Docket No. EF 220212-RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NOS. EF 220212-RO &
FG 220278-RO
DISTRICT RENT
Saul Perlstein ADMINISTRATOR'S DOCKET
NOS. DE 220014-AD &
FC 220135-R
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN DOCKET NO. EF 220212-RO & TERMINATING PROCEEDING UNDER
DOCKET NO. FG 220278-RO
On June 25, 1990, the above-named owner filed a petition for
administrative review of an order issued June 14, 1990 by the Rent
Administrator, concerning the housing accommodation known as
Apartment 2nd Floor front, 1353 41st Street, Brooklyn, New York,
wherein the Rent Administrator determined that the landlord's
report of statutory Decontrol is void. On July 25, 1991, the
above-named owner timely filed a petition for administrative review
of an order issued by the Administrator on June 14, 1991, wherein
the Administrator determined that the subject apartment's maximum
collectible rent (MCR), effective November 27, 1968, was $58.93.
In an order issued on February 28, 1992, under Docket No.
FG 220278-RO, the Commissioner granted the landlord's petition in
part, determining that the landlord did not file a petition of the
Administrator's order, issued on June 14, 1990, which voided the
"Landlord's Report of Statutory Decontrol," and that, the
aforementioned order (District Rent Administrator's Docket No.
DE 220014-AD) is a final determination and cannot be collaterally
attacked. The Commissioner further determined that, based upon the
record, the subject building was owned by relatives of one of the
subject tenants; that since 1968 no landlord had applied for any
type of rent increase for the subject apartment, until the
petitioner-landlord acquired ownership; that for a time the
subject tenant was a part owner of the subject premises, and that
since 1954 the subject tenant has been paying a monthly rent of
Docket No. EF 220212-RO
$250.00, and not the $58.93 registered rent. Based on the above-
mentioned facts the Commissioner determined that the MCR for the
subject apartment is to be modified to $250.00 per month, effective
November 27, 1968 through June 14, 1991 (the issuance date of the
Administrator's order, under Docket No. FC 220135-R), pursuant to
Section 2202.7 of the City Rent and Eviction Regulations.
In a letter to the rent agency, dated March 17, 1992, the
subject owner requested reconsideration of the order and opinion
issued by the Commissioner on February 28, 1992, based upon an
"irregularity in a vital matter," pursuant to Section 2529.9 of the
Rent Stabilization Code. The landlord points out that the
aforementioned Commissioner's order, under Docket No. FG 220278-RO,
"denied the owner's right to challenge the alleged rent control
status of the tenant based upon the owner's alleged failure to
appeal a prior order voiding the Landlord's Report of Statutory
Decontrol which was issued on June 14, 1990, under docket number DE
220014-AD... In fact said order was timely appealed and such
appeal is still pending under docket number EF 220212-RO."
On April 10, 1992 the rent agency issued an order granting the
owner's request for reconsideration and reopening of the
Administrative Review Docket No. FG 220278-RO, as the Commissioner
in the above-mentioned order, "erroneously stated that the
Division's records showed that no appeal had been taken from the
Administrator's order of June 14, 1990." The Commissioner's order,
dated April 10, 1992, also determined that Administrative Review
Docket No. FG 220278-RO should be consolidated with Administrative
Review Docket No. EF 220212-RO.
Pursuant to the Commissioner's order, dated April 10, 1992, and
since the petitions involve common questions of law and fact the
Commissioner is consolidating the two aforementioned Administrative
Review docket numbers for disposition herein.
The Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion of the record relevant to
the issues raised by the administrative appeal.
The proceeding under Docket No. DE 220014-AD was initiated by
the tenants' letter to the rent agency, dated May 9, 1989,
requesting that the Division of Housing and Community Renewal
(D.H.C.R.), determine the rental status of their apartment. The
tenants assert that they have resided in the subject apartment
continuously since 1953, and that their apartment is rent
controlled, but they have received a "Landlord's Report of
Statutory Decontrol," under Docket No. CF 220286-SD.
Attached to the letter is a non-notarized affidavit signed by
the subject tenants, dated May 9, 1989, stating that they have
resided in the subject apartment since 1953; that they believe
their apartment is rent controlled, and that the subject owner is
Docket No. EF 220212-RO
attempting to double the rent.
Also attached to the letter is a copy of the aforementioned
report of statutory decontrol, dated December 21, 1984.
In a letter to the rent agency, dated May 25, 1989, the tenants
requested that the D.H.C.R. initiate a "Section 36 proceeding" (the
predecessor of Section 2202.22 of the City Rent and Eviction
Regulations) to determine the rental status of the subject
apartment.
