DC410336RO
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. DC410336RO
Gershon & Co., Inc., : DRO DOCKET NO. 3123102RT
CDR34732
TENANTS: Michael & Mary
Donovan
PETITIONER :
------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
AND MODIFYING ADMINISTRATOR'S ORDER
On March 30, 1989 the above named petitioner-owner filed a Petition
for Administrative Review against an order issued on February 23,
1989 by Rent Administrator, 10 Columbus Circle, New York, New York
concerning housing accommodations known as Apartment 35 at 461 Fort
Washington Avenue, New York, New York wherein the Rent
Administrator determined that the owner had overcharge the tenants.
The Commissioner notes that this proceeding was filed 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
provision in effect in 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 in this appeal is whether the Rent Administrator's order
was warranted.
This proceeding was originally commenced by filing in March, 1984
of both a rent overcharge complaint and a fair market rent appeal
by the tenants, in which they stated that they had commenced
occupancy on September 25, 1983 at a rent of $450.00 per month.
The owner was sent copies of both documents, which were processed
in the same proceeding. The owner submitted a full rental history
from the base date.
In an order issued on February 23, 1989 the Administrator dismissed
the fair market rent adjustment application, since the rent of the
initial stabilized tenant had been determined in a prior proceeding
to be lawful, and found an overcharge of $3,576.17 as of September
DC410336RO
30, 1988.
In this petition, the owner contends in substance that the
Administrator listed a 5%, rather than 15%, vacancy allowance in
Guideline Period 12A; that, while the order does not give a basis
for stating that "if the rent charged is less than the rent with
maximum permitted increases, the lawful stabilization rent is
limited to the rent charged," utilization of the correct increase
would not raise the maximum lawful rent above the actual rent
charged; that the tenants' original complaint was limited to a
claim that "[t]he landlord is charging rent for a period of time
when the apartment was still being worked on" in September, 1983;
that it would be an abuse of discretion to process the tenants'
specific complaint as if it were a complaint of general rent
overcharge; that the tenants' fair market rent appeal was properly
dismissed; that the specific issue on which the tenants requested
a determination was not addressed or determined in the order; and
that new evidence must be presented on the issue complained of.
In answer, the tenants assert in substance that their complaint was
also about the amount of rent being charged; that they also filed
an objection to the initial registration; and that they should not
have to pay an increase for new appliances, which they either never
received or which have been defective recently. With their answer
they have enclosed a copy of a Tenant's Objection to Rent/Services
Registration, dated July 30, 1984, in which they state that they
received the initial registration in June, and that they were
making a fair market rent appeal. [This was later docketed as No.
000015570. On March 28, 1986 the parties were notified that it
would also be processed as Docket No. U3123102R/T.]
In response, the owner contends in substance that any claims
regarding the installation of new equipment must be disregarded
since the tenants did not file a Petition for Administrative
Review.
The Commissioner is of the opinion that the owner's petition should
be denied.
Whether or not the tenants' overcharge complaint was one of general
or specific overcharge, the fair market rent appeal filed at the
same time and processed under the same docket number constituted a
challenge to the lawfulness of the rent. While it turned out that
the complainants were not the first stabilized tenants, it was
proper for the Administrator to continue processing the appeal as
an overcharge complaint. The owner was afforded a full opportunity
to prove the lawfulness of the rents charged, and in fact submitted
a full rental history from the base date.
The 5% vacancy allowance listed on the Administrator's chart was
just a typographical error that did not affect the calculations.
If the Administrator had actually used that figure, the lawful rent
DC410336RO
in the prior tenant's 1981 lease would have been $278.40. Actual
use of the 15% figure meant that the owner could have charged up to
$302.40. The owner actually charged $295.00. It has been a
longstanding policy of the rent agency that an owner is deemed to
have waived the difference between the rent charged and a higher
possible lawful rent, even if the lower rent was charged by
mistake. An owner cannot recoup a previously waived rent increase.
Collingwood Enterprises v. Gribetz, N.Y.L.J., April 24, 1975, p.
17, col.6, (Sup. Ct., N.Y. Co., Fine, J). The Administrator was
therefore correct in determining a lawful rent of $295.00 from
August 15, 1981 to August 31, 1982.
Since the Administrator did not look into the question of rent
paid, or credited, for the last half of September, 1983, the owner
was requested on March 18, 1994 to submit evidence that the tenants
received one-half month credit. In reply, the owner stated that it
could not find rental audits/history from 1983, so an additional
one-half month at present rent was being credited. It enclosed a
copy of a computer printout showing a credit of $316.71 in March,
1994. What the owner has effectively done is to accept that the
tenants paid rent for September 15 to 30, 1983, and that they
should not have had to pay anything for that period. The
Administrator's order calculated the tenants as paying $225.00 for
that period, with $24.34 of that being an overcharge. If the
$316.71 recently credited is applied against that $225.00, it means
that the tenants effectively started paying rent on October 1,
1983, rather than September 15, 1983, so $24.34 worth of overcharge
for the half-month is eliminated. Since the owner has credited
$316.71 rather than $225.00, the remaining over-charge is reduced
by an additional $91.71, becoming $3,460.12 (including excess
security of $57.84) as of September 30, 1988 rather than $3,576.17
as calculated by the Administrator.
The owner is directed to reflect the findings and determinations
made in this order on all future registration statements, including
those for the current year if not already filed, citing this Order
as the basis for the change. Registration statements already on
file, however, should not be amended to reflect the findings and
determinations made in this order. The owner is further directed
to adjust subsequent rents to an amount no greater than that
determined by this order plus any lawful increases.
The Commissioner has determined in this Order and Opinion that the
owner collected overcharges of $3,460.12. This Order may, upon
expiration of the period for seeking review of this Order and
Opinion pursuant to Article Seventy-eight of the Civil Practice Law
and Rules, be filed and enforced as a judgment or not in excess of
twenty percent per month of the overcharge may be offset against
any rent thereafter due the owner. Where the tenant credits the
overcharge, the tenant may add to to the overcharge, or where the
tenant files this Order as a judgment, the County Clerk may add to
DC410336RO
the overcharge, interest at the rate payable on a judgment pursuant
to Section 5004 of the Civil Practice Law and Rules from the
issuance date of the Rent Administrator's Order to the issuance
date of the Commissioner's Order.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it
ORDERED, that this petition be, and the same hereby is, denied and
that the Rent Administrator's order be, and the same hereby is,
modified in accordance with this Order and Opinion. The lawful
stabilization rent is $476.81 per month in the lease commencing
October 1, 1986. The total remaining overcharge is $3,460.12 for
the period through September 30, 1988.
ISSUED:
-------------------------------------
JOSEPH A. D'AGOSTA
Deputy Commissioner
|
