Docket Nos. FB210189RO and FI210057RO
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
APPEALS OF DOCKET NOS. FB210189RO
and FI210057RO
DISTRICT RENT
MYRIAM BUSTAMANTE, ADMINISTRATOR'S DOCKET
NOS. CJ210348R and
KC000499AD
PETITIONER
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW,
FILED UNDER DOCKET NO. FB210189RO; AND ORDER AND OPINION GRANTING
PETITION FOR ADMINISTRATIVE REVIEW IN PART, FILED UNDER DOCKET NO.
FI210057RO
On February 19, 1991, the above-named landlord filed a
petition for administrative review, under Docket No. FB210189RO, of
an order issued on January 15, 1991 by an Administrator concerning
the housing accommodation known as Apartment 2L, 146 20th Street,
Brooklyn, New York. On September 12, 1991, the above-named
landlord filed a petition for administrative review, under Docket
No. FI210057RO, of an order issued on August 8, 1991 by an
Administrator concerning the above-mentioned housing accommodation.
Since the petitions involve common questions of law and fact,
the Commissioner deems it appropriate to consolidate the
proceedings for disposition herein.
The Commissioner has reviewed all of the evidence in the
record and has carefully considered that portion of the record
relevant to the issues raised by the administrative appeals.
The subject tenant filed an overcharge complaint, dated August
23, 1988.
To his complaint the subject tenant attached an affidavit
sworn to on August 23, 1988. In his affidavit the subject tenant
asserted, among other things, that he initially resided in
Apartment 1R, at a monthly rent of $100.00; that in March, 1985,
the subject tenant was informed by the prior landlords that they
needed the above-mentioned apartment "for their relatives," and
Docket Nos. FB210189RO and FI210057RO
that those landlords informed the subject tenant that he had to
"move upstairs to Apt. 2L," and that when the tenant moved into
Apartment 2L his rent was increased to $300.00 per month; that the
tenant moved and paid the above-mentioned rent increase because he
was not aware of his rights as a rent regulated tenant, and that he
thought that he would be evicted if he didn't move.
The subject tenant also attached to his complaint, among other
things, copies of his rent receipts for the period from November,
1984 through February 28, 1985, which noted that during the above-
mentioned period the subject tenant resided in Apartment 1R, and
paid a monthly rent of $100.00; and he attached some copies of rent
receipts for the period from March 1, 1985 through October 31,
1986, which noted that during the above-mentioned period the
subject tenant resided in Apartment 2L, and paid a monthly rent of
$300.00.
On November 7, 1988, the rent agency mailed to the subject
landlord a copy of the tenant's complaint, and a notice directing
the landlord to submit an answer which should include
"substantiating proof" for all rent increases including, among
other things, the installation of new equipment and major capital
improvements (M.C.I.).
The subject landlord submitted an affidavit sworn to on
November 30, 1988 in which she asserted, among other things, that
in March, 1985 the prior landlords "told tenant they needed his
apartment for their relatives, and asked tenant to move upstairs to
Apt. 2L, where he lived until he died Nov. 12, 1988," and that she
believed that the tenant had been paying the legal rent.
On January 30, 1989, the subject tenant's attorney submitted
a letter which stated that: "Please substitute Michael Polonis as
Administrator for the Estate of the tenant, who died on November
12, 1988."
On December 11, 1990, the Administrator mailed to the parties
a "Notice of Commencement of Proceeding to Determine Facts or Fix
Maximum or Legal Regulated Rent." In the above-mentioned notice
the Administrator proposed to determine the status and the legal
rent of the subject apartment, and that the Administrator directed
the parties to file an answer to the proposed action within twenty
days of the above-mentioned date.
In the subject landlord's response, dated December 31, 1990,
she alleged, among other things, that she does not possess the
subject apartment's rent history prior to her acquisition of title
to the subject building on June 24, 1987, except for a copy of the
1985 apartment registration; and that in the contract of sale of
the subject building the prior landlord represented that all of the
apartments were decontrolled.
Docket Nos. FB210189RO and FI210057RO
In the subject tenant's response, dated December 31, 1990, he
asserted, among other things, that his move from Apartment 1R to 2L
was involuntary; that he received a letter from the prior
landlord's attorney (the tenant stated that the name of the tenant
in the letter was incorrect) which stated that: "Also be advised
that your apartment is decontrolled, and landlord will seek
possession of your apartment in the near future."
To his response the subject tenant attached a copy of the
above-mentioned letter, dated October 17, 1984, which was addressed
to "Mr. Eddie Louis" in Apartment 2 of the subject building.
