EJ 410165 RO

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

          APPEAL OF                            ADMINISTRATIVE REVIEW
                                               DOCKET NO.:  EJ 410165-RO

                                               DRO DOCKET NO.: ZDB-410052-R
                                               MILTON/LORELEI KAPLAN

                                       IN PART

          On October 12, 1990 the  above  named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          September 21, 1990 by the Rent Administrator,  92-31  Union  Hall
          Street,  Jamaica,  New  York  concerning  housing  accommodations
          known as Apartment 29-B at 1365 York Avenue, New York,  New  York
          wherein the Rent Administrator  determined  that  the  owner  had
          overcharged the tenants.

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

          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  in
          February, 1989 of a rent overcharge complaint by the tenants,  in
          which they stated that they had commenced occupancy  on  February
          1, 1984 at a rent of $2,540.00 per month.

          During the course of the proceeding evidence was  submitted  that
          the subject building was completed on September 1, 1977 and  that
          it was  receiving  a  partial  tax  exemption  through  the  Real
          Property Tax Law (RPTL) Section 421-a program.  Not  until  after
          the Administrator's order was issued did the owner claim that the 
          tax benefit period expired on June 30, 1988.

          In an order issued on September 21, 1990 the Administrator  found
          an overcharge of  $1,103.28  as  of  September  30,  1990.   This
          occurred both because the owner continued  to  charge  Guidelines

          EJ 410165 RO
          increases on all of the annual 2.2% Section 421a increases,  even
          though such increases taken  after  November  18,  1982  did  not
          become part of the base rent, and because the  Administrator  did
          not allow the November 1, 1984 increase, not taken at  the  time,
          to be taken on November 1, 1987.

          In an October 5, 1990  request  for  reconsideration,  the  owner
          contended that the tax benefit period had  expired  on  June  30,
          1988.   The  owner  later  submitted  evidence  supporting   that
          contention.  The Division of Housing and Community Renewal (DHCR) 
          refused to reopen the proceeding since the evidence had not  been
          in the record before the Administrator.

          In this petition against the September 21, 1990 order, the  owner
          contends in substance that it should have been allowed to  charge
          an increase of $24.89 [representing the November 1, 1984 increase 
          of $26.62 which was not  charged  except  for  $1.73,  which  was
          actually a 6 1/2% Guidelines increase on  the  November  1,  1983
          surcharge even though 2.2% surcharges after November 18, 1982 did 
          not become part of the base rent] on November 1, 1987;  and  that
          there is an overcharge of only $137.94 if this is done.

          The Commissioner is of the opinion that this petition  should  be
          granted in part.

          Because the Final Certification  of  Eligibility  for  the  421-a
          program was issued on September 9, 1977, and because the  initial
          lease under the program began November 1, 1977, it  appears  that
          the Administrator assumed that the tax benefits expired  on  June
          30, 1977, and that therefore the owner could not take a  [mostly]
          previously-unused increase on November 1, 1987.  When the  owner,
          subsequent to the issuance of the order under appeal, submitted a 
          letter from the New York City Finance  Department  that  the  tax
          exemption expired  on  June  30,  1988,  the  DHCR  rejected  the
          submission as not having been submitted in the proceeding  before
          the Administrator.  However, the information about the expiration 
          date of the tax benefits was an  easily-ascertainable  matter  of
          public record which the DHCR could be charged with knowledge  of.
          The letter from the owner after the issuance of the order was not 
          so much a submission of new evidence as it was a calling  of  the
          DHCR's attention to a public record which could be considered  to
          have implicitly been part of the record before the Administrator. 
          The Commissioner finds it appropriate to take note  of  the  fact
          that the benefits expired on June  30,  1988,  and  to  therefore
          allow the owner to take, prior to that date, the remaining $24.89 
          surcharge to which the owner was entitled in  1984  but  had  not
          taken at that time.  The Commissioner has set  forth  the  lawful
          stabilization rents on an amended rent calculation chart attached 
          hereto and made a part hereof.  The amount of overcharge  differs
          from that calculated by the owner because  of  the  inclusion  of

          The Commissioner  notes  that  the  1990  apartment  registration
          listed the tenants as having a lease ending January 28, 1991, and 
          that the 1991 registration listed the apartment as  being  exempt
          from rent regulation as of  March  22,  1991  by  virtue  of  the
          expiration of 421-a benefits.  It would appear therefore that the 
          tenants have vacated.

