DHCR Decisions
DOCKET NUMBERS: FE810067RO, ET AL.
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 :
APPEAL OF ADMINISTRATIVE REVIEW
: DOCKET NUMBERS:
FE810067RO FE810076RO
ABC PROPERTIES, : FE810068RO FE810077RO
FE810069RO FI810003RO
PETITIONER : FE810070RO FI810004RO
---------------------------------------X FE810071RO FI810005RO
FE810072RO FI810006RO
FE810073RO FJ910415RO
FE810074RO FJ810416RO
FE810075RO FJ910417RO
DRO DOCKET NUMBERS:
LBE810008R LBE810014R
LBE810024R LBE810027R
LBE810028R LBE810039R
LBE810001R LBI810005R
LBG810048R LBH810009R
LBE810025R LBG810040R
LBE810037R LBG810003R
LBF810004R LBE810016R
LBE810015R LBE810044R,
respectively
ORDER AND OPINION DENYING 18 PETITIONS FOR ADMINISTRATIVE REVIEW
These petitions have been consolidated as they involve common issues of law
and fact.
The above named petitioner-owner timely filed 18 Petitions for Administrative
Review against 18 orders issued by the Rent Administrator, 55 Church Street,
White Plains, New York, concerning housing accommodations known as various
apartments, Larchmont Acres West, Larchmont, New York, wherein the Rent
Administrator determined that the 18 tenants herein had been overcharged.
The issue in this appeal is whether the Administrator properly disallowed
rent increases taken by the owner on leases commencing on or after October 1,
1985 but before September 30, 1986 because the owner had failed to file
certain required data to the Westchester County Rent Guidelines Board by May
15, 1985.
The applicable sections of the Emergency Tenant Protection Act (ETPA) are
Sections 4 and 12 (8624 and 8632 in McKinney's Unconsolidated Laws [Book
65]).
DOCKET NUMBERS: FE810067RO, ET AL.
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 these administrative appeals.
In the Orders herein under review, the Rent Administrator determined that
because the owner had filed the Maintenance and Operating (M & O) Cost Survey
after its May 15, 1985 due date, and because there was no evidence or even an
allegation that the Westchester County Rent Guidelines Board (Board) had
accepted the owner's reasons for filing late, the owner was ineligible to
impose Rent Guidelines increases on leases commencing during the 1985-1986
Rent Guidelines period.
In this petition, the owner contends that the Rent Administrator's Orders are
incorrect and should be modified because the Board had no power to impose
such a penalty for late filing and secondly, even if the Board had such
power, the penalty should not be applied herein since the required Mainte
nance and Operating schedule was submitted less than two weeks late. More
specifically, the owner argues that under ETPA the Board is empowered to
collect data and adopt guidelines for rent increases - but has no authority
to impose penalties. Therefore, the Guidelines Order for the period in
question "insofar as it purports to bar an owner from collecting rent
guidelines increases for an entire year based upon the late filing of an M &
O Schedule is an unlawful exercise of authority by the County Rent Guidelines
Board." (Emphasis in original.)
In addition, the owner contends that the penalty imposed by the Board "is
inconsistent with the spirit and intent of the ETPA and the regulations
promulgated thereunder." The owner supports this contention by noting that
under the Tenant Protection Regulations (TPR) a failure to timely file a
Certificate of Services or an annual registration statement only results in
an owner being precluded from collecting rent increases until the owner
subsequently files the required documentation, at which point the owner can
collect the rent increases prospectively. Therefore, the Board's penalty
herein also should not penalize an owner beyond the date of actual filing.
Accordingly, the owner contends the Administrator "erred by imposing a rent
overcharge penalty based upon an unlawful and unenforceable resolution of the
County Rent Guidelines Board."
Furthermore, the owner argues that neither the Board nor the tenants have
even asserted that they were prejudiced by the late filing, whereas the
prejudice to the owner is "severe," especially since the lateness was not
willful. The delay is alleged to have been caused by "an office oversight"
whereby the March 1985 letter from the Board "did not come to the attention
of ...the owner's managing partner until after the May 15th deadline, and as
soon as he became aware of it the Schedule was completed and filed by hand-
delivery." The owner's "good faith" is also said to be demonstrated by the
fact that all prior M & O schedules had been filed on time.
Finally, the owner requests that all 18 petition be consolidated to avoid
inconsistent determinations as each involves "identical issues."
In answer to these petitions the tenants argue that the Administrator's
DOCKET NUMBERS: FE810067RO, ET AL.
Orders were correct and should be upheld.
In particular, the tenants contend that the petitioner "has no legal standing
in this proceeding" as it is not the owner of record.
On the merits, the tenants state the Board "does have the express authority
to adopt guidelines which bar the landlord from collecting any increase for
the period in question for failure to timely file the Maintenance & Operating
Expense Schedule."
The tenants contend that the M & O Schedule "is required on a timely basis so
that it may be analyzed by the Rent Guidelines Board. And if by two days or
by two weeks the landlord failed to meet the deadline as required, he is in
violation because the financial data is not available to be included in the
data used by the Guidelines Board to determine increases."
The tenants further contend that the owner "made no attempt to be excused for
this failure. The landlord had several opportunities to appear before the
...Board to offer any and all relevant facts and request that the ...Board
remove the landlord from the [list of owners ineligible to take Guidelines
increases during the period in question]."
