GA 610296-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
------------------------------------X
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. GA 610296-RO
: DISTRICT RENT OFFICE
Combined Associates, c/o DOCKET NO. ZAG-610073-R
Spring & Davis Real Estate
Mgmt., TENANT: (The Estate of)
Andrew Hammer
PETITIONER :
------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On January 28, 1992, the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on January 8, 1992 by
the District Rent Administrator, 92-31 Union Hall Street, Jamaica,
New York concerning the housing accommodations known as 2165 Chatterton
Avenue, Bronx, New York, Apartment No. 8E wherein the Rent Administrator
determined the tenant's fair market rent appeal.
The issue herein is whether the Administrator's order was warranted.
The applicable sections of the Law are Section 26-516 of the Rent
Stabilization Law and Sections 2522.3 and 2523.1 of the current Rent
Stabilization Code.
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 July, 1986 of
a rent overcharge complaint by the tenant, in which he stated that he
had commenced occupancy on November 15, 1985 at a rent of $435.00 per
month, pursuant to a lease commencing December 1, 1985, and that the
prior tenant was paying a rent of approximately $200.00.
Among the documents submitted by the owner in answer was a copy of a DC-
2 notice of statutory decontrol, signed by Arthur Davis and stating "DC-
2 notice served by Thomas Tedeschi, Manager, Nov. 1, 1985," and a Senior
Citizen Rent Increase Exemption ("SCRIE") Order and Tax Exemption
Certificate. The owner later submitted an affidavit of discontinuance
and withdrawal of the tenant's complaint, dated September 6, 1991 and
purportedly made by Matthew Hammer, administrator of the tenant's
estate. It was signed by Charles Davis of Combined Associates and
notarized by Thomas P. Tedeschi. In response, Michael Hammer stated
that he and his brothers did not wish to withdraw the complaint, and
that "there is NO Matthew Hammer."
In an order issued January 8, 1992 the Administrator set the fair market
rent at $323.23 per month, this being a 20% Special Guidelines Order No.
GA 610296-RO
17 increase over the 1984 Maximum Base Rent ("MBR"), without any fuel
cost adjustment since the 1985 adjustment had been suspended by a DHCR
order.
In this petition Thomas P. Tedeschi, Managing Agent for Combined
Associates, contends in substance that the tenant's complaint was time-
barred because it was not made within 90 days of the physical delivery
of the DC-2 notice to the tenant on November 1, 1985; that the tenant's
statement in his complaint did not constitute a legally proper
allegation of a rent overcharge or of a rent in excess of the Fair
Market Rent; that the Fair Market Rent should have been determined on
the basis of the 1985, not 1984, MBR plus allowable fuel cost
adjustments; and that the tenant's action is time-barred by Civil
Practice Law and Rules Section 213(a), which provides that an action on
a residential rent overcharge shall be commenced within four years of
such overcharge, since a complaint to the DHCR does not constitute legal
action to satisfy the statute of limitations and since it has been more
than five years since the accrual of the tenant's cause of action.
The Commissioner is of the opinion that this petition should be denied.
Sections 2522.3 and 2523.1 of the Rent Stabilization Code, applicable to
complaints filed on and after April 1, 1984, provide in pertinent part
that the first tenant of an apartment previously subject to the Rent
Control Law may file a fair market rent appeal within 90 days of being
mailed, by certified mail, a prescribed notice form (DC-2) setting forth
the right to appeal the initial legal regulated rent.
On May 7, 1992 the DHCR requested the owner to provide proof of service
of the DC-2 notice. In a response submitted on May 27, 1992, the owner
did not submit proof of service of the DC-2 notice by certified mail.
The proof of service submitted by the owner consisted of an affidavit
which stated in part "I, Thomas Tedeschi being sworn, say . . . On
November 1, 1985 I served the within DC-2 . . . by delivering a true
copy thereof personally to each person named below at the address
indicated." The tenant's name and the address of the subject apartment
were then listed. Thomas Tedeschi's unnotarized signature then appears
below the date of November 1, 1985. On the line where the affiant's
signature should have appeared is the purported signature of Andrew
Hammer, with his name typed underneath. Even if this were the tenant's
signature it would not constitute adequate proof of delivery of the DC-
2, since the tenant is not specifically acknowledging receipt.
Further, in response to an earlier August 4, 1988 request to "[p]lease
submit a copy of the DC-2 notice along with proof of service to the
complaining tenant Andrew Hammer," the owner submitted only the DC-2
notice.
The owner also submitted a copy of the DC-2 notice in 1992. Next to the
signature of Arthur Davis is the date "2/86," which might be thought to
refer to the month that Mr. Davis signed the form. However, this date
of February, 1986 is on a copy of a form the original of which was
supposedly given to the tenant on November 1, 1985. In addition, the
copy of the DC-2 form received from the owner on September 2, 1988 did
not have the "2/86" date, although in every other respect it appears to
be the same as the one received in 1992. It is hard to see how a DC-2
with a contemporaneous date of February, 1986 could be delivered to the
GA 610296-RO
tenant in 1985 and yet not have the date appear on the form until 1992.