          EJ 410165 RO
          THEREFORE, in accordance with  the  Rent  Stabilization  Law  and
          Code, it is

          ORDERED, that this Petition be, and the same hereby  is,  granted
          in part and that the Rent Administrator's order be, and the  same
          hereby is, modified in accordance with this  Order  and  Opinion.
          The lawful stabilization rents and the amount of  overcharge  are
          established on the attached chart, which is fully made a part  of
          this order.  The total overcharge, is $148.63 as of September 30, 


                                                  JOSEPH A. D'AGOSTA
                                                  Acting Deputy Commissioner


                                 PAGE 4 OF THE CHART

          (1)  The 2.2% charge is always computed upon  the  amount  of
               the initial rent;  it  is  not  compounded;  nor  is  it
               computed upon any rent  increases  permitted  after  the
               initial rent is established.  Until November  18,  1982,
               the 2.2% increase did become  part  of  the  apartment's
               base rent.   Any  new  2.2%  increase  occurring  on  or
               after November 19, 1982 remains separate from  the  base
               rent and must therefore be added back to the rent  after
               the guideline increase is computed.  In  the  proceeding
               before the Administrator  the  owner  was  requested  to
               submit rent  ledgers  to  show  whether  the  1984  Rent
               Registration included  the  separate  November  1,  1983
               2.2% increase in the  base  rent.   The  owner  did  not
               submit rent ledgers, therefore, it was  determined  that
               the owner did include a separate 2.2%  increase  is  the
               base rent.

          (2)  As of November  1,  1984,  the  owner  was  entitled  to
               collect  an  additional  $26.62  per   month   in   2.2%
               surcharges.  The owner will be permitted to collect  the
               additional surcharges prospectively  when  they  are  in
               fact assessed.

          (3)  This includes  $1.73  of  the  November  11,  1984  2.2%
               surcharge; $24.89 of that surcharge is  still  available

          EJ 410165 RO

          (4)  As of November 1, 1986, the owner had  collected  $81.59
               of the $106.48 in 2.2% surcharges  it  was  entitled  to
               collect after April 1, 1984.  Since  the  tax  abatement
               expired on June 30, 1988,  the  owner  was  entitled  to
               charge the remaining $24.89  surcharge  on  November  1,
               1987.   Thereafter,  the  owner  was  not  entitled   to
               collect any additional 2.2% surcharges.  Any  subsequent
               lease increases should  be  calculated  above  the  base
               rent of $2,676.75 per month.

          (5)  As of November 1, 1987 the owner collected a total of
               $106.48 of separate 421-a, 2.2% surcharges.   The  owner
               is limited to  collecting  $106.48  of  separate  421-a,
               2.2% surcharges for all subsequent increases.

          (6)   After  the  10th  year,  no  additional   421-a,   2.2%
               increases are assessed but the current  separate  charge
               of $106.48 stays with the rent as a separate charge.

                                   PAGE 5 OF THE CHART

          (7)  The record discloses that the  overcharge  collected  is
               the result of hypertechnical  error.   It  is  therefore
               determined that the  owner  did  not  willfully  collect
               rent in excess  of  the  lawful  amount,  and  that  the
               assessment of treble damages is not  warranted  in  this

          (8)   The  owner  is   advised   to   amend   the   apartment
               registrations for the calendar years 1984  through  1990
               to reflect  the  correct  base  rents  charged  and  the
               separate 421-A,  2.2%  surcharge  amounts  collected  by
               contacting:   Tammy  Kipp,  Director  Rent  Registration
               Unit, Hampton Plaza, 38-40 State  Street,  Albany,  N.Y.


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