On August 2, 1989, D.H.C.R. mailed to the parties in this
proceeding a "Notice of Commencement of Administrative Proceeding,"
which stated that the Administrator was proposing to void the
aforementioned report of statutory decontrol, filed under Docket
No. CF 220286-SD, and that the parties had twenty days from the
above-mentioned date to submit evidence to substantiate their
respective claims.
The landlord's response, dated August 9, 1989, asserted that he
purchased the subject building sometime in May, 1989, and that the
prior landlord stated that all of the apartments were stabilized;
that the subject tenant is his aunt (the aunt of the prior
landlord), and that at one time his aunt (the subject tenant,Jean
DePaola) had been a part owner in the subject building. The
subject landlord alleged that an owner residing in an apartment
"automatically decontrols" that apartment.
The tenants' answer, dated August 22, 1989 alleged, among other
things, that there were two tenants who have continuously resided
in the subject apartment since 1953; that one of the tenants never
was an owner of the building, and therefore, that tenant is still
subject to the rent control laws; that the "Landlord's Report of
Statutory Decontrol" falsely stated that the subject apartment was
decontrolled due to a "vacancy on or after June 30, 1971," and that
the other tenant in the subject apartment" denies being the owner
of the building and denies ever receiving a deed to the premises."
On December 21, 1989, the Administrator mailed a notice to the
landlord requesting that he submit to the rent agency a copy of the
deed that was transferred to the aforementioned subject tenant
"which indicates the property with the address,the metes and bounds
and all concerned descriptions of the property."
On January 16, 1990, the landlord submitted to the rent agency
a Certificate of Title which listed the subject building's address,
a description of the subject building's boundaries, and a
certification by the "Commonwealth Land Title Insurance Company"
that the subject building is being conveyed to the petitioner-owner
by the co-executors of the estate of Vincent J. Madorma (the
subject tenant's brother), who obtained title to the subject
building through a deed which included the signature of the
Docket No. EF 220212-RO
aforementioned subject tenant.
On January 24, 1990, the Administrator mailed to the tenants a
notice requesting that they verify the landlord's aforementioned
assertion of one of the tenants being "part owner" of the subject
building.
The tenants' response to the Administrator's notice, dated
January 26, 1990, stated that Jean DePaola:
[B]ecame a part owner of the subject building upon the
death of a prior owner. She then transferred her
ownership to her brother. She had resided in the
building as a tenant many years before she became the
owner and many years after she gave her interest to her
brother.
The tenants' further stated that Jean DePaola "was an owner by
operation of the law, and her husband... was never an owner of the
building."
On June 14, 1990, the Administrator issued the order under
review (Docket No. DE 220014-AD) which voided the "Landlord's
Report of Statutory Decontrol filed under docket number CF 220286-
SD."
The owner's petition, filed under Administrative Review Docket
No. EF 220212-RO, alleges that the subject apartment should be
decontrolled "as the tenants as co-owners, sold their ownership
rights on 1/25/89, thus automatically relinquishing their rent
controlled rights. This is undisputed."
To the petition the owner attaches an "Application By Owner To
Determine Whether Building/Apartment Is Exempt From The Emergency
Tenant Protection Act Or The Rent Stabilization Law," dated June
19, 1990, which alleges that the subject building should be exempt
from rent regulations, as the building has fewer than six
apartments.
On July 31, 1990, the subject tenants, submitted their answer
to the landlord's petition. The answer is only signed by Rudolph
DePaola, the husband of the aforementioned Jean DePaola. He
alleges that he continuously resided in the subject apartment since
1953; that he never was an owner of the subject building; that he
never signed a deed pertaining to the subject building, and that
the subject apartment is rent controlled.
The subject tenant, Rudolph DePaola, filed an overcharge
complaint with D.H.C.R., dated March 7, 1991, under Docket No. FC
220135-R. The tenant alleged that on June 4, 1989 the new landlord
increased the monthly rent from $250.00 to $500.00.
In a letter to the rent agency, dated September 5, 1991, the
Docket No. EF 220212-RO
subject landlord asserts the following:
1) That the subject building (a four family house) was
purchased approximately thirty five years ago by Vincent and Mary
Madorma;
2) That Vincent Madorma died in 1976, and left the subject
building to his wife, Mary, and his son Dominick;
3) That Dominick Madorma had six siblings, including Jean
Depaola (one of the subject tenants) who still lives in the
building;
4) That Mary Madorma died in 1982, and left her one-half
interest in the subject building to her children;
5) That approximately two years later the aforementioned
siblings (including one of the subject tenants) sold their title to
their brother Vincent Madorma, and
6) That on the same day title in the subject building was
transferred to Vincent Madorma, Vincent's son Dominick filed a
"Landlord's Report of Statutory Decontrol," dated December 21,
1984, with D.H.C.R.
