DHCR Decisions
DOCKET NUMBER: SJR 5011; EA 210210-RO
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 SJR N0.: 5011
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: EA 210210-RO
:
DRO DOCKET NO.: 052742
KRZYSTOF MATSZCZYK PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART
On January 5, 1990 the above named petitioner-owner filed a Petition for
Administrative Review against an order issued on December 5, 1989 by the
Rent Administrator at Gertz Plaza, Jamaica, New York, concerning housing
accommodations known as Apartment number 2L (also sometimes described as
2nd Floor Front) at 756 Leonard Street, Brooklyn, New York, wherein the
Administrator established the stabilized rent and directed the owner to
refund $24,912.79 including treble damages from April 1, 1984.
Subsequently, the Petitioner filed a Petition in Supreme Court, New York
County, requesting that the "deemed denial" of the Petitioner's
administrative appeal be annulled.
Thereafter, pursuant to a stipulation dated August 2, 1990, the matter was
remanded to the Division for processing on the merits.
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the evidence relevant to the issues
raised in the administrative appeal.
This proceeding was originally commenced on November 2, 1984, by the
timely filing of an Objection to the Initial Registration Statement by the
tenant, Maria Raia. In that Objection the tenant asserted that: occupancy
in 1963; the registered rent on April 1, 9984 was $280.00 per month; and
that she was and she was being overcharged. The tenant also alleged that
the Initial Registration Statement did not include heat and hot water as
services provided at the subject premises.
The owner was first served with the Objection on March 13, 1989. The
owner submitted a rental history from September 1, 1980, but asserted that
it had purchased the subject building in 1985 and could not provide a copy
of the lease in effect on April 1, 1980.
On the chart attached to and made a part of the order, based on the
owner's purported failure to provide a rental history to April 1, 1980,
the Administrator used the 42A default procedure to establish the
stabilized rent.
In its Petition the owner asserts that:
DOCKET NUMBER: SJR 5011; EA 210210-RO
1. The Administrator miscalculated the base rent under the 42A
procedure and the 42A procedure should not have been applied
because the first lease the owner was able to provide, the
9/1/80-8/31/83 lease, clearly indicates it was a renewal lease
and the monthly rent provided therein was $257.00. The
Administrator could have easily extrapolated the rent from that
9/1/80-8/31/82 lease, which was subject to the Guidelines 12
increase of 17% for a three year lease.
2. The petitioner current-owner acquired title to the building
in 1985 and did not receive any lease for the subject apartment
for the period 8/31/83 through 9/30/85. However, the 1984 and
1985 registrations showed a rent of $280.00 was charged. This
may have constituted an overcharge of $5.00 per month if the
Guidelines (14) increase of 7% for a two year lease applied.
3. All increases charged by the owner were in accordance with
the applicable Guidelines orders. If there were any errors in
calculating the rent, they were made by the prior owner's
attorney, who prepared the annual registration statement for
1984. The petitioner was justified in relying on these
calculations in computing all future rents to date; especially
in view of the fact that the tenant's objection was not served
on the Petitioner until March 13, 1989. If there were any
overcharges they should be refunded by the Petitioner's
predecessors in title.
4. The imposition of treble damages and the resultant
assessment of a $25,000.00 overcharge was inappropriate
under the circumstances of this proceeding.
5. The petitioner requests a hearing .
6. The petitioner concedes that heat and hot water services
should have been listed as building wide services in the
initial registration statement.
The tenant has interposed an answer opposing the Petition. The tenant
asserts, that:
1. The Petition was not timely.
2. It was not served on the tenant by the owner
3. The order below was correct since
a) The owner failed to provide a complete
rental history; and
b) the overcharge was properly calculated
4. Intent is irrelevant on the question of
willfulness. The imposition of treble damages was
appropriate.
5. Owners by buildings with all of their
liabilities and assume all of the
responsibilities of ownership. The owner should
not be permitted to deprive the tenant of the
tenant's rights because the registration
DOCKET NUMBER: SJR 5011; EA 210210-RO
statement was prepared by an attorney.
6. In this answer the tenant does not waive her
rights to continue to contend that the subject
apartment is rent controlled and is not subject
to the Rent Stabilization Law and Code.
The Commissioner believes that the Petition should be granted in part.
The Commissioner finds that the petition was timely filed. The
commissioner notes that, as the tenant may not have been aware, Petitions
are not served directly by the petitioners, but are filed with DHCR and
DHCR then serves a copy on the other party. Thus, it is not unusual for
the other party to receive its copy of the Petition more than 35 days
after the appealed order is issued.
The Commissioner notes that annual registration statements have been
filed for the subject apartment since 1984. The Commissioner notes that
although the instant objection to registration was filed on November 2,
1984, and the Petitioner purchased the subject building in 1985, no
notice of this proceeding was served on the owner until March 13, 1989.
