FH 510073 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. FH 510073 RO
: DISTRICT RENT OFFICE
Big River Realty Corp., DOCKET NO. ZU-004937 R
TENANT: Bruce C. Piersawl
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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
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 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
owner.
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
hereof.
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
adjustment.
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
$755.21.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
FH 510073 RO
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