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                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                             JAMAICA, NEW YORK    11433

          ----------------------------------X   S.J.R. 5684
          APPEAL OF                             DOCKET NO.: EI 210108 RT
                   JOE DOMINGUEZ,
                                                D.R.O. DOCKET NO.: ZBJ 210452-R



          On September 19, 1990, the above named petitioner-tenant filed  a
          Petition for Administrative Review against  an  order  issued  on
          August 24, 1990, by the District Rent Administrator, 92-31  Union
          Hall Street, Jamaica, New York, concerning housing accommodations 
          known as Apartment 2R, 409 Seventh Avenue,  Brooklyn,  New  York,
          wherein the  District  Rent  Administrator  determined  that  the
          owner had overcharged the tenant.

          The  issue  in  this  appeal  is  whether   the   District   Rent
          Administrator's order was warranted.

          The applicable sections of the law are  Sections  2522.4,  2526.1
          and 2528.4 of the Rent Stabilization Code.

          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 commenced on October 27, 1987 by the tenant's 
          filing  of  a  rent  overcharge  complaint  wherein  the   tenant
          contended in substance that the prior tenant was  rent-controlled
          and paid a monthly rent of $125.00; that the subject premises was 
          an eight-family building, but that two of the apartments had 
          been converted to a laundromat; that the  subject  apartment  was
          unlawfully reduced from four rooms to two rooms; and that he  was
          being  grossly  overcharged.   The  tenant  also  complained   of
          several defective conditions in the subject apartment.

          The tenant subsequently informed  the  Division  of  Housing  and
          Community Renewal (DHCR) of the following:  from August  1987  to
          December 1987 he paid a monthly rent of $500.00  for  a  two-room
          apartment despite the fact that he was given a two-year lease for 
          the period of August 1, 1987 through July 31, 1989 at  a  monthly
          rent of $398.00; from August 1987 through December 1987 he  lived
          in a two-room apartment  and  was  not  aware  that  the  subject
          apartment was previously a four-room  apartment;  on  January  4,
          1988 the owner had a wall in the subject apartment  knocked  down
          so that the subject apartment became a  four-room  apartment;  on

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          July 25, 1987 the owner  hired  the  tenant  as  manager  of  the
          laundromat which was being constructed on the first floor of  the
          subject building; the tenant was also hired as a part-time  super
          for the subject building; the tenant earned $5.00 per hour as  an
          employee of the owner and the rent was satisfied from his  wages;
          on December 24, 1987 he resigned as the  building  superintendent
          and laundromat manager; for the months of January,  February  and
          part of March of 1988 the tenant instructed the owner to take the 
          rent out of a $1,000.00 bond which the tenant had  given  to  the
          owner pursuant to a prior business relationship  which  they  had
          concerning the laundromat; the owner refused  his  rent  payments
          since March of 1988; the owner did not  register  with  DHCR  the
          tenant's initial two year lease and instead improperly registered 
          the subject apartment as  "exempt"  in  1988;  his  monthly  rent
          should be limited to $241.82, the prior tenant's rent, due to the 
          improper registration of the subject apartment; and  no  services
          or repairs were ever provided by the owner other than pursuant to 
          court  order.   In  support  of  these  contentions,  the  tenant
          submitted copies of receipts stating that the rent was  satisfied
          for the months of August through December of 1987; a breakdown of 
          the number of hours worked by month as an employee of the  owner;
          receipts for rent for the months of January, February and part of 
          March 1988 paid out of an escrow account; a lease for the  period
          from August 1, 1987 through July 31, 1989; a letter dated January 
          8, 1988 from the owner to  the  tenant  confirming  the  tenant's
          resignations; several Housing  Court  orders  pertaining  to  the
          subject apartment; and two Small Claims Court  judgments  awarded
          to the tenants.

          In his answer to the tenant's complaint, the owner  contended  in
          substance that the tenant was hired as the superintendent and was 
          give a rent-free apartment and a  salary;  the  tenant  was  also
          given other duties in a laundromat which was being  built;  since
          the tenant resigned as an employee of the  landlord  on  December
          25, 1987, he had not paid rent for 1988, 1989 and 1990; the prior 
          tenant's lease of September 1, 1986 through August 31, 1988 at  a
          monthly rental of $260.25 had been misplaced and once found,  the
          owner submitted an amended registration for the subject apartment 
          for 1987; in 1988 the  subject  apartment  was  registered  as  a
          superintendent's apartment; in 1989 the apartment wasn't included 
          on the registration work sheets which he received from the R.S.A. 
          due to its exempt status the previous year; a  new  refrigerator,
          new stove, new bathroom and new windows were all installed in the 
          subject apartment while it was vacant and prior to the  occupancy
          of the complaining tenant; the tenant and his wife  were  awarded
          $500.00 in disputed wages by the  Small  Claims  Court;  and  the
          tenant was not overcharged because he never paid  any  rent.   In
          support of these contentions, the owner submitted copies  of  the
          prior tenant's leases for  the  period  from  September  1,  1984
          through August 31, 1988; an amended  registration  for  1987;  an
          accepted contract proposal dated March 12, 1987 involving repairs 
          to the bathroom and the replacement of  windows  in  the  subject
          apartment;  paid  receipts  dated   July   27,   1987   for   the
          installations of a new stove  and  refrigerator  in  the  subject
          apartment; and a 1989 Annual Registration Summary for the subject 

          In Docket Number ZBJ 210452-R dated August 24, 1990, the District 
          Rent  Administrator  determined  that   the   tenant   had   been

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          overcharged $1,598.94  which  included  treble  damages  for  the
          period from August 1, 1987 through February 28, 1988.

