FK510228RO
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. FK510228RO
: DRO DOCKET NO. U000390R
PHIPPS HOUSES SERVICES, INC. TENANT: MARIA DEL CARMEN
GARCIA
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN
PART
On November 7, 1991, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
October 4, 1991, by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York, concerning the housing accommodations known as
600 West 169th Street, New York, New York, Apartment No. 66, 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 in January, 1985 by
the tenant's filing a complaint of rent overcharge. In such
complaint, the tenant stated in substance that she first moved to
the subject apartment on July 1, 1981 at a rental of $380.00 per
month and that she had never been served with a copy of the
apartment registration form.
The owner was served with a copy of the tenant's complaint and
afforded an opportunity to respond. The owner was also directed in
notices from the DHCR dated October 27, 1986, April 27, 1987 and May
6, 1987, to submit proof that the tenant was served with the April
1, 1984 apartment registration. Such proof was specifically stated
to be: Tenant's signature acknowledging receipt of the Apartment
Registration (RR-1 Form) and showing the date of receipt; or U.S.
Post Office "Carrier Route Pre-Sort" service form listing the
apartment number or address of the premises; or U.S. Post Office
"Acceptance of Registered, Insured, C.O.D. and Certified Mail" Form
#PO-3877, signed and dated and listing the tenant's name and
address, including the apartment number. The owner was also advised
that if it was unable to provide proof of service as described
FK510228RO
above, it must submit a complete rental history from April 1, 1980
or the date the last rent controlled tenant vacated the apartment,
whichever occurred later. The owner submitted a rental history from
July 1, 1980, and did not submit the required proof of service of
the RR-1 Form.
In Order Number U000390R, the Rent Administrator determined
that the owner had failed to establish that the subject apartment
was initially registered and failed to submit the required rental
history from April 1, 1980. Accordingly, the Rent Administrator
used established default procedures to establish an initial legal
regulated rent of $283.19 effective July 1, 1981; froze the rent at
$283.19 through June 30, 1989; and found a total rent overcharge of
$43,146.10 from July 1, 1981 through June 30, 1989 including excess
security and treble damages on that portion of the rent overcharge
occurring on and after April 1, 1984.
In this petition, the owner alleges in substance that it did
submit a complete rental history in that the subject apartment was
rent controlled until April 5, 1980 and the July 1, 1980 lease of
the prior tenancy was the first rent stabilized lease for the
subject apartment. In support of such contention, the owner
submitted a moving notice from the managing agent which confirms
that the rent controlled tenant Felix Molina had moved out as of
April 5, 1980; a confirmation of a new stove purchase for the
subject apartment dated June 26, 1980 which states "vacancy new
tenant" and lists the new tenant's name as "Joanne Falciano"; and
reference letters procured by the owner from April - June 1980 from
the banks and employers of three prospective tenants - Falciano,
Pollack, and Ushay - two of whom eventually rented the subject
apartment effective July 1, 1980. The owner's petition did not
address the issue of the failure to establish service of the RR-1
Form on the tenant herein.
In responses to the owner's petition, the tenant stated in
substance that the owner has not established that the subject
apartment was vacant from April 1, 1980 to July 1980; that it is
inappropriate to consider the owner's documentary evidence as it was
not previously submitted; that reasonable attorney's fees be
awarded; and that if the DHCR finds that the Rent Administrator
erred in calculating the maximum legal rent; the DHCR should follow
the rule enunciated in Smitten v. 56 MacDougal Street Co., 167 A.D.
2d 205, 561 N.Y.S. 2d 585 (1st Dept. 1990) and find that the maximum
legal rent is equal to the last rent lawfully charged under rent
control.
In a reply to the tenant's responses dated November 23, 1993,
the owner for the first time submitted alleged proof of service of
the RR-1 Form on the tenant herein. Such proof consisted of a copy
of the RR-1 Form listed as prepared on June 4, 1984 but not listing
the April 1, 1984 rent and listing the apartment as "exempt" rather
FK510228RO
than as rent controlled or rent stabilized; and a copy of a
certified mail form indicating that the tenant herein had signed for
something on September 12, 1984.
