EC 110359 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 
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. EC 110359 RO

                                          :  DISTRICT RENT OFFICE
           Nathan Katz Realty Co.,           DOCKET NO. ZCH 110446 R
                                            
                                             TENANT: Eustoquia Torres         
                                                     Nogueras

                            PETITIONER    : 
      ------------------------------------X                             

           ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


      On March 8, 1990, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on February 8, 1990, by 
      the Rent Administrator, Gertz Plaza, 92-31 Union Hall Street, Jamaica, 
      New York, concerning the housing accommodations known as 32-06 47th 
      Street, Astoria, New York, Apartment No. 1I, wherein the Rent 
      Administrator determined that the owner had overcharged the tenant.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Section 2526.1 of the Rent Stabilization Code.

      The issue herein is whether the Rent Administrator's order was 
      warranted.

      The Commissioner has reviewed all of the evidence in the record and has 
      carefully considered that portion of the record relevant to the issue 
      raised by the administrative appeal.  

      This proceeding was originally commenced by the filing in August 1989 of 
      a rent overcharge complaint by the tenant who stated in substance that 
      the rent should be about $400.00 and that $625.00 was too high.

      In answer to the complaint, the owner stated in substance that increases 
      for new equipment in January 1985 and March 1986 should be added to the 
      lease rents.  The owner submitted copies of bills and cancelled checks 
      for $950.71 dated in January 1985 and $335.52 dated in March 1986 plus 
      leases in effect from January 1, 1985.

      In Order Number ZCH 110446 R, the Rent Administrator established the 
      lawful stabilized rent as $438.34 effective January 1, 1990, determined 
      that the tenant had been overcharged and directed a refund to the tenant 
      of $17,940.15 including treble damages on overcharges collected on and 
      after April 1, 1984.


      In this petition, the owner contends in substance that treble damages 
      are not warranted because the owner reduced the tenant's rent in 







          EC 110359 RO

      December 1989 prior to the issuance of the order in accordance with the 
      Rent Administrator's Notice of Intent to impose treble damages; the 
      overcharge was not willful but the result of hypotechnical errors of 
      "piggybacking" in March 1, 1986 and collecting an erroneous vacancy 
      allowance in January 1, 1987 as well as in March 1, 1986 and that 
      imposing treble damages contravenes DHCR Policy Statement 89-2.

      In answer to the owner's petition, the tenant stated in substance that
      the owner has never refunded the overcharge of excess rent or security 
      although the rent was reduced and therefore treble damages are 
      warranted.

      The Commissioner is of the opinion that this petition should be denied.

      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 a 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, 1984.

      An examination of the record in this case discloses that the initial 
      registered rent charge to the stabilized tenant on April 1, 1984 was 
      $202.04 and that the owner was unable to substantiate the increase in 
      rent to $425.00 on January 1, 1985 and that the ensuing overcharge was 
      primarily the results of the compounding of this original error.

      Although the owner is correct that the subsequent hypotechnical error 
      due to piggybacking occurred it was not a significant factor in the 
      cumulative overcharge collected from the complainant.  In addition, the 
      subsequent error of collecting an additional vacancy allowance on 
      January 1, 1987 under Guidelines 18 to which the owner was not entitled, 
      is not considered a hypertechnical error not warranting the imposition 
      of treble damages.

      Further, the Commissioner rejects the owner's contention that the 
      reduction of the tenants rent in December 1989 is sufficient evidence 
      that the overcharge was not willful.

      DHCR Policy Statement 89-2 on Treble Damages states in pertinent part 
      that where the owner both adjusts the rent and tenders a full refund to 
      the tenant prior to the time afforded to interpose an answer to the 
      proceeding, then the burden of proof in establishing lack of willfulness 
      shall be deemed to have been met.

      In the instant case, it is apparent from both the Owner's and tenant's 
      submission that no refund of the overcharge was made and therefore the 
      owner has not established lack of willfulness as defined in DHCR Policy 
      Statement 89-2.


      Accordingly, the imposition of treble damages was warranted.

      Because this determination concerns lawful rents only through           


          EC 110359 RO

      November 30, 1989, the owner is cautioned to adjust subsequent rents to 
      an amount no greater than that determined by the Rent Administrator's 
      order plus any lawful increases, and to register any adjusted rents with  
      this order and opinion being given as the explanation for the 
      adjustment.

      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 in the same manner as a judgment 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 provisions of the Rent Stabilization 
      Law and Code, it is

      ORDERED, that this petition for administrative review be, and the same 
      hereby is, denied, and, that the order of the Rent Administrator be, and 
      the same hereby is, affirmed.



      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner




                 
































          EC 110359 RO






    

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