EG520245RT
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 NO.: EG520245RT
Idia Velez, DRO DOCKET NO.: BI410117R
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On July 3, 1990, the above-named petitioner-tenant filed a Petition for
Administrative Review against an order issued on June 9, 1990, by the
Rent Administrator concerning the housing accommodations known as 815
West 180th Street, New York, New York, Apartment No. 44, wherein the
Administrator determined that tenant had not been overcharged.
The Administrative Appeal is being determined pursuant to the provisions
of Section 2526.1 of the Rent Stabilization Code.
The issue herein 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 commenced by the tenant's filing of a rent
overcharge complaint on October 10, 1987. The tenant had commenced
occupancy of the subject apartment on September 1, 1977 pursuant to a
two year lease at a rent of $180.00 per month.
In answer to the tenant's complaint the owner submitted a lease history
dating from September, 1984.
In response to further inquiries on the rent charged after the issuance
of a DHCR rent reduction order for service violations, the owner
submitted a copy of the tenant's billing history up to April 12, 1990,
showing a current rent charged of $280.83, and a base rent of $312.23.
The owner also stated that he had not increased the rent after the DHCR
approved an MCI increase, AL530264-OM, because the rent reduction order
was in effect.
In order Number BI410117R, the Rent Administrator determined that the
tenant had not been overcharged through June 30, 1990 and that the
overcharge complaint was denied.
In this petition, the tenant contends in substance that the order should
not have granted the MCI increase to the owner because the tenant's
lease made no mention of such an increase, and therefore the owner's
attempt to collect it is illegal. Furthermore, the tenant feels that
the owner's letter of June 24, 1990 was unfair in demanding immediate
EG520245RT
payment of the entire increase since the effective date of September 1,
1989, because it was the owner's fault that the tenant was not notified
of the increase at that time.
The owner responds that the tenant was not notified of the MCI increase
when it was approved because the DHCR rent-reduction order was still in
effect at that time and the owner was prohibited from collecting the
increase. However, the owner states that the DHCR shortly thereafter
issued an order restoring the rent, and that the owner was then able to
charge the increase back to the effective date. The owner also disputes
the claim that the increase was not mentioned in the lease and
highlights language in the renewal lease that generally provides for a
rent increase or decrease pursuant to DHCR orders.
The Commissioner is of the opinion that the tenant's petition should be
granted.
Pursuant to Section 2523.4(a) of the Rent Stabilization Code:
A tenant may apply to the DHCR for a reduction
of the legal regulated rent to the level in ef-
fect prior to the most recent guidelines adjust-
ment, and the DHCR shall so reduce the rent for
the period for which it is found that the owner
has failed to maintain required services. The
order reducing the rent shall further bar the
owner from applying for or collecting any further
increases in rent until such services are restored.
The record in this case establishes that the Rent Administrator
improperly included an MCI increase that had been approved in DHCR order
AL530264-OM, effective September 1, 1989, even though a rent reduction
order for service violations, BD510311S, was in effect on that date.
This action was prohibited under Section 2523.4(a) of the Rent
Stabilization Code, as stated above.
However, the owner's rent records indicate that an overcharge occurred
not because the owner collected the MCI increase - which he did not -
but because the owner incorrectly collected a guidelines increase in the
two year lease term commencing on September 1, 1988, in spite of the
ongoing rent reduction order. The owner had complied with the order to
the extent of reducing the rent by a guideline increase, and he
continued the reduction throughout the period here under review.
However, the owner's disregard of the rule barring the collection of
further guidelines increases until services are restored - as cited
above - resulted in overcharges in the amount of $708.32, including
interest, as documented in the enclosed rent calculations chart affixed
hereto and made a part hereof.
The Commissioner has determined that the record does not support a
finding of willfulness. It is reasonable to infer from the owner's
prompt reduction of the rent and credit for retroactive overcharges in
compliance with the service reduction order, that the improper
guidelines increase was unintentional. It is also apparent that the
owner was not sent the required treble damages. Therefore, only the
interest penalty will be imposed.
EG520245RT
Finally, it should be mentioned that a letter from the Compliance
Bureau, dated July 31, 1990, indicates that the owner has made all
repairs mentioned in the reduction order. The rent remains frozen,
however, until the owner files a rent restoration application within the
DHCR.
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
increases.
The Commissioner has determined in this Order and Opinion that the owner
collected overcharges of $708.32. Upon expiration of the period for
seeking review of this Order and Opinion pursuant to Article Seventy-
eight of the Civil Practice Law and Rules, not in excess of twenty
percent per month of the overcharge may be offset by the tenant against
any rent thereafter due the owner. In crediting this overcharge, the
tenant may add to the overcharge, interest at the rate payable on a
judgment pursuant to section 5004 of the Civil Practice Law and Rules
from the issuance date of the Rent Administrator's order to the issuance
date of the Commissioner's order.
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, and that the order of the Rent Administrator be, and
the same hereby is, modified in accordance with this Order and Opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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