EC 110359 RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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
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
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
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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
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
Accordingly, the imposition of treble damages was warranted.
Because this determination concerns lawful rents only through
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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
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.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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