DOCKET NO.:  EF710339RO
                              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   :   
     APPEAL OF                                ADMINISTRATIVE REVIEW
                                           :  DOCKET NO. EF710339RO
             RITA CAPOCCIAMO,                 DISTRICT RENT ADMINISTRATOR'S 
                                           :  DOCKET NO. ED710011R
                            PETITIONER        
     --------------------------------------X            


        ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART

     On June 23, 1990, the above-named petitioner filed a petition for administra 
     tive review of an order issued on June 7, 1990 by a Rent Administrator 
     concerning the housing accommodation known as Apartment 616, 630 Shore Road, 
     Long Beach, New York.

     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 petition for administrative review.

     This proceeding was commenced by the filing of a rent overcharge complaint, 
     dated April 3, 1990, by the sub-tenants of the subject apartment.  In their 
     complaint the sub-tenants asserted, among other things, that:


               1)   They commenced occupancy in the subject apart 
                    ment on December 15, 1988 at a monthly rent of 
                    $775.00;

               2)   The subject apartment was unfurnished;

               3)   The prime tenant, Rita Capocciamo, is an 
                    illusory prime tenant as she has never lived 
                    in the subject apartment;


               4)   The sub-tenants "should be given all rights of 
                    prime tenant";

               5)   The sub-tenants had to pay $1,162.00 to the 
                    broker, Greater South Shore Sales & Resales 
                    Corporation (also referred to in this proceed 
                    ing as South Shore Realty);












          DOCKET NO.:  EF710339RO

               6)   The $1,162.00 consisted of: a commission equal 
                    to one-month rent and a one-half month "man 
                    agement fee";

               7)   The collection of the above-mentioned "manage 
                    ment fee" by the broker, as alleged by the 
                    sub-tenants, was illegal, and 

               8)   The sub-tenants were informed that the afore 
                    mentioned broker would be collecting the rent 
                    money.


     To their complaint the sub-tenants attached, among other things, the 
     following:


               1)   A copy of the sub-tenants' initial lease with 
                    the prime tenant, Rita Capocciamo, dated 
                    December 9, 1988, commencing on January 15, 
                    1989 and expiring on January 31, 1990 at a 
                    monthly rent of $775.00;

               2)   A copy of the sub-tenants' renewal lease, 
                    commencing on February 1, 1990 and expiring on 
                    January 31, 1992 at a monthly rent of $845.00 
                    per month;

               3)   A copy of a receipt, dated December 5, 1988, 
                    stamped by the broker, the Greater South Shore 
                    Sales & Resales Corporation, which indicated 
                    payment by the sub-tenants in the amount of 
                    $1,162.00 to the above-mentioned broker, and 

               4)   A copy of a receipt, dated December 12, 1988, 
                    which indicated that the sub-tenants paid rent 
                    in the amount of $387.50 for the period con 
                    sisting of December 15, 1988 through December 
                    31, 1988, and the payment of one-month 
                    security in the amount of $775.00.


     On May 14, 1990, the sub-tenants submitted to the rent agency a copy of a 
     letter written to them by Rita Capocciamo, dated April 19, 1990.  The above- 
     mentioned letter stated, among other things, that:


               Enclosed, please find two money orders, one for $711.25 
               and one for 141.26, which represents the total amount of 
               dollars overcharged on your rent in error...The total 
               overcharge was $852.51, the same total as the combined 
               dollar amount of the money orders.



               As of May 1, 1990 the rent you will pay me is $769.75, 
               and will be so until your lease expires.  Since I am out 
               of town most of the time, please continue to leave the 


          DOCKET NO.:  EF710339RO

               rent checks at South Shore Realty as you have done in the 
               past.


     On May 18, 1990, the Administrator mailed a notice to the subject owner, 
     Paulsen Real Estate Corporation, directing it to submit to the rent agency "a 
     copy of the prime tenant's (Rita Capocciamo's) initial lease, the prior 
     tenant's lease and any letter, or copies of sublease agreements given to you 
     by the prime tenant."  The above-mentioned notice also directed the subject 
     owner to "describe the relationship between South Shore Realty and Paulsen 
     Real Estate Corporation," and to explain why South Shore Realty has been 
     collecting the sub-tenants' rent.

     Also, on May 18, 1990, the Administrator mailed to Rita Capocciamo a notice 
     directing her to submit proof to the rent agency that she had occupied the 
     subject apartment.  The notice stated that such proof could include utility 
     bills, and rent checks or receipts paid to the subject owner.  The notice 
     also directed Rita Capocciamo to explain to the rent agency the reason why 
     South Shore Realty is collecting the rent from the sub-tenants, and it also 
     directed her to submit to the rent agency proof of having moved her furniture 
     to storage and to submit monthly storage bills.

