Docket No. EB110349RO
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. 7023
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEALS OF DOCKET NOS. EB110349RO and
FG120179RO
133-24 SANFORD AVENUE DISTRICT RENT
REALTY CORPORATION, ADMINISTRATOR'S DOCKET
NOS. CB110389R and
FB120039RK
PETITIONER
------------------------------------X
ORDER AND OPINION TERMINATING PROCEEDING FILED UNDER DOCKET NO.
EB110349RO, AND GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART
FILED UNDER DOCKET NO. FG120179RO
On February 1, 1990, the above-named landlord filed a petition
for administrative review, under Docket No. EB110349RO, of an order
issued on December 28, 1989 by the Rent Administrator concerning
the housing accommodation known as Apartment 6K, 133-24 Sanford
Avenue, Flushing, New York. Furthermore, on July 10, 1991, the
above-named landlord filed a petition for administrative review,
under Docket No. FG120179RO, of an order issued on June 21, 1991 by
the Rent Administrator concerning the above-mentioned housing
accommodation.
Subsequently, and after more than ninety days had elapsed from
the time it filed its petition for administrative review, under
Docket No. EB110349RO, the landlord deemed the above-mentioned
petition as having been denied, and sought judicial review in the
Supreme Court of the State of New York pursuant to Article 78 of
the Civil Practice Law and Rules.
After considering the Article 78 petition, the Court issued an
order remitting the petition, filed under Docket No. EB110349RO, to
the Division of Housing and Community Renewal (D.H.C.R.) for
further consideration.
Docket No. EB110349RO
Since the petitions involve common questions of law and fact,
the Commissioner deems it appropriate to consolidate the
proceedings for disposition herein.
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 administrative appeals.
This proceeding was commenced by the subject tenant filing an
overcharge complaint, dated December 18, 1987, filed under Docket
No. CB110389R.
The subject tenant filed another overcharge complaint, dated
November 27, 1988, filed under Docket No. CK120487R.
In the Administrator's order under review herein, under Docket
No. CB110389R, the Administrator determined that the subject
apartment's maximum rent was $329.47 per month effective February
26, 1982 through the issuance date of the above-mentioned order.
In its petition filed under Docket No. EB110349RO, the subject
landlord asserts, among other things, that the above-mentioned
Administrator's order, in establishing the maximum rent, did not
take into account the fact that the United States Department of
Housing and Urban Development (H.U.D.) had issued a pre-emption
order, dated September 27, 1985, which asserted exclusive
jurisdiction over the establishment of the subject building's legal
regulated rents and maximum rents; that D.H.C.R.'s jurisdiction
over the regulation of the subject building's rents was pre-empted
by the above-mentioned order issued by H.U.D.; that on November 8,
1985 H.U.D. approved increasing the subject apartment's maximum
rent to $458.21 per month; that, as the landlord states: "The
increased rents were required to meet the increased costs of
utilities and operating expenses at the subject building"; that
subsequent rent increases "must be based on the initial legal rent
established in 1985 by the HUD order"; and that, as the landlord
further states, "the agency in the instant proceeding must adhere
to the HUD exemption."
Subsequently, on August 8, 1990, the Administrator issued an
order, under Docket No. CK120487R, in which it had been determined
that the subject apartment's maximum rent should be $458.21 per
month effective November 1, 1985 through the issuance date of the
above-mentioned order. In the above-mentioned order the
Administrator noted that H.U.D. established the subject apartment's
maximum rent to meet the cost of operating the subject building.
On March 12, 1991, the Administrator reopened the
Administrator's order that was issued under Docket No. CK120487R
based upon an irregularity in a vital matter.
In the Administrator's order under review herein, issued under
Docket No. EB110349RO
Docket No. FB120039RK, the Administrator modified the order issued
under Docket No. CK120487R as follows: the subject apartment's
maximum rent effective January 1, 1988 should be $492.88 per month;
the subject apartment's maximum rent effective January 1, 1989
should be $512.73 per month, and the subject apartment's maximum
rent effective January 1, 1990 should be $551.18 per month.
After careful consideration, the Commissioner is of the opinion
that the landlord's petition, filed under Docket No. EB110349RO,
should be terminated.
As the relief sought by the landlord in its petition filed
under Docket No. EB110349RO, which is the establishment of the
maximum rent based upon the aforementioned pre-emption order issued
by H.U.D., has already been provided by the subsequent orders of
the Administrator, the Commissioner is of the opinion that the
landlord's petition filed under Docket No. EB110349RO should be
terminated as moot.
