EA 410283 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 No.: 4975
          IN THE MATTER OF THE ADMINISTRATIVE  ADMINISTRATIVE REVIEW
          APPEAL OF                            DOCKET NO.: EA 410283 RO
                                                           
               Stuyvesant Town Associates,     DISTRICT RENT ADMINISTRATOR
                                               DOCKET NO.: L 3113613 RT
           
                                   PETITIONER  Tenant: Ephraim Katz        
          -----------------------------------X

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                       IN PART

          On January 26, 1990, the  above-named  petitioner-owner  filed  a
          Petition for Administrative Review of an order issued on December 
          22, 1989 by the District Rent  Administrator,  92-31  Union  Hall
          Street, Jamaica, New York concerning housing accommodations known 
          as Apartment 9C at 333 East 14th  Street,  New  York,  New  York,
          wherein the  District  Rent  Administrator  determined  the  fair
          market rent pursuant to the special fair  market  rent  guideline
          promulgated by the New York City Rent Guidelines Board for use in 
          calculating fair market rent appeals.

          Subsequent thereto,  the  petitioner  filed  a  petition  in  the
          Supreme Court pursuant to Article 78 of the  Civil  Practice  Law
          and Rules requesting that the "deemed denial" of the petitioner's 
          administrative appeal be annulled.  The proceeding  was  remitted
          to the DHCR for further processing.

          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 appeal.

          This proceeding was originally commenced  by  the  filing  of  an
          overcharge complaint and a fair market rent appeal application by 
          the tenant with the New York City Conciliation and Appeals Board, 
          one of the predecessor agencies to the  DHCR.   The  tenant  took
          occupancy pursuant  to  a  lease  commencing  July  15  1980  and
          expiring July 31, 1983 at a monthly rent of $475.33.

          In answer, the prior owner (Padar Realty Company) stated that the 
          property had be conveyed to Solil Management Corp. as of March 1, 
          1981; that all of the tenant's files and records  were  given  to
          Solil  Management;  and  that  the  only  records   Padar   still
          possessed were  copies  of  the  rent  rolls.   The  prior  owner
          submitted a copy of a rental history for  the  subject  apartment
          which was submitted to the Office of the Attorney General after a 
          review of Solil's records.  The rental history indicated  a  base
          date of September 1, 1975 and listed two stabilized tenants prior 
          to the complainant tenant.

          In the order under appeal herein, the District Rent Administrator 
          adjusted the initial legal regulated rent by establishing a  fair






          EA 410283 RO
          market rent of $131.78 effective July 15, 1980, the  commencement
          date of the initial rent stabilized lease, and directed the owner 
          refund to the tenant excess rent in the amount of $25,351.68.

          In this petition, the owner contends  that  a  fair  market  rent
          appeal  was  inappropriate  in  this  case  because  the  subject
          building was newly constructed in 1960 and was never  subject  to
          rent  control.   The  owner  submits  temporary  Certificates  of
          Occupancy from 1964 and a permanent Certificate of Occupancy  for
          a new building at the subject premises  indicating  a  completion
          date of January 1965.  The owner also asserts that it  was  never
          served with copy  of  the  tenant's  complaint  and  afforded  an
          opportunity to reply thereto.

          Subsequent to the filing of the administrative appeal, the  owner
          filed a petition in the Supreme Court pursuant to Article  78  of
          the Civil Practice Law and  Rules  requesting  that  the  "deemed
          denial" of the petitioner's administrative  appeal  be  annulled.
          By order of Justice Clifford A. Scott dated July  22,  1991,  the
          Administrator's  order  was  annulled  and  the  proceeding   was
          remitted to the DHCR for further processing.  The court  directed
          the DHCR to provide the owner with a copy of  tenant's  complaint
          and to afford the owner  an  opportunity  to  submit  a  response
          thereto.

          By notice dated September 16, 1991, the owner was served  with  a
          copy of the tenant's complaint and  afforded  an  opportunity  to
          submit a response thereto.

          By answer submitted October 15, 1991 the owner  submitted  copies
          of the tenant's leases from July 15, 1980 and  stated  that  only
          permitted guideline percentage increases  had  been  charged  the
          tenant and that, based thereon, the tenant's overcharge complaint 
          should be dismissed.  The owner reserved the right to  supplement
          its answer.

          By supplemental answer submitted November  19,  1991,  the  owner
          stated that it purchased the building some time in 1984 and  only
          received rental records from July 15, 1980 and that  despite  the
          owner's best efforts the owner has been unable to  obtain  leases
          and/or alternative rental documentation for the period from  June
          30, 1974 to  July  15,  1980.   The  owner  asserted  that,  upon
          information  and  belief,  the  tenant  resided  in  the  subject
          apartment prior to July 15, 1980 and that the  tenant  should  be
          requested to provide earlier leases.

