EF 410150 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     
          APPEALS OF                              DOCKET NO.:  EF 410150 RO
                     THE ESTATE OF
                     B.J. HORNUNG                  DRO DOCKET NOS.: BK 410059 RP
                        AND                                        L 3111445 R
                    NICHOLAS GOBERS,             
                                                  TENANT:  BRUCE COLVILLE
                                PETITIONERS
          ----------------------------------X                                   


            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 
          denied.

          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 
          classification are:

               1)   a rooming house statement filed with the New 
                    York City Department of Buildings in September 
                    1956;

               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 
          or $1,527.36.

          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.

          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, 
          it is

          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.

          ISSUED:

                                                  ------------------------
                                                  JOSEPH A. D'AGOSTA
                                                  Acting Deputy Commissioner
           
             
                                             






    

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