STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X S.J.R. NO. 7482
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. EA410336RO
ZEAL MANAGEMENT CORP. : DRO DOCKET NO.L3114787RT
TENANT: WILLIAM MCINTYRE
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN
On January 31, 1990, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
December 27, 1989, by the Rent Administrator, 92-31 Union Hall
Street, Jamaica, New York, concerning the housing accommodations
known as 105 West 72nd Street, New York, New York, Apartment No. 8B,
wherein the Rent Administrator determined the fair market rent
pursuant to the special fair market rent guideline promulgated by
the New York City Rent Guidelines Board for use in calculating fair
market rent appeals and a comparability study.
The Commissioner notes that this proceeding was filed 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 Administrative Appeal is being determined pursuant to the
provisions of Section 26-513 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order was
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 by the tenant's filing of a fair
market rent adjustment application in March 1984. In such
application the tenant stated that he first moved to the subject
apartment on May 1, 1975 at a rental of $425.00 per month.
During the course of the proceeding before the Rent
Administrator, the owner 105 West 72nd Associates advised that it
had purchased the subject premises on August 17, 1984.
In Order Number L3114787RT, the Rent Administrator adjusted the
initial legal regulated rent by establishing a fair market rent of
$334.89 effective May 1, 1975, the commencement date of the initial
rent stabilized lease. The Rent Administrator also directed that
the owner refund excess rent of $17,462.10 to the tenant covering
the period from May 1, 1975 to April 30, 1988. The Rent
Administrator's order listed the prior owner Lynned Realty Corp. and
the owner herein 105 W. 72nd Associates as owners in the caption of
the order but did not allocate the excess rent between these owners.
In this petition, the owner Zeal Management Corp. (the managing
agent for 105 W. 72nd Associates) alleges in substance that it
acquired the subject premises on August 17, 1984 and should not be
liable for excess rent collected prior to that date. In support of
such contention, the owner submitted a copy of the deed by which it
purchased the subject premises.
In answer to the owner's petition, the tenant stated in
substance that he feels the rent overpayments from 1975 should be
refunded to him.
The Commissioner is of the opinion that this petition should be
granted in part.
Pursuant to Policy Statement 93-1 where a current owner is a
party to a fair market rent appeal, DHCR shall order the current
owner to refund to the tenant all excess rent paid by the tenant
since April 1, 1984 or the commencement date of the tenant's initial
lease, whichever is later, notwithstanding that all or a portion of
the excess rent was collected by one or more prior owners. A
current owner will be jointly liable with a prior owner for excess
rent collected by a prior owner and each owner will remain severally
liable for the excess rent collected by each owner.
Therefore the prior owner Lynned Realty Corp. is individually
responsible for excess rent collected from May 1, 1975 to April 1,
1984 or $10,975.84, the prior owner Lynned Realty Corp. and the
current owner 105 West 72nd Associates (care of Zeal Management now
Streamline Management, Inc.) are jointly and severally liable for
excess rent collected from April 1, 1984 to September 1, 1984 or
$620.76, and the current owner 105 West 72nd Associates (care of
Zeal Management now Streamline Management, Inc.) is individually
responsible for excess rent collected between September 1, 1984
through April 30, 1988 or $5,865.50 ( inclusive of excess security).
The owner is directed to reflect the findings and
determinations made in this order on all future registration
statements, including those for the current year if not already
filed, citing this order as the basis for the change. Registration
statements already on file, however, should not be amended to
reflect the findings and determinations made in this order. The
owner is further directed to adjust subsequent rents to an amount no
greater than that determined by this order plus any lawful
The current owner is directed to roll back the rent to the
lawful stabilized rent consistent with this determination and to
refund or fully credit against future rents over a period not
exceeding six months from the date of receipt of this order, the
excess rent collected by the current owner plus joint and several
liability of the excess rent collected from April 1, 1984 to
September 1, 1984 as detailed above.
In the event the current owner does not take appropriate action
to comply within sixty (60) days from the date of issuance of this
order, the tenant may credit the excess rent collected by the
current owner plus the excess rent collected from April 1, 1984 to
September 1, 1984 against the next month(s) rent until fully offset.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be, and
the same hereby is, granted in part, and, that the order of the Rent
Administrator be, and the same hereby is, modified in accordance
with this order and opinion.
JOSEPH A. D'AGOSTA