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.EC510452RO
: DRO DOCKET NO.055409
635 Realty Corp., TENANT:Janet Stewart
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND MODIFYING DRA'S ORDER
On March 20, 1990, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on March
12, 1990 by a Rent Administrator, concerning the housing
accommodations known as 635 Riverside Drive, New York, New York,
Apartment No.3D, wherein the Rent Administrator determined the fair
market rent pursuant to the special fair market rent guidelines
promulgated by the NYC Rent Guidelines Board for use in calculating
fair market rent appeals.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2522.3 (e) and (f) of the Rent Stabilization
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.
The tenant originally commenced this proceeding by filing a fair
market rent appeal application on March 17, 1985. The tenant took
occupancy as the first stabilized tenant pursuant to a lease
commencing September 15, 1983 and expiring September 15, 1984 at a
monthly rent of $495.00.
In an order issued on March 12, 1990, the Rent Administrator
granted the tenant's fair market rent appeal, adjusted the initial
legal regulated rent from $495.00 to $344.39, effective as of
September 15, 1983, and determined that the tenant had paid excess
rent in the amount of $12,497.96, plus $198.11 excess security.
In this petition, the owner questions the imposition of treble
damages because he had cooperated in all requests for
documentation, as shown in the record. The owner also states that
he did not own the building at the time in question.
The Commissioner is of the considered opinion that this petition
should be granted in part.
Section 2526.1 of the current Rent Stabilization Code provides that
any owner found to have collected an overcharge above the
authorized rent shall be liable for a penalty equal to three times
the amount of such overcharge and may be assessed the reasonable
costs and attorney's fees of the proceeding as well as interest on
any overcharge which occurs after April 1, 1984. This section
applies to willful violations of the Rent Stabilization Law and
Code and does not apply to fair market rent appeals. Although the
owner in the instant case claims that the Administrator imposed
treble damages, a review of the order indicates that the total
amount determined by the Administrator to be due the tenant
consisted of $12,497.96 in excess rent, and $198.11 in excess
security, without treble damages or any other penalties imposed.
The owner also states that he did not own the building at the time
in question. Pursuant to Policy Statement 93-1, when a current
owner is a party to a fair market rent appeal, the 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
DHCR registration records indicate that the current owner purchased
the subject building after April 1, 1984. (A prior owner was the
registered owner as of April 1, 1984.) Pursuant to Policy
Statement 93-1, the current owner is liable for the excess rent
collected from April 1, 1984 to August 31, 1989, or $11,652.10
(including excess security). This order is issued without
prejudice to any action that the current owner may have against the
prior owner for excess rent reimbursed by the current owner which
were collected by the prior owner.
The owner is directed to roll back the rent to the lawful
stabilized rent consistent with this decision 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 owner.
In the event the 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 owner against
the next month(s) rent until fully offset.
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.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
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, modified in accordance with this order and opinion.
JOSEPH A. D'AGOSTA