In the order under review herein issued on January 15, 1991
under Docket No. CJ210348R, the Administrator stated that:
Our records disclose that an application for late
enrollment with the Rent Stabilization Association was
denied and, therefore, by operation of law all units in
subject premises became subject to the New York City Rent
& Eviction Regulations (Rent Control) as of May 22, 1984.
Furthermore, the Administrator's order determined that the subject
apartment's maximum rent should be determined in the proceeding
then pending before the rent agency under Docket No. KC000499AD.
On July 10, 1991, the Rent Administrator mailed to the parties
a proposed order for the proceeding under Docket No. KC000499AD.
In the proposed order, the Administrator directed the subject
landlord, among other things, to submit proof that the subject
building was properly registered with the Rent Stabilization
Association (R.S.A.) prior to April 1, 1984, as the rent agency's
records show that the subject building was never registered with
the R.S.A.
In the order under review herein issued on August 8, 1991
under Docket No. KC000499AD, the Administrator noted that on May
22, 1984 the rent agency issued an order denying the landlord's
application to file a late registration with the R.S.A., and that
the subject landlord did not respond to the aforementioned
Administrator's proposed order. In the above-mentioned order, the
Administrator determined that the subject tenant moved from
Apartment 1R to Apartment 2L "under duress and strictly for the
convenience and financial benefit of the owner"; that "it is
determined that the first rent in apartment 2L for subject tenant
must remain at $100 per month, the same rent paid by the tenant
when he occupied apartment 1R"; that the subject landlord had
collected rent in excess of the legal rent, and that the
Administrator computed total overcharges in the amount of
$27,150.00, including treble damages, from April 1, 1985.
In the subject landlord's petition, filed under Docket No.
FB210189RO, she asserts, among other things, that a proceeding to
Docket Nos. FB210189RO and FI210057RO
establish an apartment's rent is "contrary to law", that she did
not receive notice of the then pending proceeding under Docket No.
KC000499AD; that the Administrator's order issued under Docket No.
CJ210348R "refers to a denial for late enrollment by RSA, but fails
to state when or by whom alleged application for late enrollment
was made," and that a certified copy of the rent agency's records
"disclosed that five apartments had been decontrolled between
7/19/84 and 3/12/85."
To her petition the subject landlord attaches a certified list
from the rent agency of the subject housing accommodations rental
status as noted in the rent agency's records. In the list, it is
noted that a decontrol report for the subject apartment was filed
on March 12, 1985, pursuant to former Section 2(f)(17) of the Rent
and Eviction Regulations.
In the landlord's petition, filed under Docket No. FI210057RO,
she alleges, among other things, that the tenant had interposed two
counterclaims against the subject landlord in Civil Court
concerning the same subject matter; that, based on the above-
mentioned, the tenant "had elected his remedies"; that "the
administrator of tenant's estate has no standing herein, has no
personal knowledge of the facts, and the tenant's estate has
sustained no pecuniary damage or loss"; that the Administrator
should have conducted a hearing "requiring the presence of the
prior owners, in order to properly determine the questions
involved" in this proceeding; that when she purchased the subject
building the seller represented herself to be a member in good
standing of the R.S.A; that, the landlord states, "neither I nor my
attorney received the alleged proposed order allegedly issued on
July, 10, 1991"; that, as the landlord asserts, she did not have an
opportunity to be heard in the proceeding under Docket No.
KC000499AD, and that the reference to the Rent Stabilization Law
and Code by the Administrator in the order issued under the above-
mentioned docket number was not applicable as the purpose of that
proceeding was to establish the rent pursuant to the Rent Control
laws and regulations.
In the subject tenant's response, dated November 5, 1991, he
asserts, among other things, that the tenant raised his overcharge
claim as a counterclaim in the landlord's eviction proceeding in
the Civil Court, and that "no determination has ever been made by
the Civil Court on the rent regulatory status or rent amount."
After careful consideration, the Commissioner finds that the
landlord's petition for administrative review filed under Docket
No. FB210189RO should be denied; and that the landlord's petition
for administrative review filed under Docket No. FI210057RO should
be granted in part.
The record reflects that on May 22, 1984, the rent agency
mailed a notice to the then landlord of the subject building which
Docket Nos. FB210189RO and FI210057RO
stated that:
Your application for permission for late enrollment of
residential apartments within the Rent Stabilization
Association was received and assigned the captioned
docket number.
