EF 410150 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
APPEALS OF DOCKET NO.: EF 410150 RO
THE ESTATE OF
B.J. HORNUNG DRO DOCKET NOS.: BK 410059 RP
AND L 3111445 R
TENANT: BRUCE COLVILLE
ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
On June 20, 1990 and on June 25, 1990, the above-named petitioners
each filed a Petition for Administrative Review against an order
issued on May 22, 1990 by the Rent Administrator, 92-31 Union Hall
Street, Jamaica, New York concerning the housing accommodations
known as Apartment 6, 315 West 90th Street, New York wherein the
Rent Administrator determined that an overcharge had occurred and
directed the owner to roll back the rent and to refund the
overcharge. These petitions have been consolidated under docket
number EF 410150 RO.
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 record relevant to the
issues raised by the administrative appeals.
The tenant commenced this proceeding on March 22, 1984 by filing a
complaint of rent overcharge, alleging in pertinent part that the
owner wouldn't give a lease and had raised the rent periodically
without reason. The complainant had commenced occupancy initially
of one unit (#8) in April 1978 and subsequently had rented two
additional units (#7 and #6).
EF 410150 RO
In answer to the tenant's complaint, the prior owner responded that
the subject premises was a "class B" multiple dwelling and as such
was not subject to the Rent Stabilization Law until July 1981.
Therefore, the owner was not required to maintain rent records
prior to the time the law was applicable. The prior owner
submitted rooming house statements which had been filed with the
New York City Department of Rent and Rehabilitation in which the
premises had been classified as "HCB" (hither to converted B unit
prior to 1929). Submitted also were rent ledgers showing some
weekly and monthly rents. Although the submissions represented a
complete rental history for unit # 8, the rental history for unit
# 7 was incomplete.
The owner's representative stated that the incompleteness of the
rental history resulted from the owner's diminished memory caused
by Alzheimer's disease.
The tenant disputed the owner's assertions regarding the
classification of the subject property and asserted that the
building always had been an apartment building with eight distinct
apartments tenanted by permanent tenants. Moreover, in two
previous cases, the Administrator had determined that the subject
premises was not a rooming house but was a "class A" dwelling.
Therefore, the tenant concluded, the Administrator should make a
similar determination with respect to his claim.
In the order issued on May 22, 1990, in conformity with the
determination made in Docket No. ZL 3117364-R (Apartment 3, 315
West 90th Street), the Administrator rejected the owner's
contention that the subject building was a "Class B" multiple
dwelling, and because the majority of the dwelling units were
"Class A" dwelling units on the base date of May 31, 1968,
determined that the premises was a "Class A" multiple dwelling
subject to the Rent Stabilization Law. The Administrator noted
that the complainant was renting three units, numbers 6, 7, and 8,
combined to create one unit known as apartment no. 6. To establish
a legal stabilization rent, the Administrator combined the rent
collected for unit 8 with an established rent for unit 7 using
Section 42A default procedures for unit # 7. It was noted that
unit 6, a sleeping room totaling 534 cubic feet was added without
additional rent in November 1982. Based on the foregoing, the
Administrator established the legal stabilization rent at $602.49
for the period November 1, 1988 through October 31, 1990, and
directed the owners to refund $19,683.80 inclusive of excess
security and treble damages on the overcharge collected on or after
April 1, 1984.
In its appeal, the prior owner reiterates that as a "Class B"
rooming house, the subject building was not subject to Rent
Stabilization prior to July 1981. Therefore, the owner argues, the
Administrator erred in requiring a rental history prior to this
EF 410150 RO
date. Additionally, the owner contends that the position adopted
by the Administrator is arbitrary and capricious in that it is
supported by only the tenant's unsubstantiated statements and a
prior erroneous finding which was also being challenged. The use
of July 1981 as the initial base date would negate the application
of default procedures with the consequent finding of an overcharge.
Moreover, as alleged by the owner, the prior owner's Alzheimer's-
caused diminished memory made use of the default formula and
imposition of treble damages inappropriate. Furthermore, the
Administrator incorrectly established May 1982 as a base date after
units # 7 and # 8 were combined. The former owner alleges that
alterations combining the two units were completed in May 1983.
Accordingly, a new first rent not subject to challenge should be
permitted as of May 1983. For the foregoing reasons, the owner
requests recomputation of the rent using July 1981 and May 1983 as
base rent dates and a modification of the Administrator's order
with a finding that no overcharge exists.
The current owner joins in the appeal and contends that the subject
premises is a "Class B" multiple dwelling which, until February
1987, contained five "Class A" dwelling units and five "Class B"
dwelling units. In February 1987, the current owner undertook to
enclose the public bathroom, which had been shared by units # 6,
# 7 and 8, within # 8. Until that time, the units rented by the
complainant did not have a private bath. Because the three units
were not physically joined, the current owner continued to register
each unit separately. The current owner requests that the
Administrator's order be reversed.