To the above-mentioned letter the landlord attaches a deed,
dated December 21, 1984 (the same date that the report of statutory
decontrol was filed with the rent agency), which transfers title to
the subject building from the aforementioned siblings (which
includes one of the subject tenants) to Vincent Madorma. The
subject tenant, Jean DePaola, signed the above-mentioned deed,
along with her other sibllings, above the words "as residuary
legatees under the Last Will and Testament of Mary Madorma,
deceased."
On May 12, 1992, the subject landlord submitted a letter to the
rent agency, which was in response to the Commissioner's order,
dated April 10, 1992, which granted the landlord's request for
reconsideration. The landlord states that:
The owner seeks to bring to the agency's attention that
the subject premises contains four (4) apartments,
therefore, it is not subject to stabilization pursuant to
Section 2520.11 of the 1987 Rent Stabilization Code
(RSC). In order for a building to be subject to
stabilization it must have six (6) or more units.
Since it is the owner's position that Ms. DaPaola
lost her rent controlled status when she became an owner
of the subject premises, then once the apartment was
decontrolled it was no longer subject to any form of
regulation whatsoever.
Docket No. EF 220212-RO
To the letter the landlord attaches a copy of a page from the
"contract of sale" between the subject landlord and the prior
owner, which alleges that the subject apartment is decontrolled.
The Commissioner is of the opinion that the landlord's petition
(Docket No. EF 220212-RO) should be granted.
It is undisputed by both parties to this proceeding that Jean
DePaola was a part owner of the subject building. As the record
reflects, Jean DePaola inherited a 1/12th interest in the subject
building, on December 3, 1982. She maintained her part owner
status in the subject building, until December 21, 1984.
The Commissioner notes that it is a long established policy
followed by the rent agency and the predecessor agency of the
Division of Housing and Community Renewal in administrating the
various statutes providing for the regulation of housing that, as
in this proceeding, when an owner-occupant sells their title in the
building, while still continuing to occupy their apartment, it is
the functional equivalent of their vacating that apartment.
Accordingly, the Commissioner finds that the subject apartment
has been decontrolled. The Commissioner further finds that as the
subject building contains fewer than six units, it is not subject
to rent regulations, pursuant to Section 2520.11 (d) of the Rent
Stabilization Code.
Accordingly, the Commissioner finds that the Administrator's
order, under Docket No. DE 220014-AD, is hereby revoked.
The Commissioner finds that Rudolph DePaola's assertion that
the subject apartment should not be decontroled, as he was never an
owner of the subject building is without merit. The aforementioned
Section 2200.2 (f) (11) of the New York City Rent and Eviction
Regulations, does not require that all of the occupants of the
subject apartment had to be an owner, rather, it is sufficient for
the above-mentioned section to apply, that one occupant in the
subject apartment was an owner.
The Commissioner finds that as the subject apartment is no
longer subject to rent regulations the rent agency does not have
jurisdiction to determine the rent of the subject apartment.
Accordingly, the Commissioner finds that the Administrator's
order, under Docket No. FC 220135-R, which determined the MCR for
the subject apartment, should be revoked. The Commissioner further
finds that as the rent agency does not have jurisdiction to
determine the subject apartment's rent, there is no issue for the
Commissioner to decide in the landlord's petition, under Docket No.
FG 220278-RO, and therefore, the above-mentioned proceeding should
be terminated as moot.
Docket No. EF 220212-RO
The tenants' assertion that their apartment should be subject
to the rent control laws because the landlord's report of statutory
decontrol, dated December 21, 1984, incorrectly stated that the
subject apartment was vacated on or after June 30, 1971, is without
merit. The subject apartment was decontrolled due to Jean DePaola
residing in the subject apartment as a part owner of the subject
building. Accordingly, the Commissioner finds that the incorrect
statement on the aforementioned statutory decontrol report was
harmless error as to the subject tenants, and may not be used as a
sword by the tenants in denying the petitioner-landlord his right
to a decontrolled building in this proceeding.
THEREFORE, in accordance with the provisions of the Rent and
Eviction Regulations for New York City, it is
ORDERED, that the landlord's petition, under Docket No.
EF 220212-RO be, and the same hereby is, granted, and that the
order issued by the Rent Administrator on June 14, 1990, under
Docket No. DE 220014-AD, be, and the same hereby is, revoked; and
it is
FURTHER ORDERED, that the landlord's petition, under Docket No.
FG 220278-RO be, and the same hereby is, terminated, and that the
order issued by the Rent Administrator on June 14, 1991, under
Docket No. FC 220135-R, be, and the same hereby is, revoked; and it
is
FURTHER ORDERED, that the tenants may repay any arrears in rent
arising as a result of this order in six equal monthly installments
commencing with the next rent payment date.
ISSUED:
Joseph A. D'Agosta
Acting Deputy Commissioner
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