     In the subject owner's response, dated May 23, 1990, it stated that: "All 
     rent bills are mailed to Rita Capocciamo at 90 Waterford Road, Island Park, 
     New York...pursuant to the prime tenant's request."  The subject owner 
     further alleged that it does not bill the sub-tenants'; that there is no 
     relationship between the subject owner and South Shore Realty, and that there 
     is no sublease agreement between Rita Capocciamo and the subject owner.

     To its response the subject owner attached a copy of Rita Capocciamo's 
     initial lease which commenced on December 1, 1988 and expired on November 30, 
     1989 at a monthly rent of $722.77, and a copy of Rita Capocciamo's two-year 
     renewal lease commencing on December 1, 1989 and expiring on November 30, 
     1991 at a monthly rent of $769.75.

     On May 25, 1990, Rita Capocciamo submitted her response to the Administrator 
     which alleged, among other things, that she does not have any utility bills, 
     and that South Shore collects the sub-tenants' rent because she is often out 
     of town due to her job.

     To her response, Rita Capocciamo attached, among other things, a copy of a 
     rent check, dated December 14, 1988, in the amount of $722.77 paid to the 
     subject owner by Rita Capocciamo, and a copy of a bill from a moving company, 
     dated January 3, 1989, which indicated that on the above-mentioned date Rita 
     Capocciamo had some of her possessions moved from the subject apartment to 
     another location.

     In the order under review herein, the Administrator determined that there was 
     no evidence submitted which showed that Rita Capocciamo had occupied the 
     subject apartment, or that she had used the subject apartment as her primary 
     residence; that Rita Capocciamo was an illusory prime tenant; that the sub- 
     tenants were to be considered the prime tenants of the subject apartment; 
     that the subject owner was directed to offer a lease to the sub-tenants; that 
     the lease was to be effective February 1, 1990 and expire on January 31, 
     1992; that the legal regulated rent for the above-mentioned lease period was 
     to be $769.75 per month; that the sub-tenants commenced occupancy in the 
     subject apartment on December 15, 1988, and that the subject apartment's 
     legal regulated rent on the above-mentioned date was $722.77 per month.







          DOCKET NO.:  EF710339RO


     Furthermore, the Administrator's order found that there was a rent overcharge 
     of $5,651.79 from December 15, 1988 through May 31, 1990, including treble 
     damages, and the broker's commission and management fee minus $852.51 which 
     is the amount Rita Capocciamo refunded to the sub-tenants.  The Administrator 
     further found that the subject owner, Rita Capocciamo and the Greater South 
     Shore Sales & Resales Corporation were jointly and severally liable for the 
     above-mentioned amount due to the sub-tenants.

     In her petition, Rita Capocciamo asserts, among other things, that she did 
     not willfully overcharge the sub-tenants; that the excess rents that were 
     collected were refunded; that treble damages should not have been imposed; 
     that the sublease did not start until January 15, 1989 and not December 15, 
     1988; that the petitioner did not collect excess rent after May 1, 1990; that 
     the Administrator's order under review herein overstated the amount of the 
     overcharge by two months; that the petitioner should not be liable for the 
     $1,162.00 in commission and management fees collected by the broker as, the 
     petitioner asserts, she did not receive the above-mentioned amount; that as 
     the petitioner's initial lease commenced on December 1, 1988, and that she 
     submitted to the Administrator a cancelled rent check for December, 1988, and 
     a moving bill, dated January 3, 1989, the petitioner alleges that she has 
     substantiated her occupancy in the subject apartment prior to the commence 
     ment of the initial sublease, and that the petitioner states that: "there is 
     no lawful authority for the District Rent Administrator to order the 
     cancellation of the existing sublease between Petitioner and the Claimants 
     and awarding a new lease directly with the owner of the premises."

     After careful consideration, the Commissioner is of the opinion that this 
     petition should be granted in part.

     The Commissioner notes that pursuant to a request, by the subject owner, to 
     reconsider the Administrator's order under review herein, the Administrator 
     issued an amended order issued on August 23, 1990 under Docket No. EE 
     710021RK, finding that the owner, Paulsen Real Estate Corporation, did not 
     collect overcharges from the sub-tenants and that the owner was therefore not 
     required to refund money to the complainant.

     As to the petitioner's assertion that the overcharge was not willful, and 
     that treble damages, should not have been imposed, the Commissioner finds 
     that that assertion is without merit.

     The record reflects that the petitioner's initial lease, with the subject 
     owner, commenced on December 1, 1988 and expired on November 30, 1989 at a 
     monthly rent of $722.77.  The record further reflects that the above- 
     mentioned rental amount charged by the subject owner was, in fact, the legal 
     regulated rent for the subject apartment during the above-mentioned lease 
     period.




