FH 510073 RO

                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO. FH 510073 RO

                                              :  DISTRICT RENT OFFICE
               Big River Realty Corp.,           DOCKET NO. ZU-004937 R
                                                 TENANT: Bruce C. Piersawl   
                               PETITIONER    : 

                                       IN PART

          On August 5, 1991, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on      
          July 24, 1991, by the Rent Administrator, Gertz Plaza, Jamaica, 
          New York, concerning the housing accommodations known as 
          835 Riverside Drive, New York, New York, Apartment No. 5H, wherein 
          the Rent Administrator determined that the owner had overcharged 
          the tenant.

          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 

          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 in November 
          1985 of a rent overcharge complaint by the tenant who stated in 
          substance that he believed he was being overcharged and that he 
          first moved to the subject apartment on August 1, 1985 at a rental 
          of $981.00 per month.

          In answer to the complaint, the owner stated in substance that it 
          first acquired ownership of the subject premises on January 23, 
          1986 and rent information prior to occupancy by the tenant herein 
          on August 1, 1985 is vague.  The owner sbmitted evidene showing 
          that the subject apartment's April 1, 1984 rent was properly 
          registered and a copy of a Major Capital Improvement (hereafter 

          FH 510073 RO

          MCI) rent increase order issued on June 11, 1986.

          Subsequently, the tenant submitted a copy of a so ordered court 
          stipulation under index number 96689/87 which provided that the 
          legal rent for the subject apartment would be $525.00 per month 
          effective November 1986 but that this figure woul be without 
          prejudice to a DHCR decision on the tenant's rent overcharge 
          complaint herein.

          In Order Number ZU-004937 R, the Rent Administrator established the 
          lawful stabilization rent as $611.63 effective August 1, 1985, 
          determined that the tenant had been overcharged and directed a 
          refund to the tenant of $16,644.45 including treble damages on that 
          portion of the overcharge collected on and after April 1, 1984.

          In this petition, the owner alleges in substance that it accepts 
          the finding of rent overcharge but feels that treble damages are 
          not warranted since it was not the owner at the time the tenant 
          herein signed his original lease in 1985.  In addition the owner 
          alleges that since it reduced the rent to $525.00 effective 
          November 1986 in accordance with the court directive, the tenant 
          also owes the owner rent arrears since the Rent Administrator's 
          order established the lawful stabilization rent at $635.64 
          effective November 1, 1986 and at $692.85 effective August 1, 1987 
          to July 31, 1989 whereas the tenant continued to pay $525.00 during 
          this period; and that the Rent Administrator's order established 
          the lawful stabilizaton rent as $755.21 during the period from 
          August 1, 1989 to July 31, 1991 while the tennat paid $572.25 
          during this period.

          In answer to the owner's petition, the tenant stated in substance 
          that the imposition of treble damages was warranted and that the 
          owner should be limited to the actual rents charged of $525.00 and, 
          $572.25 rather than the lawful stabilization rents of $635.64, 
          $692.85 and $755.21 respectively.

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

          An examination of the records in this case discloses that the owner 
          is correct in its contention that it is not bound by the $525.00 
          and $572.25 rents the tenant was paying as a result of the court 
          stipulation since the terms of such stipulation specifically 
          provided that the rental amount was without prejudice to the DHCR 
          decision on the tenant's overcharge complaint.  Accordingly the 
          tennat is required to pay the lawful stabilization rents of 
          $635.64, $649.64; $692.85 and $755.21 respectively as listed in the 
          amended calcualtion chart attached to this order.  The amount owed 
          by the tenant has been subtracted from the total overcharge owed by 
          the owner and the setting of the rent subsequent to July 31, 1991 
          should be based on the amount of $755.21.

          FH 510073 RO

          With regard to the owner's contention that the imposition of treble 
          damages was not warranted, Section 2526.1 of the Rent Stabilization 
          Code provides in pertinent part that any owner who is found by the 
          DHCR to have collected a rent or other consideration in excess of 
          the legal regulated rent on and after April 1, 1984 shall be 
          ordered to pay to the tenant a penalty equal to three times the 
          amount of such excess.  If the owner establishes by a preponderance 
          of the evidence that the overcharge was not willful, the DHCR shall 
          establish the penalty as the amount of the overcharge plus interest 
          from the date of the first overcharge on or after April 1, 1984.  
          Further for overcharges collected on or after April 1, 1984 a 
          current owner shall be responsible for all overcharge penalties, 
          including penalties based upon overcharges collected by any prior 

          In the instant case, the owner has not submitted sufficient 
          evidence to substantiate its claim that the overcharge was not 
          willful.  The fact that a prior owner initiated the overcharge 
          against the tenant herein does not relieve the owner herein from 
          charging the lawful stabilization rent in accordance with the 
          rental hitory it is required to secure and does not establish that 
          the resulting overcharge was not willful.  Therefore, the 
          imposition of treble damages was warranted.                  

          Taking the above factors into account, the Commissioner has 
          recalculated the lawful stabilization rents and amount of rent 
          overcharge for the subject apartment, including treble damages, on 
          the overcharge occurring on and after April 1, 1984.  The lawful 
          stabilization rents and amount of rent overcharge taking into 
          account the rent arrears owed by the tenant, are set forth on the 
          amended rent calculation chart attached hereto and made a part 

          The Commissioner notes that the prior owner was not served with a 
          copy of the tenant's complaint nor listed in the Rent 
          Administrator's order.  This order is issued without prejudice to 
          the current owner's rights, if any, to proceed against the prior 
          owner in a court of competent jurisdiction.

          Because this determination concerns lawful rents only through      
          July 31, 1991, the owner is cautioned to adjust subsequent rents to 
          an amount no greater than that determined by this order plus any 
          lawful increases, and to register any adjusted rents with this 
          order and opinion being given as the explanation for the 

          This order may, upon the expiration of the period in which the 
          owner may institute a proceeding pursuant to Article 78 of the 
          Civil Practice Law and Rules, be filed and enforced in the same 
          manner as a judgment or not in excess of twenty percent per month 
          thereof may be offset against any rent thereafter due the owner.

          FH 510073 RO

          If the owner has already complied with the Rent Administrator's 
          order and there are arrears due to the owner as a result of the 
          instant determination, the tenant shall be permitted to pay off the 
          arrears in twenty four equal monthly installments.  Should the 
          tenant vacate after the issuance of this order or have already 
          vacated, said arrears shall be payable immediately.

          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 in part, and, that the order of the Rent 
          Administrator be, and the same hereby is, modified in accordance 
          with this order and opinion.  The lawful stabilization rents and 
          the amount of the rent overcharge are established on the attached 
          chart which is fully made a part of this order.  The amount of the 
          rent overcharge through July 31, 1991 is $7,131.25 taking into 
          account the rent arrears owed by the tenant and the lawful 
          stabilization rent effective August 1, 1989 to July 31, 1991 is 


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner


          FH 510073 RO


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