          In this petition, the  tenant  contends  in  substance  that  the
          District Rent Administrator's order is incorrect  and  should  be
          reversed because:

               1)   DHCR arbitrarily  determined  that  the  tenant
                    only paid a monthly rent of $398.00 in 1987;

               2)   the tenant  paid  a  monthly  rent  of  $500.00
                    from August 1, 1987 through December  31,  1987
                    which was deducted from his wages;

               3)   the owner failed to file a  proper  and  timely
                    apartment  registration  for  1987   and   also
                    failed to provide the tenant  with  a  copy  of
                    the registration;

               4)   in 1988 the owner  incorrectly  registered  the
                    subject  apartment  as   "exempt-owner/employee
                    occupied" and  failed  to  provide  the  tenant
                    with a copy of the registration;

               5)   in  1989  the  owner  failed  to  register  the
                    subject apartment;

               6)   in 1990 an incorrect rental amount  was  listed
                    on the apartment registration;

               7)   the owner is  subject  to  the  rent  reduction
                    order issued by DHCR on November 10, 1988;

               8)   the rent should remain at  the  1986  level  of
                    $240.75 and no increases should be  granted  to
                    the  owner  due  to  the  faulty  registrations
                    filed by the owner;

               9)   for the period  from  August  1,  1987  through
                    March 15, 1988,  the  owner  should  only  have
                    been  allowed  to  collect  50%  of  the   rent
                    because during  that  period  the  tenant  only
                    had use  of  two  of  the  four  rooms  of  the
                    subject apartment;

              10)   the DHCR inspection of the  subject  apartment
                    to determine if two  of  the  rooms  had  been
                    sealed  off  occurred  after  the   wall   was
                    removed; and

              11)   the owner was not entitled to  rent  increases
                    for the  new  kitchen  equipment  because  the
                    owner submitted false bills, the  tenants  did
                    not consent to the  installation  of  the  new
                    equipment, the appliances were replaced  after
                    the  tenants  commenced   occupancy   of   the
                    subject apartment  and  these  rent  increases
                    were not made part  of  the  tenants'  initial

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          The owner did not submit a response to the tenant's petition.

          The Commissioner is of the opinion that this petition  should  be

          With regard to the tenant's contentions that the  owner  was  not
          entitled to rent increases for the installation  of  new  kitchen
          appliances  because  the  owner  submitted   false   bills,   the
          appliances were replaced after the tenants commenced occupancy of 
          the subject  apartment,  the  tenants  did  not  consent  to  the
          installations, and these rent increases were not made part of the 
          tenants' initial lease, the Commissioner notes  that  the  tenant
          has not submitted any evidence to support these bare allegations. 
          Furthermore, these issues were  raised  for  the  first  time  on
          appeal, and thus may not be  considered  at  this  stage  of  the
          proceeding as this is not a de novo proceeding.

          With regard to the tenant's contention that for the  period  from
          August 1, 1987 through March 15, 1988 the owner should only  have
          been permitted to collect 50% of the lawful rent due to the  fact
          that the tenant only had use of two of  the  four  rooms  of  the
          subject apartment, the Commissioner notes that this contention of 
          the tenant  was  fully  investigated  in  a  separate  proceeding
          initiated by the tenant under Docket Number BL 210478-S  and  was
          not confirmed despite an inspection  of  the  subject  apartment.
          Furthermore,  the   tenant   appealed   this   finding   of   the
          Administrator (CL 210030 RT) and his appeal  was  denied  by  the
          Commissioner   on   January   18,   1991.     Accordingly,    the
          Commissioner's order constituted the final determination  of  the
          rent agency with regard to the issues decided in that proceeding, 
          and the tenant may not now raise those  same  issues  by  way  of
          collateral attack in  the  instant  rent  overcharge  proceeding.
          Thus, the tenant's argument concerning being deprived of the  use
          of two of the four rooms of the subject apartment from August  1,
          1987 to March 15, 1988 will not be considered as it is barred  by
          the principles of res judicata and collateral estoppel.