          In reply to the owner's answer, the tenant asserted that  he  has
          resided in the subject apartment for over  ten  years;  that  the
          owner has still failed to submit a complete  rental  history  for
          the subject apartment; that the  owner's  submission  of  several
          Certificates of Occupancy does not mean,  ipso  facto,  that  the
          building was constructed in the early 1960's; that many buildings 
          have been constructed without the benefit  of  a  Certificate  of
          Occupancy and legalization has taken place after the  fact;  that
          the  Certificate  of  Occupancy  does  not  coincide   with   the
          representations of the cooperative offering plan for the  subject
          building  and  contains  numerous  inaccuracies,  including   the
          number and nature of units; and therefore  it  cannot  be  relied
          upon  as  conclusive  evidence  as  to  when  the  building   was






          EA 410283 RO
          constructed.  The tenant further  requests  an  award  of  treble
          damages based on willful overcharges.

          In answer to a subsequent notice from the DHCR, the owner advised 
          that it took title from the prior owner,  GSL  Enterprises  Inc.,
          c/o Solil Management  Corp.,  on  November  30,  1983  and  first
          collected rent from the tenant on December 1, 1983.

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

          Section 42A of the Rent Stabilization Code requires that an owner 
          retain complete rent records for each stabilized  apartment  from
          June 30, 1974 (or the date the apartment became subject  to  rent
          stabilization, if later) to date and produce such records to  the
          DHCR upon demand.


          Section 25 of the Code provides that a fair  market  rent  appeal
          application may be filed by the tenant of an apartment which  was
          subject to rent stabilization or rent control prior  to  July  1,
          1971 and was vacated between January 1, 1974 and June  30,  1974,
          both dates inclusive, or of an apartment  which  was  subject  to
          rent control on June 30, 1974 and vacated thereafter.

          The owner has submitted temporary Certificates of Occupancy  from
          1964 and a permanent Certificate of Occupancy for a new  building
          at the subject premises indicating a completion date  of  January
          1965.  The tenant's unsupported allegations fail to outweigh  the
          owner's documentation  proving  that  the  subject  building  was
          constructed in the 1960's.  It is noted that DHCR records include 
          an Office of Rent Control order (Docket Number  2ADW-2340)  dated
          November 26, 1968 pertaining to 333 East 14th Street, Apt. 3F, in 
          which it was determined that the premises in  question  were  not
          subject to rent control control pursuant to  Section  2(f)(8)  of
          the Regulations relating to  housing  accommodations  which  were
          completed on or after February 1, 1947.  This is consistent  with
          the owner's claim that the subject building  was  constructed  in
          1960 and was  never  subject  to  rent  control.   Therefore  the
          Commissioner finds that the processing of this  case  as  a  fair
          market rent appeal was improper.

          By notice dated September 16, 1991, the  owner  was  afforded  an
          opportunity to submit a complete rent  history  for  the  subject
          apartment.  In response, the owner stated that it was  unable  to
          submit rent records for the period from June 30, 1974 to July 15, 
          1980, the  date  the  complainant  tenant  took  occupancy.   The
          owner's assertion that the tenant occupied the subject  apartment
          prior to July 15, 1980 is undocumented.  The  Commissioner  finds
          that the burden of submitting  rental  records  for  the  subject
          apartment from the base  date  rests  with  the  owner,  not  the
          tenant.  It is further found that the rental history submitted by 
          the prior owner, which indicated a base date of September 1, 1975 
          and listed  two  stabilized  tenants  prior  to  the  complainant
          tenant, was  submitted  without  supporting  documentation.   The
          Commissioner therefore finds that the owner has failed to  submit
          the required rental history from the June 30, 1974 base  date  as
          required by Section 42A of the  Code  and  therefore  the  lawful
          stabilized  rent  should  be  determined  based  on  the  default






          EA 410283 RO
          procedure.

          DHCR has adopted a procedure for determining  an  apartment  rent
          where an owner does not provide a complete rent  history  of  the
          apartment.  In such cases the rent is calculated to be the lowest 
          of the following amounts: 1) the lowest  stabilized  rent  for  a
          similar apartment in the same building with the  same  number  of
          rooms; 2) the current tenant's initial rent minus  any  allowance
          for the tenant's initial lease; or 3)  the  prior  tenant's  last
          rent, if known.

          Accordingly, the Commissioner establishes the  lawful  stabilized
          rent for the subject apartment as follows:

          1)   The lowest rent for the same size apartment in the  building
               (as  indicated  on  the  Division's  apartment  registration
               records) - apartment 6E - $242.62

          2)   The  current  tenant's  initial  rent  of  $475.53  minus  a
               guideline increase of 17% and a  vacancy  allowance  of  10%
               pursuant to Rent Guidelines Board Order Number 12 - $374.43.