However, a current review of your file reveals that
various requested documents and /or information has not
been supplied by you despite timely requests for same by
this office.
Accordingly, permission for late enrollment must be
denied due to this aforementioned failure and,
accordingly, this building is now deemed to be housing
accommodations subject to standard rent control and is
being referred for establishment of controlled rents.
You will be further advised in that proceeding.
The rent agency's records do not reflect that the
Administrator's determination in the above-mentioned notice was
revoked.
Based on the record, the Commissioner notes that the subject
tenant moved within the subject building from Apartment 1R to
Apartment 2L subsequent to the issuance of the aforementioned
notice which recontrolled the housing accommodations in the subject
building.
The Commissioner points out that it is a long established
policy followed by the Division of Housing and Community Renewal
(D.H.C.R.) and its predecessor agency in administrating the various
statutes providing for the regulation of housing that when a tenant
in a rent controlled apartment surrenders that apartment in
exchange for another apartment at the request of, or for the
convenience of, the landlord, the latter apartment remains subject
to rent control until that tenant vacates.
Based on the record, the Commissioner finds that the subject
tenant was asked by the prior landlords to vacate Apartment 1R
because they needed that apartment for their relatives; that the
subject tenant vacated Apartment 1R and moved into Apartment 2L for
the sole benefit and convenience of the prior landlords; that after
moving into Apartment 2L the subject tenant's monthly rent was
increased from $100.00 to $300.00; that the subject landlord does
not show that the above-mentioned increase in the subject tenant's
monthly rent was lawful, and that the rent agency did not issue an
order granting the prior landlords permission to evict the subject
tenant from Apartment 1R.
Accordingly, the Commissioner finds that the subject apartment
(Apartment 2L) remained subject to the Rent Control laws and
Docket Nos. FB210189RO and FI210057RO
regulations during the tenancy of the subject tenant.
As to the subject landlord's assertion that when she purchased
the subject building she was not aware of the fact that the rent
agency had recontrolled the housing accommodations in the subject
building, the Commissioner finds that that assertion, even if true,
does not change the rental status of the subject apartment. A new
landlord fully undertakes the legal obligations of the prior
landlords, and a new landlord acquires no greater rights than the
prior landlords.
As to the certified copy of the rent agency's records,
submitted by the subject landlord, which listed the subject
apartment as having been decontrolled, the Commissioner points out
that the above-mentioned records were based on decontrol reports
filed with the rent agency by prior landlords of the subject
building.
The Commissioner further points out that a decontrol report is
not an order of the rent agency, but it is a document which the
landlord files with the rent agency for the purpose of informing
the rent agency of a change in the rental status of the apartment,
e.g. a change from rent control to decontrol status.
As a landlord's decontrol report does not have the same effect
as an Administrator's order, the Commissioner is of the opinion
that when it is determined that the allegations in the landlord's
decontrol report are not correct the rent agency, on its own
initiative, may void that decontrol report.
As previously noted, the Commissioner finds that Apartment 2L
had been subject to the Rent Control laws and regulations during
the subject tenant's tenancy. Accordingly, the Commissioner finds
that any decontrol report of the subject apartment filed by the
landlord between the issuance date of the notice which recontrolled
the subject housing accommodations and prior to the death of the
subject tenant should be void.
As to the landlord's assertion that a proceeding to establish
an apartment's rent is "contrary to law," the Commissioner finds
that that assertion is incorrect. Pursuant to Section 2202.22 of
the City Rent and Eviction Regulations, when the legal rent is in
dispute or is in doubt the Administrator may initiate a proceeding
to establish the legal rent.
Accordingly, the Commissioner finds that the landlord's
petition for administrative review filed under Docket No.
FB210189RO should be denied.
Based on the record in this proceeding, the Commissioner finds
that the Administrator's proposed order issued on July 10, 1991
under Docket KC000499AD was mailed to the subject landlord's
Docket Nos. FB210189RO and FI210057RO
attorney.
Even if the subject landlord or her attorney did not receive
the above-mentioned proposed order, the Commissioner is of the
opinion that the subject landlord had an opportunity to respond to
the issues in this proceeding, and that the subject landlord did,
in fact, submit several responses which pertain to the issues
raised in this proceeding.
As previously noted, the Administrator mailed to the subject
landlord a copy of the tenant's overcharge complaint, and a notice
directing the landlord to submit an answer to the aforementioned
complaint; that the subject landlord, did in fact, submit an answer
to the tenant's complaint; that on December 11, 1990, the
Administrator mailed to the parties a notice in which the
Administrator proposed to determine the rental status and the legal
rent of the subject apartment, and that the Administrator directed
the parties to file an answer to the proposed action, and that the
subject landlord, did in fact, submit an answer, dated December 31,
1990, to the above-mentioned Administrator's notice.