In its petition filed under Docket No. FG120179RO, the subject
landlord asserts, among other things, that the pre-emption order
issued by H.U.D. became effective November 1, 1985; that the
subject apartment's maximum rent which was approved by H.U.D. was
$458.21 per month effective November 1, 1985; that the pre-emption
order issued by H.U.D. was in effect for one year; that an Order of
Eligibility was issued on February 1, 1989 granting the landlord's
maximum base rent (M.B.R.) for the 1988-1989 period effective
January 1, 1988; that the above-mentioned order established the
1988-1989 M.B.R. by increasing the 1986-1987 M.B.R. by 16.4%; that,
as the landlord asserts, the subject apartment's 1988-1989 M.B.R.
should have been $533.36 per month (1986-1987 M.B.R. of $458.21 per
month X 16.4%); that the subject apartment's maximum rent effective
January 1, 1988 should have been $492.88 per month (subject
apartment's maximum rent on December 31, 1987 which was $458.21 X
7.5%); that the subject apartment's maximum rent effective January
1, 1989 should have been $529.98 per month, and not $512.73 per
month as listed in the Administrator's order under review herein;
that an Order of Eligibility was issued on August 15, 1990 granting
the landlord's M.B.R. for the 1990-1991 period effective January 1,
1990; that the above-mentioned order established the 1990-1991
M.B.R. by increasing the 1988-1989 M.B.R. by 8%; that the subject
apartment's 1990-1991 M.B.R. should have been $576.03 per month,
and that the subject apartment's maximum rent effective January 1,
1990 should have been increased to $566.73 per month, and not
$551.18 per month as listed in the Administrator's order under
review herein.
To its petition the landlord attaches, among other things, a
copy of the aforementioned Order of Eligibility issued on February
1, 1989, under Docket No. BL126471BR, granting the landlord's
M.B.R. for the 1988-1989 period effective January 1, 1988, and a
copy of the aforementioned Order of Eligibility issued on August
15, 1990, under Docket No. DL120783BR, granting the landlord's
Docket No. EB110349RO
M.B.R. for the 1990-1991 period effective January 1, 1990.
In his answer the subject tenant asserts, among other things,
that the subject landlord provided H.U.D. with a rental amount that
was more than the legal maximum rent for the subject apartment, and
that H.U.D does not verify whether the maximum rent submitted by
the landlord was accurate.
To his answer the subject tenant attaches, among other things,
a copy of a letter from H.U.D., dated August 2, 1988, which states,
among other things, that:
Local HUD policy (New York, NY office) limits annual rent
increases to individual tenants of properties for which
HUD has pre-empted state rent regulations to 20%. The
owner of this property reported to this office at the
time HUD pre-empted such regulations for this property
that your apartment would receive an increase (20%)
within these limits. However, there appears to be a
dispute concerning the base amount which was raised by
the 20%. That base amount should have been the New York
State Division of Housing and Community Renewal
(NYSDHCR)-designated maximum permissible rent for your
apartment at the time that the HUD pre-emption action
went into effect. NYSDHCR is responsible for enforcing
this rent which it has designated, and you should contact
them in this regard.
After careful consideration, the Commissioner is of the opinion
that the landlord's petition filed under Docket No. FG120179RO
should be granted in part.
The Commissioner notes that on June 14, 1991 the Administrator
amended the order issued under Docket No. BL126471BR, which
modified the calculation of the subject building's 1988-1989 M.B.R.
Based on the above-mentioned amended order, the Commissioner finds
that the 1988-1989 M.B.R. for subject apartment should be $526.73
per month effective January 1, 1988.
The record reflects that the landlord did not file a challenge
of the above-mentioned amended order issued on June 14, 1991.
Accordingly, the Commissioner finds that the amended order issued
on June 14, 1991, under Docket No. BL126471BR, is a final
determination of the rent agency.
Based upon the pre-emption order issued by H.U.D., the
Commissioner finds that the subject apartment's maximum rent in
effect on December 31, 1987 was $458.21 per month. Pursuant to the
Administrator's order granting the landlord's M.B.R. for the 1988-
1989 period, the Commissioner notes that the subject apartment's
maximum rent effective January 1, 1988 is to be calculated by
increasing the maximum rent in effect on December 31, 1987
($458.21) by 7.5%. Accordingly, the Commissioner finds that
Docket No. EB110349RO
subject apartment's maximum rent effective on January 1, 1988
should be $492.58 per month.
The Commissioner points out that the Administrator's order
under review herein, under Docket No. FB120039RK, mistakenly listed
the subject apartment's maximum rent effective January 1, 1988 as
$492.88 per month. The Commissioner finds that the above-mentioned
Administrator's order should be modified to reflect the fact that
the subject apartment's maximum rent effective January 1, 1988
should be $492.58 per month.
Pursuant to the aforementioned Order of Eligibility, the
Commissioner finds that the subject apartment's maximum rent
effective January 1, 1989 is to be calculated by increasing the
1988 maximum rent ($492.58) by 7.5%, which equals $529.52.
