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. FC410230RO
: DRO DOCKET NO. BB410035RP
LINCOLN PLAZA ASSOCIATES
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On March 20, 1991, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
February 15, 1991, by the Rent Administrator, 92-31 Union Hall
Street, Jamaica, New York, concerning the housing accommodations
known as 20 West 64th Street, New York, New York, Apartment No. 40P,
wherein the Rent Administrator determined that the owner had
overcharged the tenant.
The Commissioner notes that this proceeding was filed
prior to April 1, 1984. Sections 2526.1 (a) (4) and 2521.1 (d) of
the Rent Stabilization Code (effective May 1, 1987) governing rent
overcharge and fair market rent proceedings provide that
determination of these matters be based upon the law or code
provisions in effect on March 31, 1984. Therefore, unless otherwise
indicated, reference to Sections of the Rent Stabilization Code
(Code) contained herein are to the Code in effect on April 30, 1987.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2526.1 of the current Rent Stabilization Code
and Section 42A of the prior 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 in March 1984, by the
tenant's filing of a complaint of rent overcharge in which the
tenant stated in substance that he first moved to the subject
apartment on June 1, 1979 at a rental of $1150.00 per month.
The owner was served with a copy of the tenant's complaint and
directed to submit a full rental history from the June 30, 1974 base
date. The owner failed to comply with such directive and on August
11, 1986, the Rent Administrator, under Docket L3112011R, issued an
order finding a rent overcharge of $22,969.10 based on the owner's
default. The overcharge was calculated through June 1, 1984 on a
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FC410230RO
finding that the subject apartment was converted to a condominium
effective June 1, 1984. In such docket, the owner was listed as
Milford Management and the prior owner was listed as Lincoln Plaza
Assoc. - the owner herein.
On September 12, 1986, the tenant herein, under Docket
AI410039RT, filed a petition for administrative review in which the
tenant stated that it did not purchase the subject apartment. On
January 8, 1987, the Commissioner issued an order remanding the
proceeding to the Rent Administrator to consider the tenant's
petition as well as anything offered by the owner in the owner's
answer to the petition and in the owner's own petition filed under
Docket AI410186RO.
On September 23, 1986, Milford Management Corp. filed a
petition for administrative review under Docket AI410186RO. Said
petition was dismissed on October 24, 1986 as not timely, then
reopened on December 11, 1986 when the owner proved timeliness, and
finally terminated on July 12, 1990 due to a subsequent order issued
by the Rent Administrator on February 24, 1988 under Docket
BB410035RP (issued after the remand of the tenant's petition
AI410039RT).
In the order issued under Docket BB410035RP, the Rent
Administrator again defaulted the owner for the failure to submit a
complete rental history, and found a rent overcharge totalling
$50,486.31 through November 4, 1987 since it was found that the
tenant had purchased the subject apartment under a condominium
conversion plan on November 4, 1987. In this order Milford
Management was listed as the current owner and Lincoln Plaza Assoc.
- the owner herein - was listed as the prior owner. In addition,
the attorney of the owner herein was served with a copy of the
order. DHCR records show that no one filed an appeal against such
order.
Subsequently, the tenant's attorney in a letter dated November
27, 1990, advised that the February 24, 1988 order could not be
enforced as a judgment since Lincoln Plaza Associates was the owner
at all relevant times while Milford Management Corp. was the
managing agent.
On February 15, 1991, the Rent Administrator issued an amended
order under Docket BB410035RP which superseded the February 24, 1988
order and listed Lincoln Plaza Associates as the owner and Milford
Management as the managing agent. In all other respects including
the issuance date of February 24, 1988, the order remained the same.
In this petition against the February 15, 1991 amended order,
Lincoln Plaza Associates alleges in substance that the owner did not
default since it was only required to submit a rental history from
April 1, 1980, pursuant to Section 2526.1 of the Rent Stabilization
Code, that treble damages are not warranted, and that in any event
treble damages were wrongly assessed during a period when a court
determination set a "use and occupancy" amount to be collected.
FC410230RO
In answer to the owner's petition, the tenant stated in
substance that the owner should be barred from contesting the Rent
Administrator's order on the merits since it did not file a timely
appeal to the February 24, 1988 order and that the only issue
appealable from the amended order herein is whether Lincoln Plaza
Associates was the actual owner and such fact is not contested by
the owner in its petition. The tenant further contended that the
Rent Administrator's order is correct on the merits in defaulting
the owner for its failure to submit a full rental history from the
June 30, 1974 base date.
The Commissioner is of the opinion that this petition should be
denied.
DHCR records do not indicate that the owner herein filed a
timely petition for administrative review against the order issued
on February 24, 1988, but merely indicate that the owner filed an
appeal against the correcting order issued on February 15, 1991.