Accordingly, the Commissioner finds that the subject
landlord's assertion that she did not have an opportunity to be
heard concerning the issues in this proceeding is without merit.
As to the subject landlord's assertion that the subject tenant
"had elected his remedies" by raising the issue of his overcharge
claim as a counterclaim in the proceeding commenced by the subject
landlord in Civil Court, the Commissioner finds that that assertion
is without merit.
The Commissioner finds that the parties to this proceeding do
not submit a copy of a court order which establishes the subject
apartment's rental status or its legal rent. In the absence of
such a order, the Commissioner finds that the rent agency has
jurisdiction to determine the legal rent and the rental status of
the subject apartment.
The Commissioner finds that the fact that the Administrator
did not conduct a hearing in this proceeding does not warrant a
revocation of the Administrator's orders. Pursuant to the
provisions of Section 2207.5(h) of the City Rent and Eviction
Regulations, in a proceeding before the Administrator, the
Administrator may order a hearing. Accordingly, the Commissioner
finds that ordering a hearing by the Administrator is
discretionary, and not mandatory.
The record reflects that the subject tenant died subsequent to
the filing of his overcharge complaint with the rent agency. The
Commissioner finds that the death of the subject tenant does not
result in the termination of his overcharge complaint.
Docket Nos. FB210189RO and FI210057RO
As to the landlord's assertions pertaining to the estate of
the subject tenant, the Commissioner finds that those assertions
are without merit.
As the subject tenant, and not the estate, filed the
overcharge complaint and the death of the tenant does not result in
the termination of the overcharge complaint, the Commissioner finds
that the estate of the subject tenant has a right to maintain the
action in this proceeding.
Accordingly, the Commissioner finds that the substitution of
the tenant's estate as a party in this proceeding was proper.
The record reflects that the subject tenant's monthly rent was
$100.00 on the issuance date of the aforementioned notice which
recontrolled the housing accommodations in the subject building.
The record further reflects that the landlord of the subject
building did not file an application with the rent agency to
increase the maximum base rent (M.B.R.) of the subject apartment.
The Commissioner finds that the subject landlord does not show
that she was entitled to collect any adjustments in the subject
tenant's rent.
Accordingly, the Commissioner finds that the Administrator's
determination that the subject apartment's maximum rent should be
$100.00 per month should not be disturbed. The Commissioner finds
that the above-mentioned maximum rent is effective from May 22,
1984 through the date of the subject tenant's death.
As the subject apartment was recontrolled, the Commissioner
finds that the Administrator's reference to the Rent Stabilization
Law and Code in the order issued under Docket No. KC000499AD was
not applicable. Accordingly, the Commissioner finds that the
computation of total overcharges and the imposition of treble
damages by the Administrator in accordance with the Rent
Stabilization Law and Code was not proper.
The Commissioner finds that that portion of the
Administrator's order issued under Docket No. KC000499AD which
refers to the Rent Stabilization Law and Code should be revoked.
As the subject landlord, in her petition filed under Docket
No. FI210057RO, pointed out that the reference to the Rent
Stabilization Law and Code in the Administrator's order was
inapplicable, the Commissioner finds that the above-mentioned
petition for administrative review should be granted in part.
If the subject tenant's estate is owed money resulting from
this order and opinion, the Commissioner notes that the tenant's
estate may bring an action against the landlord in a court of
Docket Nos. FB210189RO and FI210057RO
competent jurisdiction, pursuant to Section 2206.8(a)(2) of the
City Rent and Eviction Regulations, within one year after the
landlord fails to pay any refund which is owed to the tenant's
estate. The one year time period is to the calculated from when
the order becomes final. If there is no Article 78 petition of
this order, then the time period is one year after this order
becomes final.
THEREFORE, in accordance with the City Rent and Rehabilitation
Law and the Rent and Eviction Regulations, it is
ORDERED, that the subject landlord's petition, filed under
Docket No. FB210189RO, be, and the same hereby is, denied, and that
the Administrator's order, issued under Docket No. CJ210348R, be,
and the same hereby is, affirmed; and it is
FURTHER ORDERED, that the subject landlord's petition, filed
under Docket No. FI210057RO, be, and the same hereby is, granted in
part, and that the Administrator's order, issued under Docket No.
KC000499AD, 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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