Admin. Review Docket Nos.: EB 120364 RO and EC 120559 RT

           
                                  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.s: 6204, 5169 and
                                                         5115

          IN  THE  MATTER  OF  THE  ADMINISTRATIVE   ADMINISTRATIVE  REVIEW
          APPEALS OF                           DOCKET NO.: EB 120364 RO
                                                           EC 120559 RT    
            VINCENT GIANELLI,         
                                Petitioner-
                                Owner, and     DRO DOCKET NO.:     
            EMMA SANTO,                               DA 120053 RP   
                                Petitioner-          (AB 100001 AD)      
                                Tenant                                

          ----------------------------------X

            ORDER AND OPINION DENYING OWNER'S PETITION FOR ADMINISTRATIVE
              REVIEW AND REMANDING PROCEEDING UPON TENANT'S PETITION FOR
             ADMINISTRATIVE REVIEW FOR THE LIMITED PURPOSE OF FIXING THE
            MAXIMUM RENT AND DETERMINING THE DWELLING SPACE AND ESSENTIAL
                                 SERVICES, FURNITURE
                           AND FURNISHINGS AND EQUIPMENT 


          The above-named petitioner-owner and the above-named petitioner
          tenant each timely filed a  Petition  for  Administrative  Review
          against an order  issued  on  February  16,  1990,  by  the  Rent
          Administrator at  Gertz  Plaza,  Jamaica,  New  York,  concerning
          housing accommodations known as Apartment #1 at 22-11 149 Street, 
          Whitestone, New York,  wherein  the  Administrator  modified  his
          order of August 14, 1986 (which  had  been  issued  under  Docket
          Number AB 100001 AD); in said modified  order  the  Administrator
          determined that the subject housing accommodation was subject  to
          regulation under the City Rent [Control] Law  and  the  Rent  and
          Eviction Regulations as of the date of occupancy, established the 
          maximum rent as of  July  1,  1984  at  $375.00  per  month,  and
          determined the dwelling space, essential services, furniture  and
          furnishings and  equipment  required  to  be  provided  with  the
          subject housing accommodation.


          Subsequently, each petitioner filed a Petition under  Article  78
          of the New York Civil Practice Law and Rules  in  Supreme  Court,
          Queens County, in the nature of an  application  for  a  writ  of
          mandamus, requesting that a  determination  of  their  respective
          Petitions for Administrative Review  be  issued.  Pursuant  to  a
          Stipulation  of  Settlement  entered   into   between   the   two
          petitioners and the Division on February 25,1992, the matter  was
          remanded to the Division for further processing.


          The Commissioner has reviewed all of the evidence in the  record,






          Admin. Review Docket Nos.: EB 120364 RO and EC 120559 RT
          as well as taken notice of the content of  affidavits,  petitions
          and affirmations submitted in the various Article 78  proceedings
          related hereto, and has carefully considered that portion of  the
          evidence relevant to the  issues  raised  in  the  administrative
          appeals. Pursuant to Section 2208.1(c) of the Rent  and  Eviction
          Regulations,  these  Petitions  for  Administrative  Review   are
          consolidated herein.


          The issue in the owner's appeal is whether the Administrator  was
          correct in determining that  the  subject  apartment  is  a  rent
          controlled apartment. The issues raised by  the  tenant's  appeal
          are whether the Administrator erred in fixing the maximum rent at 
          $375.00 and in fixing the rent as of July 1,1984 as opposed to as 
          of May  1,1950,  as  Section  2202.22  requires  if  the  subject
          apartment was never registered.


          The record herein indicates the  following  background  to  these
          proceedings.


          In 1946, Emma Russell, the daughter  of  Harry  Russell,  married
          Louis Santo. The newly married Santos took up  residence  in  the
          subject building, the house owned by Harry Russell; and continued 
          to reside there with the three sons subsequently born to them  in
          1947, 1952 and 1955, respectively. Subsequent to the commencement 
          of the proceedings below, Louis Santo  passed  away.  Emma  Santo
          currently occupies the subject  accommodation  with  one  of  her
          grown children.


          In 1954, Harry Russell, who had resided in the  subject  building
          prior thereto, married  Raye  Russell.  Harry  and  Raye  Russell
          resided together in the subject building until  sometime  in  the
          mid-1980's. Harry Russell fell ill in  1984.  In  1984  or  1985,
          title to the subject building was changed from its former  status
          (apparently, in Harry Russell's name, alone)  to  (apparently)  a
          Tenancy by the Entirety shared by Harry and Raye  Russell.  Harry
          Russell died in 1986. From sometime in 1984 or 1985, to  sometime
          in mid-1986, Raye Russell turned the management of  the  building
          over to her niece, Lucille Vasquez. By a deed dated February  11,
          1987, Raye Russell transferred title to the subject  building  to
          the current owner-petitioner, Vincent Gianelli.  


          An inspection of the subject building conducted by  a  member  of
          the Division's  staff  on  February  9,1990  indicates  that  the
          subject building is a two story  structure  built  on  top  of  a
          basement level; that at the time of said  inspection,  the  first
          story contained a three bedroom apartment (the subject apartment) 
          and  that  there  was  another  apartment  over  that,  but   the
          inspector did not gain access  to  the  interior  of  the  second
          story. According to statements made by both parties,  the  second
          story contains habitable living space. The tenants assert that at 
          all times relevant  hereto,  said  space  contained   a  complete
          apartment with separate  cooking  facilities.  The  owner  claims
          that for  at  least  some  time  after  Raye  and  Harry  Russell
          established their marital domicile in the subject  building,  the






          Admin. Review Docket Nos.: EB 120364 RO and EC 120559 RT
          space on the  second  story  contained  little  more  than  their
          sleeping  accommodations,  with  all  residents  of  the  subject
          building sharing  the  kitchen  in  the  subject  apartment.  The
          tenants claim that the two apartments were  always  separted  and
          accessed  from  separate  entrances  from  the  exterior  of  the
          building. Raye Russell states that a separate  entrance  for  the
          second story was installed in 1956.


          It is uncontroverted that from at least 1956 to 1983, the tenants 
          paid Harry Russell some money on a regular basis.  The  assertion
          of the prior owner, Raye Russell is that said payments  were  for
          shared household expenses. The tenants assert that said  payments
          were rent. 


          The proceeding below  was  originally  commenced  on  October  7,
          1985, by the filing  by  the  tenants  of  a  complaint  of  rent
          overcharge.  Pursuant  to  accepted  procedure,  that  proceeding
          (which  had  been  assigned  Docket  Number  QC  000246  R)   was
          terminated, as a matter of internal "bookkeeping",  so  that  the
          Administrator could open a proceeding under  Section  2202.22  of
          the Rent and Eviction Regulations to determine the  maximum  rent
          and other facts relating to the subject  tenancy.  Docket  Number
          AB 100001 AD was assigned to that Section 2202.22 proceeding. 


          On August 14,  1986,  under  Docket  Number  AB  100001  AD,  the
          Administrator issued an order in which it was determined that the 
          subject apartment was a rent controlled apartment. In said order, 
          the Administrator determined the maximum rent  as  of  August  1,
          1970 at $108.75. 


          Raye Russell, by her then attorney-in-fact, filed a Petition  for
          Administrative Review against the order of August 14, 1986. Under 
          the pressure of an Article 78 Proceeding brought by  the  current
          owner to compel the issuance of a determination  of  that  appeal
          and the Division's inability to locate the record  below  (Docket
          Number AB  100001  AD)  the  Commissioner  issued  an  order  and
          determination remanding the proceeding to the  Administrator  for
          further development of the facts. 


          Upon remand, both parties were given notice of an opportunity  to
          present  arguments   and/or   evidence   in   response   to   the
          Administrator's announced intention to reconsider  the  order  of
          August  14,  1986.  Both  parties  availed  themselves  of   this
          opportunity.