The Commissioner finds that under the particular circumstances of this
case, it is appropriate to calculate the April 1, 1980 rent on the basis
of the rent provided for in the September 1, 1980 through August 31, 1983
lease (which lease, the Commissioner finds was, clearly, a renewal lease)
by subtracting the 17% renewal increase for a three year lease commencing
September 1, 1980 under Guideline 12. This approach is further warranted
by an examination of maximum base records for the subject premises which
discloses that on September 2, 1979 under docket 4M4499 the then owner
submitted an Operation and Maintenance and Essential Services
Certification indicating that tenant Raia's apartment was decontrolled at
a rental of $219.30 per month. Thereafter it is appropriate to calculate
the stabilized rent for the subject apartment using a deemed lease for the
period September 1, 1983 through September 30, 1985. The Commissioner
notes that Rent Guidelines Board Orders promulgated pursuant to the Rent
Stabilization Law provide that fractional term renewals may be deemed
extended so that fractional terms of less than one year may be deemed full
one year terms, fractional terms of less than two years may be deemed full
two year terms, and fractional terms of less than three years may be
deemed full three year terms.
The order below indicates that after the expiration of the 9/1/80-8/31/83
lease the tenant paid the prior owner $280.00 per month. By virtue of the
fractional terms provisions of the Rent Guidelines Board Guidelines 14 and
based on previous decisions by the CAB and the Division, the Commissioner
finds that the tenant was in occupancy pursuant to a deemed three year
lease running from September 1, 1983 to September 30, 1985, for which the
owner was entitled to a 10% increase above the lawful September 30, 1982
rent of $257.00 as set forth on the rent calculation chart attached hereto
and made a part hereof.
The Commissioner notes that in the answer to the Petition, the tenant
does not refute the accuracy of such calculations as proposed in the
Petition, as an appropriate method for determining the rent paid on April
1, 1980. The Commissioner also notes that although the tenant was sent
four separate demands for a rental history from April 1, 1980, the tenant
never responded to any of them.
The Commissioner also notes that the tenant must know what that rental
DOCKET NUMBER: SJR 5011; EA 210210-RO
history was as she has resided in the subject apartment since 1963,
according to the Objection the tenant filed below.
Therefore, the Commissioner finds that the overcharges to be refunded and
the tenant's stabilized rent are determined as indicated on the chart
annexed hereto and made a part hereof and the order below should be
amended to reflect these findings. The Commissioner further finds, as
all parties concede, that the Administrator properly directed that the
registration statement for 1984 be amended to reflect the fact that heat
and hot water are provided services at the subject premises. As to that
part of the order below, the Commissioner finds that said order should be
affirmed.
With regard to the owner's contention that the imposition of treble
damages was not warranted, Section 2526.1 of the Rent Stabilization Code
provides in pertinent part that any owner who is found by the DHCR to have
collected any rent or other consideration in excess of the legal regulated
rent on and after April 1, 1984 shall 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 from the date of the first overcharge on or after
April 1, 19 84.
In this case using the complete rental history, the rent overcharge has
been calculated on the attached rent calculation chart as $730.00
including treble damages. The overcharge occurred during the lease period
commencing October 1, 1987 (after the current owner's unlawful charging of
a $10.00 low rent allowance under Guideline 19 when it had already
received a low rent allowance of $15.00 under Guideline 17. The owner has
submitted no evidence to show the overcharge was not willful and
accordingly the imposition of treble damages was warranted.
The owner has requested that a hearing be held in this matter but has
failed to establish that a hearing is necessary for the proper
determination of this appeal. This request is therefore denied by the
Commissioner.
Concerning the tenant's claim that the subject apartment is rent
controlled, the Commissioner notes that: 1. that issue is not properly
before him under this Petition; 2. there is now pending before a Rent
Administrator a proceeding brought by the tenant for a determination of
the status of her apartment; and 3. on September 6, 1990, that
Administrator sent a notice, to the tenant and the owner, that said
Administrator proposes to issue a determination that the apartment is not
rent controlled, but rent stabilized. The Commissioner also notes that
said notice offers each party the opportunity to comment in writing on the
proposed action and, to date, neither party has filed a statement in
response to said notice. The Commissioner further notes that the
Division's records, which disclose that a Report of Statutory Decontrol
due to owner occupancy was accepted under an order issued in 1962 under
docket no. DR 44680, indicate that the aforesaid proposed action appears
to be in accordance with the applicable law and regulations and that if
the issue in question were now before the Commissioner, the Commissioner
would rule herein as the Administrator has proposed to rule in said
notice.
This order may upon the expiration of the period in which the owner may
institute a proceeding pursuant to Article Seventy-Eight of the Civil
DOCKET NUMBER: SJR 5011; EA 210210-RO
Practice Law and Rules, be enforced by the tenant in the following manner:
not in excess of twenty percent of the overcharge to be refunded per month
may be offset against any rent thereafter due the owner.
If the owner has already complied with the Administrator's order and there
are arrears due to the owner as a result of the instant determination, the
tenant may pay off the arrears in thirty-six (36) equal monthly
installments. Should the tenant vacate after the issuance of this order,
said arrears shall be payable immediately.
THEREFORE, pursuant to the Rent Stabilization Law and Code, 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 amended in
accordance with this order and opinion. The lawful stabilization rents
and amount of rent overcharge are established on the attached chart which
is fully made a part of this order. The amount of the rent overcharge
through September 30, 1989 is $730.00.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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