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 NOS.: FB 410460-RT
: FE 410272-RO
DRO DOCKET NO.: DJ 410049R/P
KYLE D. YORK, TENANT and (L3117857-R)
FRED MENGONI, OWNER, PETITIONERS :
------------------------------------X OWNER:FRED MENGONI
ORDER AND OPINION GRANTING IN PART, TENANT'S PETITION FOR ADMINISTRATIVE
REVIEW, AND DENYING OWNER'S PETITION
On May 21 and 24, 1991, the above-referenced tenant and owner,
respectively, filed petitions for administrative review of the order of
April 26, 1991, docketed at the above-referenced District Rent
Administrator number, in which said Administrator had determined that the
tenant had been overcharged for the housing accommodation known as
Apartment 3C at 243 East 81st Street, New York City.
The Commissioner notes that this proceeding was initiated prior to April
1, 1984. Sections 2526.1(a)(4) and 2526.1(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,
This proceeding originated on March 23, 1984, when the tenant filed a
Complaint of Rent Overcharges with the predecessor of the D.H.C.R. The
owner's answer contained photocopies of purported leases for the subject
premises, and based thereon the Administrator determined on November 10,
1986, that the tenant had not been overcharged. The tenant sought
administrative review a month later, contending that leases submitted by
the owner were not genuine. In his petition the tenant stated that one
Daniel Leon Magida had resided in the subject apartment in 1979 and 1980.
(The owner had not listed Magida in the rental history he had provided,
and had submitted leases, covering 1979 and 1980, in the names of other
purported tenants.) In opposing that petition the owner stated he had no
record of a Daniel Leon Magida having occupied the subject premises.
On October 12, 1989, the Commissioner remanded this proceeding to the
Administrator so that a hearing might be held to determine the rental
history of the apartment.
That hearing took place on May 15, June 28 and August 2, 1990, the owner
appearing personally and by counsel. On February 12, 1991, the tenant
wrote to the hearing officer that he had renewed his lease, for a rental
DOCKET NUMBER: FB 410460-RT & FE 410272-RO
of $961.58, as of February 1. On February 14, 1991, the hearing officer
related, in a seven-page report to the Administrator, that based on the
testimony of six witnesses and on exhibits placed in evidence, (a) at
least three of the leases submitted by the owner were false, (b) the owner
had failed to submit leases for three actual tenants who had written
leases and (c) the owner had known the aforementioned leases to be false
when he had submitted them to the D.H.C.R.
The aforementioned order, here appealed, followed. Based on the hearing
officer's finding that the leases submitted were not genuine, the
Administrator found therein that despite a D.H.C.R. request, on pain of
default, for complete copies of leases or rent records, the owner had
failed to provide a full rental history of the subject apartment. The
Administrator therefore utilized the Section-42A default procedure,
determining thereunder the legal regulated rent and the net overcharge
through January 31, 1990.
In appealing that order, the owner argues that the delay between the
hearing and the issuance of the order denied him due process of law. He
further argues that the Administrator erred in stating that the hearing
had resulted in a conclusion that the leases he had submitted were
"fraudulent" rather than "genuine." The tenant responds by stating inter
alia that the owner "has chosen to focus only on the . . . evidence
presented during the first day . . . while completely ignoring the
detailed testimony and evidence presented in two full days of
continuances." (Emphasis deleted.)
The tenant's petition assigns error to the Administrator's determinations
not to (1) award a refund covering overcharges though the date of the
order and (2) award costs and attorney's fees against the owner.
The Commissioner, having carefully considered the record as it pertains to
the appeals herein, is of the opinion that the owner's petition should be
denied, and the tenant's denied as to costs and fees, but granted as to
the period covered by the overcharge calculation.
The owner, though represented by counsel, presents no authority for his
proposition that the amount of time between the hearing and the issuance
of the order denied him property without due process of law. The
Administrator's order cannot therefore be disturbed based on delay between
the hearing and the issuance date.
As to the owner's other claim herein, while the tenant is clearly correct
in pointing out that the owner has simply ignored the second and third
days of the hearing, it is also obvious (1) that the owner's real quarrel
is with the Administrator's statement that fraud has been found as a
result of the hearing and (2) that the owner disagrees with that statement
because he is simply unaware of the hearing officer's report. Fraud was
of course found therein; the report, however, was not sent to the parties,
so that the remaining question is whether the fact that the owner was not
sent a post-hearing report constitutes prejudicial error.
The owner's due process rights encompassed adequate notice and a fair
hearing. His petition makes no complaint about notice. Nor does the
owner argue that the hearing was conducted in an unfair manner.
DOCKET NUMBER: FB 410460-RT & FE 410272-RO
Hearing reports--internal documents addressed to the Administrator--are
not rquired to be sent to the parties. This petitioner received the
requisite notice of hearing, and since agency policy did not dictate
sending him a copy of the report in question, there was no error in the
fact that was not done.
In sum, because due process of law was not denied to the owner by the
hiatus between the hearing and the time the order was issued, and because
the Administrator correctly cited the hearing officer's finding regarding
fraud, there is no merit to the owner's appeal.
The tenant's petition has, as mentioned above, one meritorious ground.
The petition asserts, without contradiction, that through the tenant's
opening statement, direct testimony and documentary evidence and the
owner's cross-examination testimony, the existence of a new lease of
February 1, 1990, was made known to the hearing officer. And as mentioned
above the tenant did write to that officer in February 1991, stating he
had signed yet another lease (for $961.58). The record further reflects
that within a week of the issuance of the order herein, the tenant wrote
to the Administrator, requesting that the latter recalculate the
overcharge by including the fifteen months subsequent to the cutoff date
employed in the order. The above makes clear that the Administrator was
on notice to inquire into the rental history herein from the time the
matter went to the hearing officer. His failure so to inquire was error.
The Commissioner has therefore assembled the rental history omitted from
the order and has calculated the overcharge on the chart attached to this
order and opinion and hereby made a part hereof.
The remaining assignment of error is that the Administrator erred in not
assessing the tenant's costs and attorney's fees against the owner.
Pursuant to Section 2526.1(d) of the Rent Stabilization Code, the
assessment of attorney's fees is discretionary with the Administrator.The
Commissioner finds that the petitioner did not adequately substantiate all
of said costs and fees, and therefore that the assessment thereof is not
appropriate in this case.
In sum, the only determination of the Administrator that the Commissioner
will not sustain, is that of computing overcharges through January 1990
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
DOCKET NUMBER: FB 410460-RT & FE 410272-RO
ORDERED, that the owner's petition be and the same hereby is denied, and
that the tenant's petition be, and the same hereby is granted to the
extent of recalculating the overcharge as set forth above and on the
attached chart; the Administrator's order is otherwise affirmed.
This order may be docketed and enforced in the same manner as a judgement
of the Supreme Court, in the amount of the total overcharge herein, which
JOSEPH A. D'AGOSTA