The tenant contends that the owner's arguments have been
consistently repudiated in near identical cases in the same
building wherein it was determined that the premises is clearly
within the definition of a "Class A" dwelling and is subject to
Rent Stabilization. The tenant asserts that May 1982 is the
correct date for the establishment of the initial legal regulated
rent for the combined apartment because he began paying rent for
units 7 and 8 at that time.
The Commissioner is of the opinion that these petitions should be
The owners herein have not established that the subject building is
a rooming house or Class B multiple dwelling which first became
subject to the Rent Stabilization Law in July 1981, entitled
thereby to a base rent date of July 1981. Section 4 of the New
York Multiple Dwelling Law defines a Class A multiple dwelling as
a multiple dwelling which is occupied, as a rule, for permanent
residence purposes and which contains at least one bathroom. A
Class B multiple dwelling is defined as a multiple dwelling which
is occupied, as a rule, transiently and includes hotels and rooming
houses. The Multiple Dwelling Law further provides that a building
may contain both Class A and Class B units. If the majority of the
EF 410150 RO
units are Class A, then the entire building is classified as a
Class A multiple dwelling.
Among the documents submitted by the owner to support the claimed
1) a rooming house statement filed with the New
York City Department of Buildings in September
2) a 1962 operator's re-registration statement on
Registered Rooming Houses in which the
premises is classified as "HCB"; and
3) an illegible Certificate of Occupancy from
October 1936 which indicates that the premises
is a residence.
This documentation is not current, may not present an accurate
portrayal of the building's actual status and may not be reflective
of any subsequent alterations. Further items (1) and (2) were
prepared by the owner. The Commissioner notes that the owner did
not register the premises with "METHISA" as was required by law for
the owner's asserted building classification. Moreover, a
building-wide inspection was conducted on September 14, 1987 by a
staff member of the Division of Housing and Community Renewal
(DHCR) who reported that the building contained eight units, six of
which had individual kitchens and bathrooms. Accordingly, the
Commissioner finds that the Administrator did not err in treating
the subject building as a Class A multiple dwelling.
Contrary to the former owner's interpretation, the Administrator
did not determine that the owner was entitled to a first rent for
the combined unit. The Administrator correctly combined the rent
being paid for each unit to establish the total rent being paid as
of May 1982, the date the tenant began to rent both units # 7 and
# 8 . The joining of units # 7 and # 8 by the installation of a
common door, which the owner claims was installed by the tenant, in
a building incorrectly treated by the owner as a Class B Multiple
Dwelling does not meet the requirements of substantial
rehabilitation necessary for a first rent not subject to challenge.
Accordingly, the Rent Administrator correctly determined that the
subject premises was a Class A Multiple Dwelling and that
accordingly the owner was required to submit a complete rental
history for units 7 and 8 from the June 30, 1974 base date pursuant
to Section 42A of the Rent Stabilization Code. Since the owner did
not do so with respect to unit 7, the application of the 42A
default procedures with respect to unit 7 was warranted.
Despite repeated assertions that the former owner suffered from
Alzheimer's Disease, these assertions are merely non-medical
EF 410150 RO
opinions. The record contains no medical evidence attesting to the
prior owner's mental or physical condition which would overcome the
presumption of willfulness. Therefore, the Commissioner finds the
Administrator properly imposed treble damages on the overcharges.
The current owner Nicholas Gobers is responsible for all
overcharges collected during the period said owner owned the
subject premises and overcharges collected by the prior owner
Estate of B. J. Hornung on or after April 1, 1984 or $18,155.94.
Ownership of the subject building was transferred during the period
the tenant was in occupancy and overcharged. For overcharges
collected prior to April 1, 1984, the prior owner Estate of B. J.
Hornung will be held responsible for its portion of the overcharge
This order is issued without prejudice to the tenant's right to
commence an action in a court of competent jurisdiction in the
event the prior owner fails to refund overcharges as required by
This order may, upon the expiration of the period in which the
owners may institute a proceeding pursuant to Article Seventy-Eight
of the Civil Practice Law and Rules, be filed and enforced by the
tenant in the same manner as a judgment or not in excess of twenty
percent thereof per month of the current owner's overcharge -
$18,155.94 may be offset against any rent thereafter due the owner.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
ORDERED, that there petition be, and the same hereby are, denied,
that the Rent Administrator's order be, and the same hereby is,
affirmed and that the Notice and Order of Stay of the Rent
Administrator's order issued on July 17, 1990 be, and the same
hereby is, vacated and set aside.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner