EB 410004 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                            DOCKET NO.: EB 410004 RO

               Murray Cooper                   DISTRICT RENT ADMINISTRATOR
               (Wonforo Associates),           DOCKET NO.: L-3115008 R/T
                                               Tenants: Lawrence Mentz and
                                                        Barbara A. Mentz


          On January 30, 1990, the above  named  petitioner-owner  filed  a
          Petition  for  Administrative  Review  against  an  order  issued
          December 28, 1989, by the  Rent  Administrator  at  Gertz  Plaza,
          Jamaica, New York, concerning  housing  accommodations  known  as
          apartment number 2B at 140 West 86th Street, New York, New  York,
          wherein the Administrator established  the  stabilized  rent  and
          directed the owner to refund $2,350.59, including treble  damages
          from April 1, 1984.

          The Commissioner notes that this proceeding was  initiated  prior
          to April 1, 1984.  Sections 2526.1(a)(4)  and  2521.1(d)  of  the
          Rent Stabilization Code (effective May 1,  1987)  governing  rent
          overcharge  and  fair  market  rent  proceedings   provide   that
          determination of these matters be based  upon  the  law  or  code
          provisions in  effect  on  March  31,  1984.   Therefore,  unless
          otherwise  indicated,  reference  to   sections   of   the   Rent
          Stabilization Code (Code) contained herein are  to  the  Code  in
          effect on April 30, 1987.

          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 March  13,  1984,  by
          the filing of a Fair Market Rent Appeal (FMRA) and a complaint of 
          rent overcharge (both of  which  were  assigned  the  same  above
          referenced docket number: L-3115008 R/T) with the New  York  City
          Conciliation and Appeals Board (CAB, the agency formerly  charged
          with enforcing the Rent Stabilization Law) by  the  tenants.   On
          September 19, 1984, the tenants timely filed an Objection to  the
          initial registration statement  filed  by  the  owner.   In  that
          Objection, the tenants indicated that they were asserting both an 
          overcharge complaint and a FMRA  as  to  the  initial  registered
          rent.  Docket #030624 was assigned to that Objection and by order 
          issued June 17, 1986, said Objection was merged into the  instant
          FMRA and overcharge proceedings.

          The owner submitted neither a complete rental  history  from  the
          base date nor evidence of comparable rents.

          EB 410004 RO
          In  the  appealed  order,  the  Administrator  noted   that   the
          Division's records did  not  indicate  an  MBR  for  the  subject
          apartment.  Therefore, the calculation of the  Fair  Market  rent
          was  accomplished  using  the  average  rent  control  rent   for
          comparable sized housing accommodations in the  subject  building
          as recorded on the 1984 Initial Rent  Registration  Data  as  the
          maximum rent and than applying  the  Special  Guidelines  #6B  to
          arrive at the fair market rent under the tenants'  vacancy  lease
          (December 15, 1975 to June  30,  1978);  that  is  $508.63.   The
          Administrator denied the FMRA, as the law requires,  because  the
          rent charged and  paid  was  less  than  the  fair  market  rent.
          Nevertheless, the Administrator found that, commencing  with  the
          tenants' July 1, 1981 through June 30, 1984  renewal  lease,  the
          owner had overcharged the tenants a total of  $971.14  (of  which
          $681.40 had been collected on or after  April  1,  1984)  through
          December 31, 1989.  Imposing  treble damages thereon  and  adding
          excess security to the result,  the  Administrator  directed  the
          owner to refund $2,350.59 to the tenants.

          In its Petition,  the  owner,  in  substance,  asserts  that  the
          overcharge found resulted, for the most part,  from  the  owner's
          inclusion of  the  Guidelines  "10b,  10c  and  10d,  etc."  fuel
          adjustments in the base rent when the rent under the July 1, 1981 
          to June 31, 1984 lease was calculated.  The owner further asserts 
          that this was an innocent error and, therefore, the imposition of 
          treble damages was inappropriate.  The owner  also  asserts  that
          the owner should have received a credit based on  the  fact  that
          under both the tenants' vacancy lease  and  their  first  renewal
          lease, the owner charged them  less  rent  than  it  was  legally
          entitled to.  The owner claims that  if  it  were  given  such  a
          credit, it would be  determined  that  no  monies  were  due  the

          The tenants' answer in opposition  to  the  petition  states,  in
          substance, that the petition was not timely filed  and  that  the
          Petitioner herein,who is an experienced real estate  professional
          knew it was incorrectly calculating their  rent.   Moreover,  the
          tenants assert, the owner's persistent  failure  to  fulfill  its
          duties under the law, except when compelled  to  do  so  in  DHCR
          proceedings, bespeaks of an attitude on the  part  of  the  owner
          which is consistent with a  finding  that  the  overcharges  were

          The Commissioner is of the opinion that the  petition  should  be

          The Commissioner finds that the owner is not entitled, under  the
          law, to  any  credit  for  its  purported  undercharging  of  the
          tenants.  The general rule, which is applicable hereto,  is  well
          established: if the rent charged and collected is less  than  the
          maximum an owner could have charged, that lesser sum becomes  the
          legal rent and the base rent for  calculating  all  future  legal

          The Commissioner also finds that the fact  that  the  overcharges
          were the result  of  the  owner's  retention  of  temporary  fuel
          adjustments  in  the  base  rent  used  to  calculate  subsequent
          Guidelines increases does not tend to rebut  the  presumption  of
          willfulness.   The  guidelines  orders  providing  for  the  fuel

          EB 410004 RO
          surcharges specifically state that these  charges  are  temporary
          and do not become  part  of  the  base  rent.   Given  the  clear
          language  of  the  guidelines,  the  owner's  collection  of   an
          overcharge is willful.  Therefore, the  Commissioner  finds  that
          the imposition of treble damages was appropriate herein.

          The Commissioner notes that the owner's  agent  for  mailing  the
          petition herein has submitted credible documentary evidence  that
          indicates that the petition was mailed to the Division on January 
          30, 1990.  The Commissioner therefore finds that the petition was 
          timely filed.

          The Commissioner also notes that the Administrator's  order  may,
          upon the  expiration  of  the  period  in  which  the  owner  may
          institute a proceeding pursuant to Article Seventy-eight  of  the
          Civil Practice Law and  Rules,  be  filed  and  enforced  by  the
          tenants in the same manner as a judgment  or  not  in  excess  of
          twenty percent thereof per month may be offset against  any  rent
          thereafter due the owner.

          THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

          ORDERED, that this petition be, and the same hereby  is,  denied;
          and that the Administrator's order be, and  the  same  hereby  is


                                                       ELLIOT SANDER
                                                       Deputy Commissioner

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