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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: ED 110388-RO
:
DRO DOCKET NO.: BE 110117-R
LEONEDAS REALTY CORP.
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On April 6, 1990, the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on March 6, 1990, by the
District Rent Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the garage space rented by the tenant of apartment 4E at 103-19
68th Road, Forest Hills, New York, wherein the District Rent Administrator
determined that the tenant had been overcharged.
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 commenced by the filing of a rent overcharge complaint
by the tenant, wherein the tenant challenged the legality of the rent
being charged for her garage space.
The tenant took occupancy of her apartment in June 1974. The tenant
first rented the garage space pursuant to a one-year lease commencing on
August 1, 1975 and expiring July 31, 1976, at a monthly rent of $35.00
plus tax.
In its answer, the owner contended, among other things, that, pursuant to
Section 2520.6 of the Rent Stabilization Code, the garage leases are not
subject to the Rent Stabilization Code because, even if common ownership
exists, it is not a service provided primarily for the use of the
building's tenants.
In Order Number BE 110117-R the Administrator found that the garage space
was subject to the Rent Stabilization Law; determined that the base rent
for the garage space was $74.20 (inclusive of $4.20 tax) for the period
February 1, 1984 through January 31, 1985; computed subsequent increases
above that base rent; and computed the total overcharge, inclusive of an
assessment of treble damages on overcharges since April 1, 1984, to be
$1,956.00.
In its petition, the owner alleges that the subject garage is not subject
to rent stabilization because it is not provided primarily for the use of
tenants, the garage leases do not run concurrently with apartment
DOCKET NUMBER: ED 110388-RO
leases the tenants are neither required to execute nor to renew garage
leases and the garage is separate and apart from the subject building,
i.e., separate entrance ways; that the garage lease gives the owner the
option to terminate on five days' notice, and was therefore not intended
to be subject to rent stabilization; and that since the owner was required
to pay taxes on the garage to the Department of Consumer Affairs, it is
reasonable for the owner to believe that the garage is not subject to rent
stabilization.
The owner further contended that the tenant's complaint concerned the
garage space rental only, and the initial legal registered rent for the
apartment should not have been determined.
The Commissioner is of the opinion that this petition should be denied.
Section 2520.6(r)(3), of the Rent Stabilization Code states, in pertinent
part:
[An ancillary service is] "That space and those required
services not contained within the individual housing
accommodation which the owner was providing on the applicable
base date..., and any additional space and services provided or
required to be provided thereafter by applicable law. These may
include, but are not limited to, garage facilities...."
Section 2520.6(r)(4) of the Rent Stabilization Code states:
(xi) A service as defined in paragraph (3) of this subdivision
(r) for which there is or was a separate charge, shall not be
subject to the provisions of this Code where no common ownership
between the operator of such service and the owner exists or
existed on the applicable base date, or at any time subsequent
thereto, and such service is or was provided on the applicable
base date and all times thereafter by an independent contractor
pursuant to a contract or agreement with the owner. Where,
however, on the applicable base date or at any time subsequent
thereto, there is or was a separate charge, and there is or was
common ownership, directly or indirectly, between the operator
of such service and the owner, or the service was provided by
the owner, any increase, other than the charge provided in the
initial agreement with a tenant to lease, rent or pay for such
service, shall conform to the applicable rent guidelines rate.
However, notwithstanding such common ownership, where such
service was not provided primarily for the use of tenants in the
building or building complex on the applicable base date or at
any time subsequent thereto, such increases shall not be subject
to any guidelines limitations.
Regarding the petitioner's argument that the garage is not a required
service under the Rent Stabilization Code, because it is not provided
primarily for the use of tenants, the Commissioner notes that a majority
of the parking spaces are leased to tenants of the building; that on the
base date, it is likely that more stabilized tenants held parking spaces;
and that the proximity of the garage to the subject building militates
towards its being predominantly for the use of the tenants of that
building.
DOCKET NUMBER: ED 110388-RO
Additionally, the owner lists the garage as a service provided by the
owner and lists the rent and lease term for the garage space on the
apartment's initial registration of services. The petitioners' assertions
regarding the absence of a requirement to execute or renew garage leases,
and that those leases are not concurrent with the apartment leases, and
that the owner is required to pay taxes on the garage, are irrelevant to
the stabilization status of the garage spaces. Accordingly, the
Commissioner finds that the garage space is subject to rent stabilization,
With regard to the "option to terminate on five days' notice" acknowledged
by the owner: the Commissioner cautions that such provision is void and
unenforceable under Section 2520.12 of the Rent Stabilization Code, which
states in pertinent part: "No renewal lease or vacancy lease offered to a
tenant shall contain any right of cancellation or eviction by the owner
during the term thereof except as provided for by the ETPA, the RSL or
this Code."
Concerning the petitioner's contention of lack of notice regarding the
possibility of treble damages being assessed, the Commissioner notes that
the evidence of record indicates that such notice was sent to the owner on
December 14, 1989, January 31, and February 21, 1990. Section 2526.1 of
the Rent Stabilization Code states in pertinent part; "any owner who is
found by the DHCR, after a reasonable opportunity to be heard, to have
collected any rent or other consideration in excess of the legal regulated
rent should be ordered to pay to the tenant a penalty equal to three times
the amount of such excess... If the owner establishes by a preponderance
of the evidence that the overcharge was not willful, the DHCR shall
establish the penalty as the amount of the overcharge plus interest...."
The Commissioner finds that the owner has failed to establish that the
overcharge was not willful. Accordingly, the Administrator was correct in
applying treble damages.
It appears from the record that the tenants intended to challenge only
their garage rent. However, it is noted that the Administrator, in
reviewing the tenants' apartment rent, found that the rent was lawful, and
there was no overcharge. The Commissioner finds that the owner was not
harmed by the Administrator's determination that the tenant's apartment
rent was lawful and therefore no modification of the Administrator's order
is warranted.
The Commissioner notes that the tenant, on June 16, 1990, requested
withdrawal of the proceeding, stating that she only intended to inquire
about her garage lease. This attempt to withdraw, following issuance of
the order, is not acceptable, as not only the rights of this tenant, but
the rights of future tenants who rent the subject garage spaces, will be
affected. The Commissioner notes that the tenant made a specific
allegation of overcharge on her garage rent in her initial complaint.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
DOCKET NUMBER: ED 110388-RO
ORDERED, that this petition be and the same hereby is denied and the
Administrator's order be and the same hereby is affirmed.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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