Law and Code, it is
ORDERED, that this 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.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
|