The tenants allege that the owner also failed to file an O & M Schedule for
another building, thereby demonstrating "a blatant disregard for the
authority and procedures of the Board."
The tenants also assert that "the Administrator simply administered the
regulations as he is required to do" so that the Administrator's order is
correct.
Finally, the tenants also request consolidation of these petitions.
The Commissioner is of the opinion that these petitions should be denied.
At the outset, the Commissioner, notes that the petitioner was the landlord
named in all of the orders herein under review. The petitioner was also
named by the tenants in their complaints. Furthermore, in 1987 the
petitioner's lawyer filed a notice of appearance for the petitioner (who was
then before the Administrator), despite the fact that Larchmont Owners
Corporation took title in September of 1986 from Larchmont Acres Associates,
a limited partnership. The Commissioner notes that the Regulations'
definition of Landlord includes an agent of the actual owner, including the
managing agent. Therefore, the petitioner is an entity aggrieved by the
Administrator's orders and has standing to appeal under TPR Section
2510.1(a).
The Division is required to Administer ETPA and, in particular, to find an
overcharge whenever an owner collects rent in excess of the rent authorized
under ETPA. For a rent to be authorized, it must conform with the applicable
Guidelines Board Order. The Board Order in effect during the period in
question in this proceeding states:
"The Board has determined that it will authorize no
rental adjustment for the class of housing accommodations
for which the owners have failed to submit or timely
DOCKET NUMBERS: FE810067RO, ET AL.
submit required data to the Board and have failed to
provide a legally acceptable reason to be determined
pursuant to the Board's directive and resolutions and as
implemented by written notices to said owners sent by
certified mail."
Therefore, the Administrator was constrained, as is the Commissioner, to find
that the owner herein was not eligible to impose a Guidelines rent increase
during the period in question. The Board is a quasi-legislative body and its
rulings are not subject to review by the Division. Accordingly, the owner
can not collaterally attack the Board's Order in a proceeding before the
Division. This Order is without prejudice to the owner's right to challenge
the Board's Order in a court of competent jurisdiction.
It is undisputed that the owner did not timely file the O & M Schedule by May
15, 1985. Division records show that the Schedule was received by the owner
on March 13, 1985, two months before the deadline. It was properly addressed
and the return receipt was signed. The owner's contention in its Petition
that "[t]hrough an office oversight, the matter did not come to the managing
partner's attention at ABC Properties until after the May 15th filing
deadline," does not contradict that the schedule was received by the owner on
March 13, 1985. If such an excuse were deemed acceptable the deadline would
have no meaning at all.
ETPA Section 4 mandates the establishment of a Rent Guidelines Board in each
of the three ETPA countries and provides that each Board
"shall establish guidelines for rent adjustments which,
at its sole discretion may be varied and different for
and within the several zones and jurisdictions of the
board, and in determining whether rents for housing
accommodations as to which an emergency has been declared
pursuant to this act shall be adjusted, shall consider
among other things (1) the economic condition of the
residential real estate industry in the affected area
including such factors as the prevailing and projected
(i) real estate taxes and sewer and water rates, (ii)
gross operating maintenance costs (including insurance
rates, governmental fees, cost of fuel and labor costs),
(iii) costs and availability of financing (including
effective rates of interest), (iv) overall supply of
housing accommodations and over-all vacancy rates, (2)
relevant data from the current and projected cost of
living indices for the affected area, (3) such other data
as may be made available to it. As soon as practicable
after its creation and thereafter not later than July
first of each year, a rent guidelines board shall file
with the state division of housing and community renewal
its findings for the preceding calendar year, and shall
accompany such findings with a statement of the maximum
rate or rates of rent adjustment, if any, for one or more
classes of accommodation subject to this act, authorized
for leases or other rental agreements commencing during
the next succeeding twelve months. The standards for
rent adjustments may be applicable for the entire county
DOCKET NUMBERS: FE810067RO, ET AL.
or may be varied according to such zones or jurisdictions
within such county as the board finds necessary to
achieve the purposes of this subdivision." (Emphasis
added.)
As stated above, the Division does not have the power to review the Board's
Orders. Nevertheless, the Commissioner notes that the Board has the power to
establish different rent increase rates, or no rates at all, for different
classes of housing. Furthermore, the Board must base its decision in part on
"gross operating maintenance costs" and the Board itself has a July 1st
deadline to promulgate both its findings and the maximum rent increases for
the following cycle (in part based on the O & M Schedules).
It is clear that to meet its own deadline the Board must consider the O & M
Schedules, if at all, within the month and half period before the July 1 due
date for its Order. While most deadlines are to some extent arbitrary,
clearly some deadline is required in order for the Schedules to be consid
ered. Surely, the owner's suggestion that owners be allowed to collect
Guidelines increases upon filing of the Schedules has no merit. The rent
increases can occur no earlier than October 1st, whereas the Schedules are
due the preceding May 15th. Under the owner's suggestion there would be no
incentive at all to timely file.
THEREFORE, in accordance with the Emergency Tenant Protection Act and
Regulations, it is
ORDERED, that these petitions be, and the same hereby are, denied and the
Rent Administrator's orders be, and the same hereby are, affirmed.
Note: In petitions numbered FE810071RO and FE810074RO the landlord stated
the Administrator's order being appealed were LBE810048R and LBE810004R,
respectively. However, the actual orders being appealed, which were attached
to the landlord's petitions, were LBG810048R and LBF810004R, respectively.
The correct numbers appear in the above captions.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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