DL 410002-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. NO. 5250 Court Remit
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW
          APPEAL OF                               DOCKET NO.:   
                                                  DL 410002-RO
                 CHERYL                       KEATING                       for
                  GRENTOR REALTY, INC.,           RENT ADMINISTRATOR'S
                                                  DOCKET NO.:
                                  PETITIONER      36912        
          ----------------------------------x


               ORDER AND OPINION MODIFYING COMMISSIONER'S PRIOR ORDER
                            AND OPINION AFTER COURT REMIT


          The proceeding was originally commenced on November 16, 1984,  by
          the filing of an objection to the April 1, 1984 rent for  housing
          accommodations known as Apartment 4 at 607 East 11th Street,  New
          York, New York by the tenant, who took occupancy  pursuant  to  a
          one year lease which commenced March 1, 1984, at a  monthly  rent
          of $350.00.

          In the objection, the tenant stated that she had not  received  a
          copy of the Registration.  The tenant stated that the  owner  was
          in jail, and that his partner was deceased, leaving it unclear to 
          whom the tenants should pay rent.

          In its answer, the owner stated that it had assumed  this  matter
          was settled when the monthly rent was  reduced  from  $425.00  to
          $416.00 effective August 1, 1988.  Although requested, the  owner
          failed to submit prior leases from April 1, 1980 or evidence that 
          the apartment/building had been registered.

          Accordingly, pursuant to  the  default  procedure,  in  an  order
          issued November 2, 1989, the Administrator establish d  the  sta-
          bilized rent at $321.00 (the tenant's  initial  rent  of  $350.00
          minus the Guideline 15 allowance for a one year  vacancy  lease).
          Because the apartment was not registered, no subsequent increases 
          were permitted, and the owner was directed to  refund  $16,529.68
          in overcharges through November 30, 1989, including  treble  dam-
          ages from April 1, 1984.

          On December 11, 1989, the owner filed a Petition for  Administra-
          tive Review against the November 2, 1989 order.

          With the Petition, the owner  submitted  the  lease  of  a  prior
          tenant which commenced February 1, 1980 and expired  January  31,
          1981, at a monthly rental of $300.00.  The owner stated that this 
          lease would establish the legal rent in 1984.  The owner  alleged
          that the lease was not submitted previously because the lease was 
          in the possession of the wife of  one  of  the  principal  share-
          holders of the corporate owner, who  was  incarcerated,  and  the







          DL 410002-RO
          lease was just made available.  Finally, the  owner  stated  that
          the building was now registered.

          The tenant did not interpose an answer to the Petition.

          On January 11, 1990, the Commissioner dismissed the  Petition  as
          untimely, and the owner filed a petition  n  Supreme  Court  pur-
          suant to Article 78 of the Civil Practice L w  and  Rules,  chal-
          lenging the Administrator's order.  The proceeding  was  remitted
          to DHCR for further consideration.  The owner  produced  evidence
          that the Petition was in fact mailed on  December  5,  1989,  and
          based thereon, the Division consented to a  remand  of  the  pro-
          ceeding.

          By order issued July 10, 1990, the  Commissioner  recomputed  the
          stabilized rent from the April 1,  1980  rent  reflected  in  the
          lease submitted by the owner.  The total  overcharge  was  calcu-
          lated to be $15,050.88 through November 30,  1989,  inclusive  of
          excess security and treble damages on overcharges collected on or 
          after April 1, 1984.

          The petitioner subsequently  filed  an  Article  78  petition  in
          Supreme Court, against the July 10,  1990  order.   The  petition
          alleged that the petitioner was the Administratrix of one of  the
          principal shareholders of the corporate owner, and  the  receiver
          of the subject premises.  She provided a copy of the  Letters  of
          Administration, issued to her on December 10,  1982.   The  peti-
          tioner alleged that the subject building had been  managed  by  a
          second principal shareholder,  who  had  been  incarcerated,  and
          whose wife had assumed management of  the  building.   Since  the
          wife had mismanaged the building, in 1989 the  petitioner  herein
          was appointed receiver by the Court.

