STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      ------------------------------------X  SJR 7171 (Mandamus)
      APPEAL OF                              DOCKET NO. DF610045RO

           Ira Sumkin,                    :  DISTRICT RENT OFFICE
                                             DOCKET NO. AI610485R
                                             TENANT: Carole Brennan           
                            PETITIONER    : 

                                     IN PART

      On June 1, 1989 the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on April 27, 1989 by the 
      Rent Administrator, 92-31 Union Hall Street, Jamaica, New York 
      concerning the housing accommodations known as 3053 Hull Avenue, Bronx,  
      New York, Apartment No. 1N wherein the Rent Administrator determined 
      that the owner had overcharged the tenant.

      Subsequent thereto, the petitioner-owner filed a Petition in the Supreme 
      Court pursuant to Article 78 of the Civil Practice Law and Rules 
      requesting that the DHCR be mandated to make an expeditious 
      determination of the administrative appeal.  The proceeding was remitted  
      to the Division of Housing and Community Renewal (DHCR), and the owner's 
      petition is herein decided on the merits.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Section 2526.1 of the Rent Stabilization Code.

      The issue herein is whether the Rent Administrator's order was 

      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 by the filing in September, 
      1985 of a rent overcharge complaint by the tenant, who stated in 
      substance that she had commenced occupancy on December 1, 1985 at a rent 
      of $529.63 per month.

      In a November 26, 1986 answer to the complaint, the owner stated among 


      other things that the prior tenant had moved in on July 1, 1985 as 
      superintendent at a rent of $466.11, including a $13.00 increase for 
      kitchen and bathroom improvements, that he died later that month; and 
      that the complainant's one-year lease included a 6 1/2% Guidelines 
      increase and 7 1/2% vacancy allowance over the prior tenant's rent.

      On January 13, 1989 the owner was requested among other things to submit 
      leases, registrations, and copies of cancelled checks and bills to 
      substantiate the cost of improvements.  The notice also informed the 
      owner that treble damages would be imposed on any overcharges found to 
      be willful.  The only reply received was from a former owner, Jack Minc, 
      who stated that the owner had sent him the request, and who requested an 
      extension of time so he could obtain affidavits from the Rent 
      Stabilization Association.  Such request was granted, and on March 6, 
      1989 Jack Minc submitted affidavits  regarding registrations.  The owner 
      did not submit any evidence regarding improvements.

      On March 20, 1989 the owner was again requested to submit, among other 
      things, copies of cancelled checks and bills regarding improvements.  
      With this request was enclosed another form, differing from the January 
      13, 1989 form only in dates, again notifying the owner of the possible 
      imposition of treble damages.  No reply was received from the owner.

      The file also contains a Final Notice devoted entirely to the proposed 
      imposition of treble damages on a specific dollar amount of overcharge.  
      While the notice does not have a date or the Administrator's signature, 
      it seems likely that such notice was actually mailed on March 20, 1989 
      (since the tenant enclosed her copy in a March 22, 1989 submission, 
      along with other documents mailed to her on March 20, 1989, and since 
      she later enclosed a copy in answer to the owner's petition); however, 
      it was addressed to "Ira Sumkin/Jack Minc" at Jack Minc's mailing 

      In an order issued on April 27, 1989 the Administrator determined an 
      overcharge, including treble damages, of $14,746.32 as of May 31, 1989.
      In this petition, the owner contends in substance that Jack Minc was 
      never the managing agent for the current owner Ira Sumkin, and did not 
      claim to be appearing for the owner for purposes of submitting any 
      information other than the registration information requested in the 
      January 13, 1989 notice; that on March 20, 1989 the owner was for the 
      first time requested to submit evidence verifying the cost of equipment 
      and improvements; that no Final Notice regarding treble damages was ever 
      furnished to the owner at his place of business; that in fact the copy 
      of the Final Notice contained in the DHCR's files does not even have a 
      signature or a date; that treble damages may therefore not be imposed; 
      that the subject building, having been conveyed to Robert Georgens on 
      October 31, 1985, was conveyed to the current owner on April 4, 1986; 