          3)   The prior tenant's last rent - unknown.
          Method Number 1 results in the lowest amount, and therefore  this
          method will be used to establish the lawful stabilized rent.  The 
          lawful stabilized rent effective July 15, 1980 is established  at
          $248.96  ($242.62  plus  $6.34   Section   20(1)   increase   for
          improvements).

          Pursuant to DHCR policy, the initial stabilized rent  established
          pursuant to the default procedure remains frozen and no guideline 
          increases are permitted until the first renewal lease  subsequent
          to the Administrator's order.

          Section 2526.1 of the current Rent Stabilized Code provides  that
          any owner who is found by DHCR to have  collected  an  overcharge
          shall be liable for a penalty equal to three times the amount  of
          the overcharge.  If the owner establishes by a  preponderance  of
          the evidence that the overcharge was not willful, the DHCR  shall
          establish the penalty as interest on the overcharge from April 1, 
          1984.

          In this case, the owner was advised by notice dated September 16, 
          1991  that  treble  damages  would  be  imposed  on   overcharges
          collected on or after April 1, 1984.  The owner asserts that  the
          tenant was not overcharged, but the owner has  failed  to  submit
          rent records to prove the lawfulness of the tenant's  rent.   The
          owner was obliged to obtain such records  upon  purchase  of  the
          subject building and to ensure that  the  tenant  was  charged  a
          lawful rent in  accordance  with  the  stabilization  guidelines.
          This the owner failed to do.  The  Commissioner  finds  that  the
          owner has failed to establish by a preponderance of the  evidence
          that the overcharge was not willful, and therefore treble damages 
          should be imposed on overcharges collected on or after April   1,
          1984.  The Commissioner notes that, inasmuch  as  the  proceeding
          was processed before the Administrator  as  a  fair  market  rent
          appeal to which treble damages do not apply, it is appropriate on 
          the reprocessing of the case on administrative  review  based  on
          the default procedure to impose treble  damages  after  affording






          EA 410283 RO
          due process by notifying the  owner  that  by  statutory  mandate
          treble damages would be imposed for willful overcharges.

          The lawful stabilized rent and total  amount  of  overcharge  are
          recalculated on the attached rental history chart, which is fully 
          made a part of this order  and  opinion.   The  total  amount  of
          overcharge, including treble damages, is $30,975.13.

          Section 2526.1(f)(1)  provides  that  for  overcharges  collected
          prior to April 1, 1984, an owner will be  held  responsible  only
          for his or her portion of the  overcharges,  in  the  absence  of
          collusion or any relationship between such owner  and  any  prior
          owners.

          The liability for overcharges is allocated as follows:

          The prior owner Padar Realty Co. Inc., is  liable  for  $1699.28,
          representing overcharges collected from July 15, 1980 to February 
          28, 1981.   The  prior  owner  GSL  Enterprises  Inc.  c/o  Solil
          Management Corp. is liable for $7667.01, representing overcharges 
          collected from March 1, 1981 to November 30, 1983.

          Inasmuch as the prior owner Padar Realty Co. Inc. was  not  named
          as an owner in the Administrator's order and the prior owner  GSL
          Enterprises Inc. c/o Solil Mgt. Corp. was  not  notified  of  the
          tenant's complaint or afforded an opportunity to respond  thereto
          and was not named as an owner in the  Administrator's  order,  no
          directive to refund against those  owners  is  included  in  this
          order and opinion.  This order  and  opinion  is  issued  without
          prejudice to the tenant's rights, if any, to proceed against  the
          prior owners in a court of competent jurisdiction.  

          The current  owner  Stuyvesant  Town  Associates  is  liable  for
          $21,608.84, representing overcharges collected from  December  1,
          1983 to July 31, 1986, including treble  damages  on  overcharges
          collected on or after April 1, 1984  and  excess  security.   The
          owner is directed to refund this amount to the tenant.

          As to the overcharges collected by the current owner, this  order
          may upon the expiration of the period  in  which  the  owner  may
          institute a proceeding  pursuant  to  Article  78  of  the  Civil
          Practice Law and Rules, be filed and enforced as a  judgement  or
          not in excess of twenty percent per month thereof may  be  offset
          against any rent thereafter due the owner.

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

          ORDERED, that the petition be and the same hereby is  granted  in
          part and that the District Rent Administrator's order be and  the
          same hereby is  annulled  and  the  lawful  stabilized  rent  and
          amount of overcharge are  established  in  accordance  with  this
          order and opinion.

          ISSUED:

           
                                                       JOSEPH A. D'AGOSTA
                                                       Deputy Commissioner






          EA 410283 RO









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