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.:
L. ANDREW LEVINE, DISTRICT RENT ADMIN.
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On March 15, 1991, the above named petitioner-owner filed a
petition for administrative review against an order issued on
February 11, 1991, by a Rent Administrator, concerning housing
accommodations known as Apartment A-54 at 8829 Fort Hamilton
Parkway, Brooklyn, New York, wherein the District Rent Adminis-
trator determined that the tenant had been overcharged in the
amount of $1,762.56, 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.
The tenants took occupancy pursuant to a two-year lease
commencing April 1, 1987, and expiring March 31, 1989, at a
monthly rent of $550.00.
On April 5, 1988 the owner was served with a copy of the
complaint and was directed to submit a complete rent history from
the base date including copies of all leases.
On September 8, 1988, the owner notified the Administrator that
it had discovered an error, and had been overcharging the tenant.
The owner calculated a lawful rent of $515.44, for a monthly
overcharge of $34.56. The owner enclosed a copy of a letter to
the complainant explaining the above, informing him of the new
rent of $515.44, and that a check was enclosed in the amount of
$622.08, representing total monthly overcharges (17) plus excess
security (1) ($34.56 x 18 = $622.08). The owner also submitted a
complete lease history with its answer.
In Order No. CC 210280-R, issued on February 11, 1991, the
Administrator determined that the tenant had been overcharged in
the amount of $1,762.56, including treble damages. The
Administrator also found that a total of $622.08 had been
refunded, thus re-ducing the total amount due to $1,140.48.
In its petition, the owner contends that the Administrator's
determination to impose treble damages was improper, since the
owner had independently adjusted the rent to the lawful amount
and refunded all overcharges collected to date, all of which was
asserted and proven to the Administrator prior to the issuance of
the order. The owner then cited three previous opinions of the
Commissioner which held that no treble damages will be imposed
when full refunds are made to the tenant in the manner of the
instant case. Enclosed with the petition is a copy of the check
to the tenant for $622.08, indicating that the tenant cashed it.
The Commissioner is of the opinion that the owner's petition
should be granted.
As promulgated in Policy Statement 89-2, the Division lists
certain actions by an owner, anyone of which is deemed to
establish a lack of willfulness in overcharges, thereby removing
treble damages. Of these, the second option is as follows:
2.Where an owner adjusts the rent on his or her
own within the time afforded to interpose an
answer to the proceeding and submits proof to the
DHCR that he or she had tendered, in good faith,
to the tenant a full refund of all excess rent
collected plus interest.
The record in this case establishes that the owner had notified
the Administrator in September, 1988, that he was independently
refunding all rent overcharges, and excess security to the tenant
upon discovering an error in calculating the tenant's lease rent.
The Administrator's order, except in one respect, is in total
agreement with the owner's position since the amount of
overcharges is exactly the same as the amount stated in the
owner's letters, and the order gives full credit to the refund
that the owner returned to the tenant.
Therefore, the Commissioner recognizes that the owner has
substantially complied with all requirements for the above
exception described in Policy Statement 89-2, and, is thus
revoking the determination of treble damage. The owner's failure
to refund all overcharges within twenty days of the service of
the complaint and to refund interest does not warrant a finding
of willfulness given the owner's refund prior to the issuance of
the Administrator's order and prior to the issuance of Opera-
tional Bulletin 89-2.
The owner is directed to refund a total of $41.29 in interest for
the actual overcharges determined by the Administrator.
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 that the Administrator's order be, and the same
hereby is, revised in accordance with this Order and Opinion.