FG 410145-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.
FG 410145-RO
95 RIVER COMPANY, DISTRICT RENT
ADMINISTRATOR'S DOCKET
NO.
PETITIONER CH 410060-RP
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On July 9, 1991, the above-named owner filed a petition for
administrative review of an order issued on June 6, 1991 by a
District Rent Administrator concerning the housing accommodation
known as Apartment 2-P, 230 Riverside Drive, New York, New York,
wherein the Administrator determined that the owner had collected
excess rents.
The Commissioner notes that this proceeding was initiated prior
to April 1, 1984. Sections 2526.1(a)(4) and 2521.1(d) of the
Rent Stabilization Code (effective May 1, 1987), which deal with
rent overcharge and fair market rent proceedings, provide that
the determination of overcharge and fair market rent proceedings
commenced before April 1, 1984 be based upon the law or code
provisions in effect on March 31, 1984. Therefore, this
proceeding is being determined in accordance with the code in
effect on March 31, 1984, and any reference herein to sections of
the Rent Stabilization Code is to those sections of the code in
effect on March 31, 1984.
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 in the petition for review.
This proceeding was commenced on November 29, 1983 upon the
filing of a complaint of rent overcharge by the tenants with the
former New York City Conciliation and Appeals Board (CAB) under
Docket No. TC-079035-G. The tenants stated therein that
comparable apartments in the subject building had lower rents.
They also stated that the prior tenant of the subject apartment
was the first stabilized tenant and that their request of the
owner to supply them with a copy of and proof of service of the
DC-2 form was unanswered by the owner.
On January 26, 1984, the CAB received the owner's answer.
Included with the answer was the prior tenants' lease which the
owner alleged constituted a complete rental history to the base
date.
On April 1, 1984, responsibility for the administration of rent
stabilization in New York City was transferred to the New York
State Division of Housing and Community Renewal (DHCR).
On June 5, 1986, pursuant to a request by the DHCR, the owner
submitted to the agency a copy of the DC-2 form and a copy of a
certified mail receipt addressed to the first stabilized tenant.
Subsequent correspondence from the tenants continued to raise the
issue of the adequacy of the service by certified mail of the
DC-2 form noting that the signer of the certified mail receipt
was not the tenant.
In an order issued on December 2, 1986 under Docket No. TC 079035-
G the Administrator determined that the proof of ser-vice of the
DC-2 on the first stabilized tenant submitted by the owner was
adequate and that the tenants failed to prove other-wise.
Accordingly, the Administrator processed the case as an
overcharge instead of a fair market rent appeal. The Adminis-
trator found that no overcharge occurred.
On December 15, 1986, the tenants filed a petition for adminis-
trative review under Docket No. AL 510230-RT. The tenants
repeated their claim that the name of the signer of the certified
mail receipt was not the first stabilized tenant and that the
first stabilized tenant never received the DC-2 notice. In an
order issued on August 3, 1988 under Docket No. AL 510230-RT, the
Commissioner ordered that the proceeding be remanded to determine
whether the tenants were entitled to challenge the initial sta-
bilized rent in a fair market rent appeal.
In November 1990 in the review proceeding under Docket No. CH
410060-RP, a hearing was held to consider whether the initial
stabilized tenant received the DC-2 form which would have
commenced the ninety-day statute of limitations period for filing
a fair market rent appeal. At that hearing six witnesses
testified, including the first stabilized tenant. Based on that
testimony, the administrative law judge concluded that the DC-2
form was misdelivered and not received by the first stabilized
tenant. Section 25B of the Rent Stabilization Code in effect in
May 1982 states that the ninety-day period to file a fair market
rent appeal begins to run upon receipt of the DC-2 by the tenant.
Accordingly the administrative law judge recommended that
processing of this case be continued as a fair market rent
appeal.
In the order here under review, the Administrator adopted the
findings and recommendations of the administrative law judge and
revoked the order issued on December 2, 1986 under Docket No. TC-
079035-G. After processing the case as a fair market rent appeal
the Administrator established the lawful stabilization rent at
$477.37 for the lease period of June 1, 1990 through May 31, 1992
and determined that the excess rents collected by the owner were
$43,139.46 through June 30, 1991 including excess security.
In its petition for administrative review the owner requests
reversal of the Administrator's order. The owner alleges that it
had submitted sufficient evidence at the hearing to sustain its
position that the DC-2 was "properly sent." Further, the owner
alleges that it is being penalized for its failure to retain
records for more than four years and cites J.R.D. Management
Corp. v. Eimicke, 539 N.Y.S. 2d 667 (A.D. 2d Dept., 1989) to
support this argument.
After careful consideration, the Commissioner is of the opinion
that the petition should be denied.
First, the owner's allegation that it had proven at the adminis-
trative hearing that the DC-2 was "properly sent" is insufficient
to reverse the Administrator's order. As noted by the adminis-
trative law judge, the issue for resolution at the hearing was
whether the first stabilized tenant actually received the DC-2.
In this connection, it was determined that the DC-2 notice was
misdelivered and was never received by the first stabilized
tenants. Accordingly, the Commissioner finds this allegation by
the owner presents an insufficient basis for reversal.
Second, the owner alleges that the case of J.R.D. Management
Corp. v. Emicke supports its allegation that the owner need not
have supplied records over four years old. This allegation is
totally without merit and is dismissible for several distinct
reasons. Among those reasons is that the J.R.D. Management case
only applies to rent-overcharge proceedings, and does not apply
to fair market rent appeals. JRD was based on a change in
Section 26-516(g) of the Rent Stabilization Law, which only
governs rent overcharge proceedings. Section 26-513 of the Rent
Stabilization Law, which deals with fair market rent appeals,
continues to re-quire owners to submit records going back more
than four years.
Accordingly, the Commissioner finds that the petition for admin-
istrative review must be denied.
THEREFORE, pursuant to the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, denied,
and that the Administrator's order be, and the same hereby is,
affirmed, and it is
FURTHER ORDERED, that the owner shall refund to the tenants all
excess rents collected by the owner. The owner may credit such
refunds against future rents over a period not in excess of six
months. The tenants, at their option, may continue to abate
their rent until the refund is fully credited, or request the
owner to refund any balance outstanding at the end of such
six-month period.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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