DOCKET NO.: SJR 6784, FF410070RO
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 SJR 6784
APPEAL OF ADMINISTRATIVE REVIEW
: DOCKET NO.: FF410070RO
BENJAMIN TUCKER
: DISTRICT RENT OFFICE
DOCKET NO.: CK410436R
: TENANT: ROBIN McKAY
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On June 7, 1991, the above-named owner filed a Petition for
Administrative Review against an order of a Rent Administrator,
dated May 10, 1991, in which the Administrator determined that the
owner of the housing accommodations known as apartment 49 at 320
Manhattan Avenue, New York City, had overcharged the tenant
thereof.
Subsequently the owner petitioned the Supreme Court, pursuant
to Article 78 of the Civil Practice Law and Rules, to mandate this
Division to make an expeditious determination of the administrative
appeal, and pursuant to stipulation the court has issued such a
mandate.
The proceeding originated with a 1988 Tenant's Complaint of
Rent Overcharge and/or Excess Security Deposit. The envelope in
which that complaint was mailed to the owner was returned to the
DHCR marked "insufficient address."
The ensuing order, here appealed, states inter alia: that one
Paul Hoskins resided in the subject accommodations from March,
1985, through the end of that year; that the lawful rent must be
"frozen" at $429.41 from April 1, 1987, to the end of the period
covered by the order, due to the owner's failure to register in
1987 (notwithstanding the fact that a "rent of $449.57 was
previously set under docket number ZAD510512R"); and that, because
DOCKET NO.: SJR 6784, FF410070RO
the evidence shows the overcharge herein to have been willful,
treble damages would be imposed. A total overcharge including
treble damages of $32,568.56 was found for the period from
January 1, 1988 to May 31, 1991.
The instant petition attacks that order as follows. (1) The
owner's name thereon should be "Tucker Associates." (2) "Our
records indicate that the tenant . . . never filed an overcharge
complaint. The former tenant . . . McKnight, apparently filed one
against the former owner under Docket No. AD510512-R. * * * As the
present tenant never filed an overcharge complaint, one cannot be
awarded to her under a docket number never served upon this
landlord." (3) The prior owner represented to the owner, in
writing, that the rents in the building were lawful. Petitioner
therefore "cannot be guilty of any overcharge as it did not set an
improper rent and certainly cannot be said to be willful." (4)
"Paul Hoskins, the president of the former owner, was also a tenant
at the premises as found by the DHCR." The first rent charged
after that "owner's vacatur" was properly determined as the market
rent and the first tenant after the owner's departure did not file
a fair market rent appeal. 5) The owner did register for 1987, so
that the Administrator erred in freezing the rent. (6) A Housing-
Court stipulation between the parties, dated June 14, 1989 ( a copy
of which is enclosed with the PAR), gave the tenant a $150 rental
credit, for which "landlord must be given credit" now. (7) The
order states that a rent of $449.57 was set in the prior docket
AD510512R so that the Rent Administrator herein erred in
determining a lawful stabilization rent lower than that.
After careful consideration of the record, the Commissioner is
of the opinion that this petition should be granted in part.
Both the record herein and other DHCR records show clearly
that the petitioner was a managing agent for Tucker Associates at
all relevant times. He signed this PAR, moreover, as "partner."
The Rent Stabilization Code includes in its definition of "owner,"
an "agent" of a fee owner. Because both a managing agent and a
partner are agents of an owner/partnership, the Administrator did
not err in using petitioner's name in the caption.
Because the record supports the contention that the owner was
not originally served with the tenant's complaint, the Commissioner
has caused such service to be made, allowing petitioner adequate
time for any additional response regarding the issues herein.
(Petitioner has made no additional submission.)
The fact that the prior owner represented in writing that the
rent was lawful may give the owner rights enforceable in court
against that prior owner, but cannot excuse the current owner from
DOCKET NO.: SJR 6784, FF410070RO
its obligation to refund the instant overcharges. Rather than
relying on such representations, an owner must determine that the
rents are lawful, and must adjust those that are not. The owner is
also charged with a knowledge of the pertinent rules of rent
regulation, so that if the owner charges rents that are clearly
inconsistent with those rules, the owner is liable for refunding
the overcharges in triplicate. That is the case with the owner
herein, regardless of the actions of his/its predecessor.
As to the purported residence of the prior owner, or agent
Paul Hoskins, petitioner presents no authority mandating a free
market rent after an owner occupancy that did not span the "base
date." The rent records in this case show prior tenant Glenda
Simon occupied the subject apartment on the April 1, 1984 base date
at a rental of $355.24 and that the alleged prior owner occupied
the subject apartment at most from January 1, 1986 to December 31,
1987. Moreover, the prior owner itself in annual registration
forms listed Paul Hoskins as a tenant. Accordingly, the
Administrator did not err in not allowing a free market rental in
the next tenant's lease.
Turning to the Administrator's freezing of the rent, DHCR
records reflect that the owner did in fact register in and for the
year 1987. Instead of the frozen figure of $429.41, then, (a) the
lawful rental under the complainant's first lease (running from
January 1, 1988 through December 31, 1989), was 16.5 percent higher
than that, i.e., $500.26, under Guidelines Board Order Number 19,
and (b) the tenant's other lease herein, commencing on January 1,
1990, was another 9 percent higher, or $545.28, under Order Number
21. With actual rents of $666.89 for 24 months under the first
lease and $726.91 for 17 months under the second, the actual
overcharge was $7086.83, which must be tripled, and then added to
the excessive security deposited ($181.63), to arrive at the
damages payable to the tenant herein: a total of $21442.12.
Regarding the Housing Court stipulation for a $150 credit, it
appears from the copy provided to have been part of a comprehensive
settlement of a nonpayment proceeding brought by the owner. It is
stipulated additionally therein that the owner is to make certain
repairs. As the $150 abatement thus appears to be for service
deficiencies, the Commissioner will not subtract it from the rent
paid by the tenant, in determining the overcharge herein.
Petitioner's final contention is that a rental figure that the
order recites as having been set in a previous order cannot now be
altered. Inspection of DHCR records reveals, however, that no
order has in fact been issued under Docket Number ZAD510512R. The
Administrator's mistake in that regard, then, has not caused any
DOCKET NO.: SJR 6784, FF410070RO
error in computing the overcharge herein.
In sum the only changes needed in the Administrator's order
are those set forth above pertaining to the frozen post-1987 rents.
The owner is directed to reflect the findings and
determinations made in this order on all future registration
statements, including those for the current year if not already
filed, citing this Order as the basis for the change. Registration
statements already on file, however, should not be amended to
reflect the findings and determinations made in this order. The
owner is further directed to adjust subsequent rents to an amount
no greater than that determined by this order plus any lawful
increase.
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 is permitted to pay
off the arrears in 24 equal monthly installments. Should the
tenant vacate or have vacated, the arrears shall be payable
immediately.
This order may, upon 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 more than 20 percent per month thereof
may be offset against any rent thereafter due the owner.
THEREFORE, in accordance with Rent Stabilization Law and Code,
it is
ORDERED that this petition be, and the same hereby is, granted
to the extent set forth above. The Administrator's order is hereby
modified to the same extent, leaving, as of May 31, 1991, a total
overcharge of $21,442.12 and a lawful rent of $542.28 monthly and
deleting any reference to docket ZAD510512R.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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