          Based on the record so compiled on remand, the Administrator 
          issued the order which is the object of the instant  appeals  and
          which is more fully described hereinabove.

           
          The Commissioner is of the  opinion  that  the  owner's  Petition
          should be denied and that the tenant's Petition should be granted 
          to the extent of remanding the proceeding  to  the  Administrator






          Admin. Review Docket Nos.: EB 120364 RO and EC 120559 RT
          for the limited  purpose  of  reconsidering  the  appealed  order
          insofar as the amount fixed as the maximum rent, and the dwelling 
          space and  essential  services,  furniture  and  furnishings  and
          equipment that the owner was found to be required to provide; and 
          reconsidering the date as of which said  maximum  rent,  dwelling
          space, essential services, etc. are to be fixed.


          The Commissioner finds that the owner did not meet the burden  of
          proof required to overcome the presumption that the  relationship
          between two parties, where one lives in accommodations  owned  by
          the other and makes regular payments of money to the other, is  a
          landlord tenant relationship.  The  family  relationship  between
          Emma Santo and the tenants' original landlord, Harry Russell,  is
          not probative of any fact, and creates no  presumption,  relevant
          to these proceedings.


          The Commissioner, therefore, finds, that from  the  beginning  of
          their occupancy of the subject apartment as a married couple,  in
          1946, the occupancy of Emma and Louis Santo, and their  children,
          was based on the creation of a landlord-tenant relationship  with
          the  owner  of  the  subject   building,   Harry   Russell.   The
          Commissioner notes that the tenants's assertions to  that  effect
          are corroborated by at least one other individual,  Rose  Vivone,
          who had first-hand knowledge of material facts  and  who  has  no
          apparent interest in these proceedings.


          Moreover, the Commissioner notes that the owner appears  to  have
          submitted substantially inaccurate information herein. Annexed to 
          his submission of November 30, 1989, the  current  owner  annexed
          the November 28, 1989 affidavit of Raye Russell.  The  submission
          of said affidavit is the closest the current owner  has  come  in
          these proceedings to presenting competent  evidence  relating  to
          the events that preceded his purchase of the subject building  in
          1987. In that affidavit, at  paragraphs  8.,  9.  and  10.,  Raye
          Russell made the following statements:

                8. In 1984, my husband Harry  became  ill,  he  was  89
               [there is a handwritten  notation  that  indicates  that
               this figure may have been revised to read 84]  years  of
               age and was the only person on the Deed  to  the  house.
               Because Harry and I were married at that time for almost 
               30 years, Harry put myself on the Deed  as  a  co-owner.
               Because Harry was so ill, my time was taken up by  being
               with my husband, Harry Sr.

                9. During this period of time, I  had  also  broken  my
               leg. My dear husband Harry was severely ill  and  I  was
               not able to take care of the affairs of  the  house.  At
               that time, Lucille Vasquez, my niece, was in the  house.
               I had asked  Lucille  to  take  care  of  the  household
               expenses on my behalf.

               10. Lucille took care of the  house  through  mid  1986.
               During this  time,  I  had  not  authorized  Lucille  to
               collect any rent at all from Emma [Santo] or her family. 
               I had never signed any rent  checks  from  Emma  or  her






          Admin. Review Docket Nos.: EB 120364 RO and EC 120559 RT
               family, and no rent checks were ever paid to me or on my 
               behalf.


          With their submission of December 5, 1989,  the  tenants  included
          copies of what appear to be the front and  back  of  nine  checks,
          each for $400.00 and bearing a notation which indicates that  they
          were given in payment of rent for  the  months  of  October,  1985
          through May of 1986. Each check is drawn on the account  of  Louis
          Santo and Emma Santo, is payable to either Harry  Russell,  alone,
          or Raye and Harry Russell, and appears to bear,  on  its  reverse
          side, the endorsement of the payee (or payees)  followed  by  the
          endorsement of Lucille Vasquez and  what  appear  to  be  various
          notations and stamps indicating that each check was deposited  at
          one bank and then paid by the drawers' bank.