          With  regard  to  the  tenant's  contention  that  the  owner  is
          prohibited from increasing the rent because of the rent reduction 
          order issued by DHCR on November 10, 1988, the Commissioner notes 
          that the rent reduction order relied on  by  the  tenant  (Docket
          Number BL 210478-S) did  not  become  effective  until  March  1,
          1988, and thus has no bearing on the instant  proceeding  as  the
          Administrator's order only calculated  the  lawful  stabilization
          rents and amounts of overcharge up to February 28, 1988.

          With regard to the tenant's contention that for the  period  from
          August 1, 1987 through December 31, 1987 he paid a  monthly  rent
          of $500.00, the evidence of record indicates that the tenant  was
          given a rent-free apartment for the period from  August  1,  1987
          through December 24, 1987 while acting as the  superintendent  of
          the subject building, and was also paid $5.00 per hour  for  work
          relating to the construction  of  a  laundromat  in  the  subject
          building.  The  record  also  indicates  that  the  tenants  were

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          awarded two Small Claims Court judgments  against  the  owner  in
          August 1989 for wages withheld ($120.64 and $397.56).  The record 
          also  indicates  that  the  tenants  signed  a  two  year   lease
          commencing on August 1, 1987 at  a  monthly  rental  of  $398.00.
          Thus, the Commissioner rejects the tenant's  claim  of  paying  a
          monthly rent of $500.00  from August through  December  of  1987.
          The Commissioner notes that DHCR has absolutely  no  jurisdiction
          over a wage dispu e  between  an  owner-employer  and  a  tenant-
          employee, and advises the tenants to pursue an action in a  court
          of competent jurisdiction for withheld wages as they successfully 
          did in 1989.

          Section 2528.4 of the Rent Stabilization Code states as follows:

               The failure to  properly  and  timely  comply  with  the
               initial or annual rent registration as required by  this
               Part shall, until such  time  as  such  registration  is
               completed, bar an owner from applying for or  collecting
               any rent in excess of:

               a)   if no initial  registration  has  taken  place,
                    the legal  regulated  rent  in  effect  on  the
                    date  that  the  housing  accommodation  became
                    subject  to  the  registration  requirement  of
                    this Part; or

               b)   the legal regulated rent  in  effect  on  April
                    first  of  the  year  for   which   an   annual
                    registration  was  required  to  be  filed,  or
                    such  other  date  of  that  year  as  may   be
                    determined by  the  DHCR  pursuant  to  section
                    2528.3  of  this  Part   (Annual   Registration

               The late filing of a registration shall  result  in  the
               elimination, prospectively, of such penalty.

          The evidence of record in the instant case discloses  that  prior
          to the issuance of the Administrator's order the owner  submitted
          to DHCR an amended apartment registration for 1987  stating  that
          the subject apartment was vacant and the rent was  $260.25.   The
          owner also submitted the prior tenant's last lease to support the 
          above-mentioned   amended   registration.     Accordingly,    the
          Commissioner accepts this amended registration.  With  regard  to
          the tenant's contentions that the owner failed to  file  properly
          apartment registrations for the years 1988, 1989, and  1990,  the
          Commissioner  notes   that   the   Administrator's   order   only
          calculated  the  lawful  stabilization  rents  and   amounts   of
          overcharge up to  February  28,  1988.   Therefore,  the  alleged
          improper registrations from 1988 through 1990 have no  effect  on
          the order being appealed herein.

          The  Commissioner  finds   that   the   Administrator   correctly
          calculated the tenant's  lawful  stabilization  rent  as  $321.86
          (16.5% increase over the prior tenant's legal registered rent  of
          $260.25 pursuant to Rent Guidelines Board Order  Number  18  plus
          $18.67  -  1/40th  of  the  cost  for  the  installation  of  new
          appliances).  The Commissioner warns the owner that  he  may  not

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          increase the tenant's rent pursuant to Section 2528.4 of the Rent 
          Stabilization Code until the owner properly registers the subject 
          apartment for the years 1988, 1989 and 1990.   Additionally,  the
          owner may not raise the tenant's rent above the level established 
          in the Administrator's order until an order is  issued  restoring
          the rent.

          Finally, the Commissioner finds that the Administrator  erred  in
          determining that the tenant  had  been  overcharged  from  August
          through December of 1987 as the  tenant  was  given  a  rent-free
          apartment  during  that  period  while  he  acted   as   building
          superintendent.  However, in the absence of a timely petition for 
          administrative review by the owner,  the  Commissioner  finds  it
          appropriate  to  affirm  the   overcharge   penalty   ($1,598.94)
          determined by the Administrator.

          Because this determination concerns lawful rents only through the 
          date of February 28, 1988 used in the Administrator's order being 
          appealed, the owner is cautioned to adjust subsequent rents to an 
          amount no greater than that determined by  this  order  plus  any
          lawful increases, and to register any  adjusted  rents  with  the
          Administrator's order 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 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  Rent  Stabilization  Law  and
          Code, it is

          ORDERED, that this petition be, and the same  hereby  is,  denied
          and that the District Rent Administrator's order be, and the same 
          hereby is, affirmed.


                                                  ELLIOT SANDER
                                                  Deputy Commissioner

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