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.: EH 810197-RO
DRO DOCKET NO.: SEB-8-1-0123-R
PETITIONER : TENANT: LISA JOHNSTONE
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On August 21, 1990, the above named petitioner-owner filed a timely
Petition for Administrative Review against an order issued on or about
August 9, 1990, by the Rent Administrator, 55 Church Street, White Plains,
New York, concerning housing accommodations known as Apartment B-8, 27
Union Road, Spring Valley, New York, wherein the Rent Administrator
determined that had been an overcharge and ordered a refund of $583.60,
including interest, and directed the owner to refund any security in
excess of one month's rent.
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 appeal.
The tenant commenced this proceeding on December 21, 1989 by filing an
overcharge complaint based in part on the allegation that the owner had
collected two months security. The tenant further alleged she moved into
the subject apartment on January 19, 1989 under a one year lease at a
rental of $560.00.
On February 15, 1990, the Administrator requested that the owner submit
leases for the complaining tenant, the last lease of the prior tenant,
and the lease upon which the vacancy factor was determined.
In response the owner submitted copies of certain leases for the
complaining tenant and the prior tenant, but did not submit the requested
leases upon which the vacancy factor had been based.
On March 20, 1990 the owner was requested to submit a copy of a lease for
a comparable apartment on which the vacancy factor was based and a copy of
the complaining tenant's vacancy lease. The owner was also requested to
describe the method it used to determine the tenant's vacancy rent.
In a response dated March 26, 1990, the owner stated that it had computed
the tenant's vacancy rent by starting with the November 1984-October 1985
rent of $470.00 and then successively applying rent increase of 7%,4%,3%
and 4.5% which were alleged to be allowed for 1984(sic),1985,1986, and
1987 respectively, yielding $562.95 which was rounded off to $560.00.
DOCKET NUMBER: EH 810197-RO
In addition, the owner alleged that the subject apartment was comparable
to apartment B-10 which was rented on May 12, 1987 for $550.00 under a one
year lease to expire April 30, 1988.
In the order herein under review the Administrator found that the owner
had improperly computed the tenant's rent. The Administrator stated that
because the prior tenant had vacated before his or her lease had expired,
the owner should have used the rent in the last prior full lease term as
the base rent for computing the complaining tenant's initial rent.
Accordingly, the Administrator used the $505.88 rent in the lease of the
prior tenant which expired on October 31, 1987 (rather than the two month
renewal thereof) as the base rent. To this the Administrator added a 5%
vacancy allowance and a 2 1/2% Guidelines increase, thereby determining
the lawful vacancy rent for the complaining tenant to be $543.82, rather
than the $560.00 actually charged.
Based thereon, the Administrator computed a $583.60 overcharge, with
In this petition the owner contends the Administrator's order is incorrect
and should be modified because the Administrator "fixed the instant rent
at $543.82 for reasons which were not clear." In particular, the owner
questions why the submitted comparable lease was not used by the
Administrator to determine the tenant's rent. In addition, the owner
alleges that fact that the prior lease had not been for a full lease term
should not have prevented its use by the Administrator to determine the
tenant's vacancy rent.
Finally, the owner alleges that it had submitted proof that the 1985
registered rent for the subject apartment was $470.00 and that lawful
Guidelines increases were then used to arrive at the $560.00 rent.
The tenant did not answer this petition, although given the opportunity to
The Commissioner is of the opinion that this petition should be denied.
The vacancy rent for a one year lease commencing between October 1, 1987
and September 30, 1988 in Rockland County was to be a 2 1/2% Guidelines
increase plus either the highest comparable rent or a 5% vacancy
allowance, whichever resulted in a lower rent. Accordingly, the
Administrator correctly did not use the comparable $550.00 lease.
Furthermore, the Administrator correctly did not use the two month
November, 1987-December,1987 renewal lease rent as the basis for computing
the complaining tenant's January 1988 initial rent. In the first place,
Division policy precludes the use of a lease in effect for three months or
less from being used to compute a subsequent lease rent. Secondly,
Section 2502.5(c)(6) of the Tenant Protection Regulations provides that in
the event a tenant vacates before the end of a lease term, in computing
the following rent the prior lease rent should be recomputed to be the
rent for a leasing having the duration of the actual occupancy. For
example the rent for a three year lease vacated after one year should be
recomputed to be the rent for a one year lease. Under this principle, a
one year lease vacated after two months should be considered a lease for
DOCKET NUMBER: EH 810197-RO
zero years in computing the subsequent lease rent, i.e., the rent of the
lease prior to the early-vacated lease should be used. The Administrator
correctly applied this principle to the situation herein where the lease
period was contemplated to be two months at the outset but where the owner
charged the rent applicable to a one year renewal lease.
Finally the owner's claim that it properly computed rents from the
November 1, 1984-October 31, 1985 rent of $470.00 is incorrect. The
Commissioner notes that of the four percentage increases cited by the
owner in its answer [7%(1984), 4%(1985), 3%(19986) and 4.5% (1987)] only
the 3% figure is correct for a one year lease renewal. It is these
incorrect figures that yield the $562.95 figure cited by the owner.
In fact, the leases show that the owner did use correct Guidelines
increases (4 1/2%, 3% 2 1/2%) when it actually computed the three renewal
leases for the prior tenant. The owner's error occurred when setting the
complaining tenant's initial lease, where the Administrator's method
should have been used.
This 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 tenant 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, in accordance with the Emergency Tenant Protection Act and
Regulations, it is
ORDERED, that this petition be, and the same hereby is, denied and the
Rent Administrator's order be, and the same hereby is, affirmed.