     Based on the record in this proceeding, the Commissioner finds that from 
     December 15, 1988 through January 31, 1990 the petitioner collected rent, 
     from the sub-tenants, in the amount of $775.00 per month.  Based on the 
     Administrator's order under review, the Commissioner finds that the subject 
     apartment's legal regulated rent for the above-mentioned period was $722.77 
     per month, and that the petitioner had overcharge the sub-tenants by $52.23 
     per month during the above-mentioned period.


          DOCKET NO.:  EF710339RO


     The record further reflects that the petitioner's renewal lease, with the 
     subject owner, commenced on December 1, 1989 and expired on November 30, 1991 
     at a monthly rent of $769.75 per month.  The record further reflects that the 
     above-mentioned rental amount charged by the subject owner was, in fact, the 
     legal regulated rent for the subject apartment during the above-mentioned 
     lease period.

     Based on record in this proceeding, the Commissioner finds that the sub- 
     tenants signed a renewal lease, with the petitioner, commencing on February 
     1, 1990 and expiring on January 31, 1992 at a monthly rent of $845.00 per 
     month.  Based on the Administrator's order under review herein, the 
     Commissioner finds that the subject apartment's legal regulated rent for the 
     above-mentioned period was $769.75 per month, and that the Administrator's 
     order had determined that the prime tenant had overcharged the sub-tenants by 
     $75.25 per month for four months.

     As the monthly rent the petitioner charged the sub-tenants was greater than 
     the monthly rent paid by the petitioner to the owner, the Commissioner finds 
     that this fact evidences an intent by the petitioner to willfully collect 
     rent from the sub-tenants in excess of the legal regulated rent.

     The Commissioner further finds that the refunding to the sub-tenants of the 
     $852.51 by the petitioner does not negate the Commissioner's finding that the 
     overcharge was willful as the petitioner did not refund all of the excess 
     rent collected from the sub-tenants.

     Accordingly, the Commissioner finds that the portion of the Administrator's 
     order which imposed treble damages should not be disturbed.

     The Commissioner notes that the sub-tenants submitted a receipt to the 
     Administrator showing that for the period December 15, 1988 through December 
     31, 1988 they paid $387.50 in rent.  Accordingly, the Commissioner finds that 
     it was proper for the Administrator to calculate overcharges commencing from 
     December 15, 1988.

     The Commissioner notes that the petitioner mailed a letter to the sub- 
     tenants, dated April 19, 1990, informing them that their rent effective on 
     May 1, 1990 will be $769.75 per month, which was the legal regulated rent at 
     that time.  As the record reflects that the petitioner did not collect excess 
     rent from the sub-tenants after April 30, 1990, the Commissioner finds that 
     the Administrator should not have calculated overcharges past April 30, 1990.

     As the Administrator's order under review herein determined that the 
     petitioner had collected $75.25 per month  in excess of the legal regulated 
     rent for four months during the sub-tenants' renewal lease period, which 
     commenced on February 1, 1990; that the record reflects that the petitioner 
     only collected excess rent during the above-mentioned renewal lease period 
     for three months, the Commissioner finds that the Administrator's order 
     should be modified to reflect the fact that the overcharge amount should be 
     reduced by $75.25 and that the total amount to be refunded to the sub-tenants 
     should be reduced by $225.75 ($75.23 X 3).  The Commissioner further finds 
     that the Administrator's order under review herein should be modified to 
     reflect the fact that the total amount that is to be refunded to the sub- 
     tenants is $5,426.04 ($5,651.79 - $225.75).

     Accordingly, the Commissioner finds that the petition should be granted in 
     part.







          DOCKET NO.:  EF710339RO


     As to the petitioner's allegation that she should not be liable for the 
     $1,162.00 in Commission and management fees paid to the broker by the sub- 
     tenants, the Commissioner finds that that allegation is without merit.

     The Commissioner finds, based on the record in this proceeding, that the 
     broker, Greater South Shore Sales & Resales Corporation, collected the rent 
     from the sub-tenants on behalf of the petitioner.  Accordingly, the 
     Commissioner finds that the Greater South Shore Sales & Resales Corporation 
     is an agent of the petitioner.

     Pursuant to Section 2505.1 of the State Tenant Protection Regulations the 
     term rent "shall also include the payment by a tenant of a fee or rental 
     commission to a landlord or to any person or real estate broker where such 
     person or real estate broker is an agent or employee of the landlord...."

     Based on the above-mentioned regulation, the Commissioner finds that the 
     payment by the sub-tenants to the aforementioned real estate broker of the 
     commission and management fees, in the amount of $1,162.00, constituted the 
     payment of rent.

     As the real estate broker, Greater South Shore Sales & Resales Corporation is 
     an agent of the petitioner; that the payment of the commission and the 
     management fees by the sub-tenants constituted rent, the Commissioner finds 
     that the Administrator's determination that the $1,162.00 in commission and 
     management fees should be included in the total overcharge amount should not 
     be disturbed.

     The Commissioner notes that the Administrator mailed to the petitioner a 
     notice, dated May 18, 1990, which stated that:


               Please submit evidence to substantiate your occupancy of 
               the subject apartment sending to this office copies of 
               your utility bills (electric, gas, telephone) and copies 
               of...rent checks or receipts that you paid to Paulsen 
               Real Estate.


     The record reflects that the petitioner did not submit to the rent agency 
     copies of any utility bills.  The record further reflects that in response to 
     the above-mentioned notice the petitioner submitted a copy of her cancelled 
     rent check, dated December 14, 1988, which was made out to the subject owner, 
     Paulsen Realty Corporation, in the amount of $722.77.  The petitioner also 
     submitted to the rent agency a copy of her aforementioned moving bill, dated 
     January 3, 1989.


     Based on the preponderance of the evidence in this proceeding, the 
     Commissioner finds that the petitioner has not met her burden of proof in 
     showing that she has used the subject apartment as her primary residence.

     As the Administrator determined that the sub-tenants commenced occupancy in 
     the subject apartment on December 15, 1988, the Commissioner finds that the 
     aforementioned moving bill, submitted by the petitioner, does not show that 
     the petitioner ever resided in the subject apartment, but it only shows that 
     the petitioner had some of her possessions, which were not specifically 
     listed in the moving bill, removed from the subject apartment on January 3, 


          DOCKET NO.:  EF710339RO

     1989.

     As to the copy of the aforementioned rent check submitted by the petitioner, 
     the Commissioner finds that it does not show that the petitioner resided in 
     the subject apartment, but that it merely shows that the petitioner had paid 
     rent to subject owner.

     Accordingly, the Commissioner finds that the Administrator's determination 
     that the petitioner did not submit evidence showing that she had used the 
     subject apartment as her primary residence should not be disturbed.

     As to the petitioner's assertion that the Administrator had "no lawful 
     authority" to cancel the sublease between the petitioner and the sub-tenants, 
     and that the Administrator had no right to direct the subject owner to offer 
     a prime lease to the sub-tenants, the Commissioner finds that that assertion 
     is without merit.

     As the record reflects that the petitioner has not been using the subject 
     apartment as her primary residence, and that the petitioner had collected 
     rent from the sub-tenants in excess of the legal regulated rent, the 
     Commissioner finds that the Administrator's determination that the petitioner 
     is an illusory prime tenant should not be disturbed.

     The Commissioner points out that when it has been determined that the prime 
     tenant is an illusory prime tenant, as in this proceeding, directing the 
     owner to offer a prime lease to the sub-tenants, is a long established policy 
     followed by the rent agency and the predecessor agency of the Division of 
     Housing and Community Renewal in administrating the various status providing 
     for the regulation of housing.

     The Commissioner notes that the Courts have affirmed the above-mentioned rent 
     agency policy.

     Accordingly, the Commissioner finds that the complainants, in this proceed 
     ing, are to be given all of the rights afforded to prime tenants pursuant to 
     the applicable rent regulations.

     THEREFORE, in accordance with the Emergency Tenant Protection Act of 1974 and 
     the State Tenant Protection Regulations, it is 

     ORDERED, that this petition be, and the same hereby is, granted in part, and 
     that the Administrator's order be, and the same hereby is, modified in 
     accordance with order and opinion, and it is 



     FURTHER ORDERED, that Rita Capocciamo and Greater South Shore Sales & Resales 
     Corporation shall immediately refund to the complainants all amounts not yet 
     refunded representing overcharges and penalties, and it is 

     FURTHER ORDERED, that if Rita Capocciamo and Greater South Shore Sales & 
     Resales Corporation have not refunded any such amounts upon the expiration of 
     the period for seeking judicial review of this order pursuant to Article 78 
     of the Civil Practice Law and Rules, then the complainants, Patricia Stefano 
     and Laura Flannery, may file and enforce a certified copy of this order as a 
     judgment for the amount of $5,426.04 against Rita Capocciamo, and Greater 
     South Shore Sales & Resales Corporation, jointly and severally, and it is 








          DOCKET NO.:  EF710339RO

     FURTHER ORDERED, that if Rita Capocciamo and/or Greater South Shore Sales & 
     Resales Corporation have already complied with the Administrator's order and 
     there are arrears due to the above-mentioned parties as a result of the 
     instant determination, the complainants shall be permitted to pay off the 
     arrears in three equal monthly installments beginning with the first rent 
     payment date after issuance of this order and opinion.  Should the complain 
     ants vacate after the issuance of this order or have already vacated, said 
     arrears shall be payable immediately.

     ISSUED:




                                                                              
                                                     JOSEPH A. D'AGOSTA
                                                     Deputy Commissioner
    

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