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.:
DISTRICT RENT ADMIN.
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On September 7, 1990, the above named petitioner-owner, filed a
Petition for Administrative Review against an order issued on
August 22, 1990, by a Rent Administrator concerning housing
accommodations, known as Apartment 8 at 328 West 89th Street, New
York, New York, wherein the Rent Administrator determined that
the subtenant had been overcharged, and that such overcharges
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 of a rent
overcharge complaint by the subtenant on February 2, 1988.
The subtenant had taken occupancy on September 1, 1986 at the
commencement of the second-year of the primary tenant's two-year
lease. The primary tenant's lease ran from September, 1985
through August 1987, at a rent of $500.12. The subtenant paid
$537.63 from September 1986 through the end of the lease. The
subsequent two-year lease, commencing in September 1987 was for
a monthly rental of $583.29.
On September 11, 1987, immediately after the execution of the
lease, the District Rent Administrator issued Order Number
L-3115177-R, based on the overcharge complaint previously filed
by the primary tenant. The order directed a refund of $2,217.87,
to the primary tenant and adjusted the legal rent to $424.31
through the lease term ending on August 31, 1985. This order
did not impose treble damages.
On March 15, 1988, the owner answered the subtenant's complaint,
stating therein that it had sent a full refund for the over-
charges determined for the primary tenant on October 23, 1987;
and that, on January 29, 1988, it had sent the subtenant a
corrected rent schedule for the period the subtenant had been
overcharged based on the legal rent in the Order of September
On August 22, 1990, the District Rent Administrator issued Order
Number CB-410121-R, in which it was determined that the subtenant
had been overcharged for the period from September 1, 1986
through August 31, 1989 in the amount of $1,586.88. The order
also stated that the evidence indicated that the overcharge was
willful and, as a result, treble damages would be imposed. The
total amount of overcharges was thus increased to $4,760.64. The
legal registered rent was determined as $538.82 for the lease
term ending on August 31, 1989.
In its petition dated September 7, 1990, the owner contends that
the Administrator's order was improper in that it had already
refunded the overcharges before the subtenant filed the com-
plaint, as was documented in its answer of March 15, 1988. Fur-
thermore, the owner contends that the determination that the
overcharges had been willful is totally refuted by the facts in
the record. The petition also proposes a revised calculation of
the legal rent in which the rent for the 9/1/86 lease is $497.17
instead of $494.33, and the rent for the 9/1/87 lease is $541.91
instead of $538.82.
The Commissioner is of the opinion that this petition should be
granted in part.
Section 2525.6(e) of the current Rent Stabilization Code provides
that, upon the consent of the owner to a sublet or an assignment
of any lease, the legal regulated rent payable to the owner
effective upon the date of subletting or assignment may be
increased by the vacancy allowance, if any, provided in the Rent
Guidelines Board Order in effect at the time of the commencement
date of the lease, provided the lease is a renewal lease. Such
increase in the case of an assignment shall remain part of the
legal regulated rent for any subsequent renewal lease; however,
in the case of a subletting, upon termination of the sublease,
the legal regulated rent shall revert to the legal regulated
rent without the sublet vacancy allowance.
In the instant case, the record below clearly indicates that the
owner made genuine efforts to adjust the legal rent and to refund
overcharges to the subtenant in response to the overcharge
order for the primary tenant, which had been issued on September
11, 1987, five months before the subtenant's complaint was filed.
The Rent Administrator had been informed of this in the owner's
answer of March 15, 1988. In recognition of these efforts, The
Commissioner finds that the imposition of treble damages was
Additionally, the Commissioner notes that as of the date of issu
ance of this Order and Opinion, the whereabouts of the tenant and
the subtenant are unknown. Since the owner's claim that all
overcharges were either refunded or credited to the subtenant is
undisputed, the Administrator's order will be amended to show
that no balance remains to be paid.
The owner's proposed revision of the rent chart is incorrect,
however, as it improperly uses the legal rent of the 9/1/86 lease
as the base to calculate the 7.5% vacancy increase, instead of
the 9/30/84 rent that was correctly used by the Administrator.
This mistake, in turn, created an overcharge for the 9/1/87
lease, which was duly noted in the Administrator's calculations.
A copy of this Order and Opinion will be sent to the current
occupant of the subject apartment.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that the owner's petition be and the same hereby is
granted in part; and that the Administrator's order be, and the
same hereby is revised in accordance with this Order and Opinion.
JOSEPH A. D'AGOSTA