EL-210400-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 NO.:
                                        EL-210400-RO
       LENBED REALTY,
                                        DRO DOCKET NO.:
                        PETITIONER      CA-210257-R
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  ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                
On  December  10, 1990 the above named petitioner-owner  filed  a
Petition  for  Administrative Review against an order  issued  on
November  16,  1990  by a District Rent Administrator  concerning
housing  accommodations known as Apartment 6-H at 50 Lenox  Road,
Brooklyn, New York, wherein the District Rent Administrator deter-
mined  that  the  tenant had been overcharged in  the  amount  of
$168.31 including treble damages.

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 of a rent
overcharge complaint by the tenant on December 8, 1987.

The  tenants  took  occupancy pursuant to a one-year  lease  com-
mencing  December 1, 1982 and expiring November 30,  1983,  at  a
monthly  rent  of  $220.75.  At the time of  the  complaint,  the
tenant's rent was $561.00.

The  owner  was served with a copy of the complaint and  was  di-
rected  to  submit a complete rent history from  the  base  date,
including  copies  of all leases.  The owner complied  with  this
request.

In  Order  No.  CA  210257-R, issued on November  16,  1990,  the
District  Rent Administrator determined that the tenant had  been
overcharged a total of $168.31, including treble damages. Initial
overcharges of $1.22 per month were determined for the

lease term commencing on June 1, 1987, as based upon the improper
addition  of  an MCI increase to the base rent before calculating
the  guidelines increase.  Subsequent overcharges  of  $1.50  per
month  and  $1.63  per month for the next two  lease  terms  were
entirely the result of the initial error.

In its petition, dated December 10, 1990, the owner contends that
the  determination to impose treble damages was improper, as  the
miscalculation was not willful.

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

Section  26-516 of the Rent Stabilization Law provides  that  any
owner  who  is found by the DHCR to have collected an  overcharge
shall be liable to the tenant for treble damages unless the owner
establishes  by  a  preponderance  of  the  evidence   that   the
overcharge  was  not  willful, in which case  interest  shall  be
imposed.  Section 26-516 also provides that treble damages  shall
be  applied  only to overcharges occurring on or after  April  1,
1984.

As  further explicated in Policy Statement 89-2, the DHCR acknow-
ledges  that  in  certain  situations  the  burden  of  proof  in
establishing lack of willfulness would be deemed to have been met
and,  therefore, the treble damages penalty would not be imposed.
One  such  situation  is when the overcharge  is  caused  by  the
hypertechnical nature of the rent computation.  An  example  that
is  expressly stated in the policy statement is when a  guideline
increase  is  mistakenly applied to the rent on  September  30th,
plus a "supplementary adjustment", including (but not limited to)
an  MCI  increase that had only become effective after  September
30th.

In  the  instant  case, the Administrator's calculations  clearly
show  that the initial overcharge of $1.22 per month was the sole
result  of  adding the MCI increase to the base rent on September
30,  1986, even though the MCI increase only became effective  on
June  1, 1987, at the commencement of the new lease.  Since  this
situation is exactly the same as the enumerated exception in  the
policy statement, the imposition of treble damages was improper.

A  recalculation of the legal rent without treble damages results
in a reduction of total overcharges to $61.30.

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

ORDERED, that the owner's petition be, and the same hereby is
granted, and the Administrators order be, and the same hereby is
modified in accordance with this order and opinion.

ISSUED:


ELLIOT SANDER
                                         Deputy Commissioner
    

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