          The Commissioner finds  that  either  the  tenants  created  nine
          astoundingly sophisticated false documents or the  current  owner
          knowingly, or recklessly, submitted, as part of an affidavit,  an
          untrue statement. The Commissioner believes and finds the  latter
          to be the case; and notes that although without  the  finding  of
          this falsehood, the current owner would still not  have  met  his
          burden of proof herein; with this finding, the  accuracy  of  the
          entire affidavit of Raye Russell must be called into doubt.


          Turning to the tenant's Petition, the Commissioner finds that the 
          tenant is correct in the assertion that Section 2202.22(b) of the 
          Rent and Eviction Regulations requires that in a situation  where
          the apartment was never registered,  the  Administrator's  "order
          shall fix or establish the maximum rent as of May 1,1950, or  the
          date of first renting, whichever is later...."  The  Commissioner
          finds, however, that the Division's records contain two OPA  (the
          federal Office of Price Administration) registration cards  which
          show that a  building  with  the  address,  22-11  149th  Street,
          Whitestone, Queens was registered, by an owner other  than  Harry
          Russell, with the Office of Price Administration, in 1943,  as  a
          building containing two rented apartments. The Commissioner notes 
          the tenants' statement that the addresses on the block where  the
          subject building is located were changed at some point  and  that
          the subject building was originally known as 22-09 149th  Street;
          that the tenant Emma Santo stated that she  and  her  father  had
          resided in the building from 1939; that  the  logical  inferences
          created by these two registration cards would, if the  cards  did
          relate to  the  subject  building,  essentially,  contradict  the
          allegations of all of the parties to this  proceeding;  and  that
          absent these registration cards, there would  be  no  doubt,  but
          that the maximum rent, dwelling space,  etc.  would  have  to  be
          fixed as of May 1, 1950.
          Nevertheless,  the  existence  of  these  two  cards   makes   it
          impossible to determine, based on this record,  the  date  as  of
          which the maximum legal rent is to be fixed.
           

          Therefore, the Commissioner finds that this  proceeding  must  be
          remanded  to  the  Administrator  for   the   sole   purpose   of
          reconsidering that portion of the appealed order which fixed  the
          maximum rent and determined  the  dwelling  space  and  essential
          services, furniture and furnishings and equipment.






          Admin. Review Docket Nos.: EB 120364 RO and EC 120559 RT
                                 

          THEREFORE,  pursuant  to  all  of  the  applicable  statutes  and
          regulations, it is

          ORDERED, that the owner's Petition be, and  the  same  hereby  is
          denied and that the tenant's Petition be and the same  hereby  is
          granted  to  the  extent  of  remanding  the  proceeding  to  the
          Administrator  for  the  sole  purpose   of   reconsidering,   in
          accordance with this order  and  opinion,  that  portion  of  the
          appealed order  which fixed the maximum rent and  determined  the
          dwelling space and essential services, furniture and  furnishings
          and equipment; and it is further


          ORDERED, that, insofar as the appealed order determined that  the
          subject apartment is subject to regulation under  the  City  Rent
          Law, the same be and it hereby is affirmed; and it is further


          ORDERED,  that  the  automatic   stay   of   so   much   of   the
          Administrator's order as may be construed as a direction  to  pay
          arrears and/or overcharges is hereby continued until a new  order
          is issued upon remand. However, the Administrator's determination 
          as to the rent is not stayed and shall remain in  effect,  except
          for any adjustments which may be  otherwise  obtained  under  the
          City Rent Law and/or the Rent and Eviction Regulations, until the 
          Administrator issues a new order upon remand.


          ISSUED:




                                                             
                                     JOSEPH A D'AGOSTA
                                     Acting Deputy Commissioner
    

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