Where a District Rent Administrator issues a correcting order of an
earlier order and the correction does not affect the substance of
the proceeding, the second order does not give a party aggrieved by
the first order, who had failed to appeal the first order, a new
right to file an administrative appeal. (Accord: ART10467K,
ARL10807K). Since the correction involved here, a change in the
amount of time the owner herein owned the subject premises and a
change in listing the managing agent as the managing agent and not
as a new owner, did not affect the substance of the order - the
amount of the overcharge found due - the owner's right to file an
administrative appeal of the substance of the order was not revived.
Moreover turning to the substance of the petition, the owner's
contentions on appeal have no merit.
Section 42A of the former Rent Stabilization Code requires that
an owner retain complete records for each stabilized apartment in
effect from June 30, 1974 (or the date the apartment became subject
to rent stabilization, if later) and to produce such records to the
DHCR upon demand.
Section 26-516 of the Rent Stabilization Law, effective April
1, 1984, limited an owner's obligation to provide rent records by
providing that an owner may not be required to maintain or to
produce rent records for more than four (4) years prior to the most
recent registration, and concomitantly, established a four year
limitation on the calculation of rent overcharges.
It has been the DHCR's policy that overcharge complaints filed
prior to April 1, 1984, are to be processed pursuant to the Law or
Code in effect on March 31, 1984. (see Section 2526.1 (a) (4) of the
current Rent Stabilization Code.) The DHCR has therefore applied
Section 42A of the former Code to overcharge complaints filed prior
to April 1, 1984, requiring complete rent records in these cases.
In following this policy, the DHCR has sought to be consistent with
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the legislative intent of the Omnibus Housing Act (Chapter 403, Laws
of 1983), as implemented by the New York City Conciliation and
Appeals Board (CAB) the predecessor agency to the DHCR, to determine
rent overcharge complaints filed with the CAB prior to April 1,
1984, by applying the law in effect at the time such complaints were
filed so as not to deprive such tenants of their rights to have the
lawful stabilized rent determined from the June 30, 1974 base date
and so as not to deprive tenants whose overcharge claims accrued
more than four years prior to April 1, 1984 of the right to recover
such overcharges. In such cases, if the owner failed to produce the
required rent records, the lawful stabilized rent would be
determined pursuant to the default procedure approved by the Court
of Appeals in 61 Jane Street Associates v. CAB, 65 N.Y.2d 898, 493
N.Y. S. 2d 455 (1985).
However, it has recently been held in the case of J.R.D. Mgmt.
v. Eimicke, 148 A.D.2d 610. 539 N.Y.S. 2d 667 (App. Div. 2d Dept.,
1989). motion for leave to reargue or for leave to appeal to the
Court of Appeals denied ( App. Div. 2d Dept., N.Y.L.J., June 28,
1989. p.25, col.1), motion for leave to appeal to the Court of
Appeals denied (Court of Appeals, N.Y.L.J., Nov. 24, 1989, p.24,
col.4)., motion for leave to reargue denied (Court of Appeals,
N.Y.L.J., Feb. 15, 1990, p.25, col.1), that the Law in effect at the
time of the determination of the administrative complaint rather
than the Law in effect at the time of the filing of the complaint
must be applied and that the DHCR could not require an owner to
produce more than four years of rent records.
Since the issuance of the decision in JRD, the Appellate
Division, First Department, in the case of Lavanant v. DHCR, 148
A.D.2d 185, 544 N.Y.S.2d 331 (App. Div. 1st Dept. 1989), has issued
a decision in direct conflict with the holding in JRD. The Lavanant
court expressly rejected the JRD ruling finding that the DHCR may
properly require an owner to submit complete rent records, rather
than records for just four years, and that such requirement is both
rational and supported by the Law and legislative history of the
Omnibus Housing Act.
Since in the instant case the subject dwelling unit is located
in the First Department, the owner was required to submit a rental
history from June 30, 1974. Since the owner has failed to submit a
complete rental history from June 30, 1974 and only submitted a
rental history from 1977, the Rent Administrator's order finding a
rent overcharge utilizing DHCR default procedures was warranted.
With regard to treble damages, the owner has submitted no evidence
to disclose that the overcharge was not willful. Accordingly, the
imposition of treble damages was warranted. With regard to the
owner's contention that there could be no treble damages during the
period the housing court determination found that the tenant would
pay a certain amount as "use and occupancy", the Commissioner notes
that such determination was without prejudice to the rights of the
owner and the tenant and thus this court order did not preclude the
imposition of treble damages on rent overcharges. Therefore the
Rent Administrator's order was warranted.
FC410230RO
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.
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, denied, and, that the order of the Rent
Administrator be, and the same hereby is, affirmed.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
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