      that upon receipt of the tenant's complaint the owner embarked upon a 
      responsible course of action to obtain from two prior owners rental data 
      which were not transferred to him at the time he purchased the premises; 


      that he had a good faith belief, based upon validly executed leases as 
      well as an unchallenged 1985 registration statement noting that the rent 
      had been increased by $15.00 for the installation of a refrigerator and 
      new stove in January, 1985, that the rent charged prior to the 
      complainant's occupancy was lawful; that he had no reason, until 
      receiving the 1989 requests for additional information, to obtain rental 
      data substantiating the lawfulness of the individual apartment 
      improvements; that he, upon receiving the 1989 requests, communicated 
      with the prior owners and began an investigation of the prior owners' 
      records; that, since the 1989 DHCR notices for the first time requested 
      rental data other than leases, and since the Administrator's order was 
      issued several weeks later, it cannot be said that the owner willfully 
      failed to comply with the DHCR's request to produce data which was not 
      in his possession or control at that time; that as a result of his good 
      faith efforts to obtain complete rental data prior and subsequent to the 
      issuance of the Administrator's order, the owner has been successful in 
      obtaining missing rental data from one of the prior owners; that a 
      January 17, 1985 invoice shows that a gas range and new refrigerator 
      were installed at a cost of $540.00, although the prior owner should not 
      have included the $355.00 cost of the range since it was used equipment; 
      that the prior owner also incorrectly compounded a Guidelines increase 
      for the tenancy of the superintendent Hector Narvez [from July 1, 1985 
      until his death 11 days later, a tenancy not mentioned in the 
      Administrator's rent calculation chart]; that extensive renovations were 
      done in the subject apartment at a cost of $4,645.00 beginning in 
      August, 1985, including the installation of a window in a windowless 
      kitchen, of bedroom doors, of a new floor, of sheetrocked walls, of new 
      cabinets, sink and fixtures in the kitchen, and of new tiles in the 
      bathroom; and that the Administrator's order incorrectly allows a 6% 
      rather than 9% increase for the lease commencing December 1, 1988.  With 
      his petition the owner has enclosed invoices not previously submitted.

      In answer, the tenant asserts in substance that her security is not in 
      an interest-bearing account; that the apartment registrations list C.K. 
      Minc as managing agent from April 1, 1985 to January 1, 1987; that the 
      1987 registration shows the owner as the managing agent from December 1, 
      1986 to November 30, 1988; that the DHCR's Final Notice shows that the 
      owner's address is in care of Jack Minc in Garden City; that on August 
      11, 1986 and January 5, 1987 she sent letters to the owner regarding 
      various defects; and that the owner's credibility is questionable, since 
      a document that he submitted to the DHCR in 1989 in a service decrease 
      case had a paragraph which he added after she had signed the document.  
      With her answer the tenant has enclosed two versions of a document which 
      she signed on May 30, 1989 in Docket No. CB610217S, consenting to a 
      restoration of the rent, but on which she wrote that she had never 
      received any refund or reduction in her rent.   

      On one of the versions (apparently a copy of one from the DHCR's files, 
      since a label with a new docket number of BF610058OR had been added), a 
      paragraph had been added stating that all conditions in the 
      Administrator's order had been corrected, that fuses had been replaced 
      with circuit breakers, and that the apartment had been painted.  This 


      area of the document is blank on the version, with the old docket 
      number, which the tenant apparently photocopied before sending to the 
      owner to submit to the DHCR.  She also enclosed an invoice for a 
      refrigerator or freezer which she bought on February 17, 1986, less than 
      three months after moving into the subject apartment (which had 
      supposedly had a new refrigerator installed one year previous).  In 
      later submissions she asserts in substance that there was no working 
      refrigerator when she moved in; that no new cabinets were installed; 
      that the kitchen has old fixtures; that new tiles were installed in the 
      bathroom in 1989; and that she has recently been informed that the 
      renovation bill may have been for Apartment 1N at 3055 Hull Avenue 
      rather than at 3053 Hull Avenue, both buildings having previously been 
      owned by Mr. Minc.

      The Commissioner is of the opinion that this petition should be granted 
      in part.