However, as the apartment's maximum rent in effect on December 31,
1987 did not exceed the apartment's 1988-1989 M.B.R., the
Commissioner finds, pursuant to the aforementioned Order of
Eligibility, that the subject apartment's maximum rent in effect
during the 1988-1989 period may not exceed the apartment's 1988-
1989 M.B.R.
As the subject apartment's 1988-1989 M.B.R. is $526.73 per
month; that the subject apartment's maximum rent effective on
January 1, 1989 can not exceed the above-mentioned M.B.R., the
Commissioner finds that the subject apartment's maximum rent
effective January 1, 1989 should be $526.73 per month.
Pursuant to the Administrator's order granting the landlord's
M.B.R. for the 1990-1991 period, issued under Docket No.
DL120783BR, the Commissioner notes that the subject apartment's
M.B.R. for the 1990-1991 period is to be calculated by increasing
the apartment's 1988-1989 M.B.R. ($526.73) by 8%.
Accordingly, the Commissioner finds that the subject
apartment's M.B.R. for the 1990-1991 period should be $568.87 per
month effective January 1, 1990.
Pursuant to the above-mentioned order, the Commissioner notes
that the subject apartment's maximum rent effective January 1, 1990
is to be calculated by increasing the maximum rent in effect on
December 31, 1989 ($526.73 per month) by 7.5%. Accordingly, the
Commissioner finds that the subject apartment's maximum rent
effective on January 1, 1990 should be $566.23 per month.
The Commissioner points out that the reason why there is a
discrepancy in the maximum rents noted in this order and opinion,
and the maximum rents listed in the Administrator's order issued
under Docket No. FB120039RK, is the fact that the Administrator
reduced the 1988-1989 M.B.R. by $14.00 per month. The Commissioner
is of the opinion that the Administrator reduced the apartment's
1988-1989 M.B.R. as there were several orders issued by the rent
Docket No. EB110349RO
agency which reduced the subject apartment's maximum rent by $14.00
per month due to a finding of a diminution of services, which were
in effect prior to H.U.D. establishing the subject apartment's
maximum rent.
The Commissioner is of the opinion that the aforementioned
orders reducing the apartment's maximum rent due to a finding of a
diminution of services were superseded by H.U.D's pre-emption order
which was dated September 27, 1985. Accordingly, the Commissioner
is of the opinion that the $14.00 per month reduction of the 1988-
1989 M.B.R. by the Administrator was not warranted.
However, the Commissioner finds that the subject landlord is
required to restore services which were the basis of the prior rent
reduction orders issued by the rent agency, if the landlord has not
already done so.
The Commissioner is of the opinion that this order and opinion
is issued without prejudice to the right of the subject tenant to
file a new complaint for a reduction in rent due to a diminution of
the services which were the basis of the prior rent reduction
orders issued by the rent agency, if the facts so warrant.
As to the issue raised by the subject tenant that the
landlord's submission of the subject apartment's maximum rent to
H.U.D. was incorrect, the Commissioner finds that that issue is not
raised in the landlord's petition, and that the subject tenant did
not file a petition for administrative review of the
Administrator's order under review herein. As the above-mentioned
issue has not been raised in the petition for administrative review
of the Administrator's order under review herein, the Commissioner
finds that the subject tenant is estopped from raising that issue
in his answer to the landlord's petition.
THEREFORE, in accordance with the City Rent and Rehabilitation
Law and the Rent and Eviction Regulations, it is
ORDERED, that the landlord's petition, filed under Docket No.
EB110349RO be, and the same hereby is, terminated; and it is
FURTHER ORDERED, that the landlord's petition filed under
Docket No. FG120179RO be, and the same hereby is, granted in part,
and that the Administrator's order issued under Docket No.
FB120039RK be, and the same hereby is, modified in accordance with
this order and opinion; and it is
FURTHER ORDERED, that the subject apartment's 1988-1989 M.B.R.
shall be $526.73 per month effective January 1, 1988, and that the
subject apartment's 1990-1991 M.B.R. effective January 1, 1990
shall be $568.87 per month; and it is
FURTHER ORDERED, that the subject apartment's maximum rent
Docket No. EB110349RO
shall be as follows: $492.58 per month effective January 1, 1988,
$526.73 per month effective January 1, 1989, and $566.23 per month
effective January 1, 1990; and it is
FURTHER ORDERED, that the subject tenant may pay any
retroactive rent arising as a result of this order in one or more
lump sum payments or, at the tenant's option, in equal monthly
installments equal in number to the number of months between
January 1, 1988 and the date of issuance of this order; and it is
FURTHER ORDERED, that if the subject tenant vacates after the
issuance of this order, such retroactive rents, if any, shall be
due immediately.
ISSUED:
Joseph A. D'Agosta
Deputy Commissioner
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