The Commissioner is of the opinion that this petition should be
granted in part.
Rent control records for the subject apartment establish that
the last rent controlled tenant was a"Molina" and that he occupied
the subject apartment at least through 1979. Records in the
proceeding herein disclose that the first lease submitted by the
owner for the subject apartment was dated June 26, 1980 and
commenced July 1, 1980 for tenants Falciano, Reydal, and Pollack.
Records also show that the tenant herein moved to the subject
apartment as a subtenant in July, 1981. Based on the evidence
submitted by the owner on appeal that it was considering renting the
subject apartment to two of the three tenants listed above during
the period from April through June 1980, the Commissioner considers
that the owner has established that the first stabilized lease was
the one effective July 1, 1980 and that the apartment was not rented
during the period from April 5, 1980 when the rent controlled tenant
vacated up through June 30, 1980. Accordingly, since in the
proceeding before the Rent Administrator, the owner did submit a
complete rental history from the date of decontrol as confirmed by
rent control records and evidence submitted by the owner on appeal;
the owner cannot be said to have defaulted in its obligation to
submit said rental history. Therefore, the initial lawful
stabilization rent should have been listed as the $380.00 in the
July 1, 1980 lease and not established based on default procedures.
With regard to the April 1, 1984 initial rent registration,
DHCR records indicate that DHCR was served with the initial
apartment registration. However, in her complaint, the tenant
stated that she did not receive a copy of the RR-1 Form as required
and the owner failed to establish service in accordance with one of
the three methods outlined above although afforded an opportunity to
do so in the proceeding before the Rent Administrator. Since this
is not a de novo proceeding, the owner's evidence on this point
during the appeal proceeding cannot properly be considered.
Moreover, the proof submitted on appeal is not sufficient as it does
not consist of one of the three approved methods and the RR-1 Form
submitted on appeal is incomplete - does not list the April 1, 1984
rent nor give any reason why the subject apartment is listed as
exempt. Accordingly, the rent must be frozen at the amount in
effect on April 1, 1984 pursuant to Section 2528.4 of the Rent
Stabilization Code until the owner establishes service of the
initial RR-1 Form on the tenant herein. The late filing of the
registration (in this case service of the RR-1 Form) will result in
the prospective elimination of the penalty (freezing of the rent).
Taking the above factors into account, the Commissioner has
recalculated the lawful stabilization rents and the amount of the
FK510228RO
rent overcharge. The lawful stabilization rents and the amount of
the rent overcharge are set forth on the amended rent calculation
chart attached hereto and made a part hereof.
With regard to the tenant's contention that attorney's fees
should be awarded, it is noted that the tenant did not file a
petition for administrative review of her own and this issue cannot
properly be considered as part of the owner's petition. It is also
noted that the decision in the Smitten case cited by the tenant in
her answer is not applicable to the situation herein. Smitten dealt
with a situation involving a complaint by a first rent stabilized
tenant where the owner had not registered the initial rent with the
DHCR - factors not present in the case at bar.
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
increases.
The Commissioner has determined in this Order and Opinion that
the owner collected overcharges of $9,414.42. This Order may, upon
expiration of the period for seeking review of this Order and
Opinion pursuant to Article Seventy-eight of the Civil Practice Law
and Rules, be filed and enforced as a judgment or not in excess of
twenty percent per month of the overcharge may be offset against any
rent thereafter due the owner. Where the tenant credits the
overcharge, the tenant may add to the overcharge, or where the
tenant files this Order as a judgment, the County Clerk may add to
the overcharge, interest at the rate payable on a judgment pursuant
to Section 5004 of the Civil Practice Law and Rules from the
issuance date of the Rent Administrator's Order to the issuance date
of the Commissioner's Order.
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
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
FK510228RO
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.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
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