      While it cannot necessarily be assumed that the owner eventually 
      received the treble damages notice that was addressed (and probably sent 
      on March 20, 1989) to Jack Minc, since the file and DHCR records provide 
      no real evidence that Jack Minc had any formal connection to the owner 
      in 1989, the owner was sent two other notices on January 13 and March 
      20, 1989 informing him of the possible imposition of treble damages, so 
      the fact that one Final Notice was addressed to Jack Minc does not 
      constitute adequate reason to remove treble damages.

      Upon being sent a copy of the tenant's complaint in 1986, the owner 
      claimed an increase based on $520.00 in claimed improvements in 1985, 
      but did not submit any evidence of them.  He also enclosed a 1985 
      registration containing what he later characterized as an unchallenged 
      listing of a $15.00 increase for a refrigerator and [used] stove.  
      (However, that tenant was in occupancy through June 30, 1985 at the 
      latest, and would have received the 1985 registration either after or 
      close to the time he vacated.  He would have had little incentive to 
      challenge the increase, which was in effect for no more than four 
      months, so the lack of a challenge would give little reason in itself to 
      assume that the claimed increase was legitimate.)  Aside from the 
      owner's own recognition in 1986 that increases based on improvements and 
      new equipment were at issue, the owner was sent notices on January 13, 
      1989 and March 20, 1989 requesting proof of the cost of improvements and 
      new equipment.  The owner did not submit any such evidence in the 
      proceeding before the Administrator, although he finally submitted 
      documents with his June 1, 1989 appeal, five weeks after the issuance of 
      the Administrator's order, and four and one-half months after they were 

      specifically requested by the Administrator.  It is well settled that an 
      Administrative Appeal is not a de novo proceeding but is limited, absent 
      good cause being shown, to the issues and evidence which were before the 
      Administrator.  The Commissioner does not consider that the owner has 
      presented adequate reasons to justify acceptance of the documents 
      submitted for the first time on appeal. An owner is required to charge 
      only lawful rents, and to be able to prove their lawfulness, a proof 


      that is not accomplished simply by assuming that rents "inherited" from 
      a previous owner are lawful.  

      While the owner claims that the prior owner incorrectly compounded a 
      Guidelines increase for the tenancy of the former superintendent, his 
      12-day occupancy is not considered a genuine tenancy, and no increase of 
      any kind is allowed for it.  The former owner also appears to have 
      charged the complainant a 6 1/2% Guideline increase and 7 1/2% vacancy 
      allowance over the superintendent's rent.  In actuality, a 4% Guidelines 
      increase applies to her one year lease.  By the terms of Guideline 17 
      there is no vacancy allowance since one was taken in Guideline Period 16 
      for the Sanchez lease, and the increase is calculated on the $407.75 
      rent in the Sanchez lease commencing February 28, 1985 since the 12-day 
      occupancy of the superintendent in July, 1985 is ignored.  However, the 
      owner is correct that the tenant had a two-year lease commencing 
      December 1, 1988.  Taking the aforementioned factors into account, the 
      Commissioner has recalculated the lawful stabilization rents and the 
      amount of overcharge.  They are set forth on an amended rent calculation 
      chart attached hereto and made a part hereof.  The Commissioner notes 
      that, while those rents are the lawful permanent rents, the actual rents 
      collectible for some periods may be lower if there are of one or more 
      rent reduction orders resulting from service decreases.

      With respect to interest on her security deposit, the tenant may wish to 
      contact the New York State Department of Law ("Attorney General's 

      The Commissioner has determined in this Order and Opinion that the owner 
      collected overcharges of $14,092.44.  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 the 
      overcharge, or where the tenant files this Order as a judgment, the 
      County Clerk may add to 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.

      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 lawfful 


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

      ORDERED, that this petition be, and the same hereby is, granted in part 
      and that the Rent Administrator's order be, and the same hereby is, 
      modified in accordance with this order and opinion.  The lawful 
      stabilization rents and the amount of the rent overcharge are 
      established on the attached chart, which is fully made a part of this 
      order.  The total overcharge is $14,092.44 as of April 30, 1989, 
      including excess security of $125.43.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner

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