The "proof of service" signed by Thomas Tedeschi states that he
personally delivered the DC-2 to the tenant on November 1, 1985 at the
subject apartment. The tenant's complaint stated that he did not move
in until November 15, 1985 pursuant to a lease commencing December 1,
1985.
Based on the above, the Commissioner finds that the owner has failed to
prove service of the DC-2 notice so as to start the running of the 90
day period to file a fair market rent appeal. Therefore, the
Commissioner finds that the tenant's complaint is effective to challenge
the initial legal regulated rent.
The Commissioner notes that the Maximum Base Rent listed by the owner on
the DC-2 form was incorrect. The 1984-85 Maximum Base Rent was $247.82,
not $435.00 as stated by the owner. (The tenant's initial rent was
$435.00). The DC-2 form was designed to give a tenant information to
use in deciding whether to file a fair market rent appeal. A tenant
relying on the information furnished by the owner in this case would
have little reason to file such an appeal, since the fair market rent
was stated to be calculated above the rent actually paid by the tenant.
Regarding the owner's contention that the tenant's complaint does not
constitute a legally proper allegation of a rent in excess of the fair
market rent, the tenant was clearly challenging the lawfulness of his
rent. When a tenant is the first tenant after decontrol, such challenge
is actually a challenge against the initial legal regulated rent,
otherwise known as a fair market rent appeal, and it is within the
DHCR's discretion to recognize and process it as such. In addition,
this order has found that the owner has not proven the service of a DC-2
form on the tenant, notifying him that he was the first stabilized
tenant and had the right to file a fair market rent appeal. The owner
should not be allowed to succeed in its claim that the tenant [unaware
of his status as the first stabilized tenant] should not be allowed to
have his complaint treated as a fair market rent appeal.
Regarding the contention that the Fair Market Rent should have been
determined on the basis of the 1985, not 1984, MBR plus allowable fuel
cost adjustments, the Commissioner notes that MBR orders are issued on
a two year cycle, and that Special Guidelines Order Number 17 used by
the Rent Administrator provides that for dwelling units subject to Rent
Control on September 30, 1985, which subsequently became vacant after
September 30, 1985, the Special Guidelines amount to be utilized is
determining the fair market rent is 20% above the sum of the 1984-85
maximum base rent, as it existed or would have existed, plus the current
allowable fuel cost adjustments as established on Rent Control forms.
No fuel cost adjustment is allowed because Order No. ZBC0850001-FR
suspended the total accumulated fuel cost adjustment for 1985 due to the
owner's failure to file a timely fuel cost decrease report. Accordingly
the 1984-85 MBR was correctly used to establish the fair market rent in
this case.
GA 610296-RO
Regarding the owner's contention that an action on a residential rent
overcharge has a statute of limitations of four years: Civil Practice
Law and Rules Section 213(a), which provides that "[a]n action on a
residential rent overcharge shall be commenced within four years of such
overcharge", is not relevant to this proceeding since it is not an
"action". CPLR Section 101 provides that" [t]he civil practice law and
rules shall govern the procedure in civil judicial proceedings in all
courts of the state and before all judges, except where the procedure is
regulated by inconsistent statute. "Generally speaking, the DHCR and
the Courts have concurrent jurisdiction to decide complaints filed under
the Rent Stabilization Law and Code, although the Courts will usually in
the first instance defer to the administrative agency in its areas of
expertise. For his remedy the tenant chose the administrative agency
rather than the Courts. Any resort the tenant's estate might now have
to the Courts regarding the lawful rent would not be an action on the
lease contract, but rather a CPLR Article 78 petition against the
administrative agency determination. While there is a time limit to
file such a legal proceeding, the time runs from the date of the
agency's order and not from the date of either an overcharge or of an
administrative complaint.
Because a senior citizen rent increase exemption (Docket No. 210710) was
effective from at least January 1, 1988 to November 30, 1988, a copy of
this order is being sent to the N.Y.C. Department for the Aging, SCRIE
Division, so that an appropriate adjustment can been made in the real
estate tax abatement the owner has been granted, if so warranted.
The owner is cautioned to adjust the rent, in leases after those
considered by the Administrator, to amounts no greater than that
determined by the Administrator's order plus any lawful increases, and
to register any adjusted rents with the Administrator's order being
given as the reason for the adjustment. A copy of this determination is
being mailed to the tenant-in-occupancy.
If the owner does not take appropriate action to comply with this order
within sixty days from the date of issuance of this order, the tenant's
estate may bring an appropriate action in a court of competent
jurisdiction.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, denied and that
the District Rent Administrator's order be, and the same hereby is,
affirmed. The lawful stabilization rent is $323.00 per month in the
lease from December 1, 1985 to November 30, 1987.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
|