          The petitioner further contended that she had  assumed  that  the
          overcharge complaint had been settled; that she was unaware  that
          additional leases were necessary to resolve the issues; that  she
          now had a renewal lease that would establish that  the  corporate
          owner had always charged the legal rent; and that treble  damages
          were not warranted.


          In support of these contentions, the petitioner submitted a lease 
          extension for the period February 1,  1981  through  January  31,
          1984, alleging it was first made available by the hostile wife of 
          the other principal shareholder on August 20, 1990.

          On March 13, 1991, an  order  was  signed  by  Justice  David  H.
          Edwards, Jr., remanding the proceeding  to  the  DHCR  solely  to
          reconsider the PAR based upon the  newly-submitted  lease  exten-
          sion agreement, and the petitioner's claim  that  treble  damages
          are not warranted under the circumstances.

          The Commissioner is of the opinion that the Commissioner's  prior
          order should be modified.

          Normally, appellate review is limited to facts or  evidence  pre-
          sented before the Administrator.  The Commissioner will accept
          new evidence for the first time on appeal as an exception,  where







          DL 410002-RO
          the owner presents a well-documented, reasonable explanation  for
          its failure to submit such evidence below.  In the instant  case,
          the lease extension for  the  period  February  1,  1981  through
          January 31, 1984 is alleged to have been first made available  to
          the owner on August 20, 1990 by a hostile  party.   That  allega-
          tion, based on the record, is found to be credible.  Accordingly, 
          that lease extension is accepted for the first  time  on  appeal.
          The Commissioner, therefore, has recomputed the  stabilized  rent
          to reflect the increase for the lease  period  February  1,  1981
          through  January  31,   1984,   and   reduced   the   overcharges
          accordingly.  The calculations are reflected in the attached rent 
          chart, hereby made a part of this order.

          Section 2528.4 of  the  Rent  Stabilization  Code  provides  that
          failure to comply with the initial or  annual  rent  registration
          requirements of the Code shall bar an owner from  collecting  any
          rent in excess of the legal regulated rent in effect on the  date
          the apartment became subject to the  rent  registration  require-
          ments of the Code until such registration is completed.

          The owner has proffered neither explanation nor proof  evidencing
          an absence of willfulness in its failure to register the premises 
          until December 12, 1989.  The necessity  f  care,  the  responsi-
          bility to prevent waste of assets, did not suddenly fall  on  the
          petitioner in September 1989, when she was appointed receiver  of
          the premises; it was an intrinsic  part  of  the  obligation  she
          undertook when, in December, 1982, she became  Administratrix  of
          the decedent shareholder's estate; and  seeing  that  appropriate
          governmental filings, including the filing of the initial 



          Building/Apartment Registration in  1984  and  subsequent  annual
          filings were made as required, was  equally  her  responsibility.
          Accordingly, the finding  of  willfulness,  and  the  penalty  of
          treble damages, must stand for the failure to register the  prem-
          ises until December 1989.

          The total overcharge, inclusive of treble damages for overcharges 
          collected on or after April 1, 1984, is $10,312.68.

          The Commissioner notes that based  on  the  Guidelines  increases
          alone, an overcharge exists, even considering all leases  through
          January 1984; however, the assessment of treble damages  resulted
          from the owner's failure to timely register.

          This order may be filed and enforced by the tenant  in  the  same
          manner as a judgment, or not in excess of twenty percent  thereof
          per month may be offset  against  any  rent  thereafter  due  the
          owner.


          THEREFORE, in accordance with  the  Rent  Stabilization  Law  and
          Code, it is         

          ORDERED, that Commissioner's prior order and opinion be, and  the
          same, hereby is, modified  in  accordance  with  this  order  and
          opinion.







          DL 410002-RO


          ISSUED:


                                                                           
                                                ELLIOT SANDER
                                                Deputy Commissioner
    

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