FG510130RO
                                  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.: FG510130RO

                    ARDEN REALTY CORP.,           DRO DOCKET NO.: AA500517R

                                   PETITIONER     TENANT:  CASILDA POLANCO
          -----------------------------------X


            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

          On July 8, 1991, the above named petitioner-owner filed a Petition 
          for Administrative Review against an order issued on June 7, 1991 
          by the Rent Administrator, concerning housing accommodations known 
          as the basement apartment at 25 Arden Street, New York, New  York
          wherein the District Rent Administration determined that the tenant 
          had been overcharged in the amount of $27,308.21 including treble 
          damages and excess security.

          The applicable sections of the law  are  Sections  2528.3(b)  and
          2528.4(b) of the 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.

          The proceeding was originally commenced by the filing of  a  rent
          overcharge complaint by the tenant on 12/19/85.  The tenant  took
          occupancy pursuant to a two year  lease  commencing  12/6/79  and
          expiring 12/6/80, at a monthly rent of $125.00.  The tenant stated 
          that she  had  never  been  served  with  the  initial  apartment
          registration (RR-1).

          In Order  No.  AA500517R,  issued  on  June  7,  1991,  the  Rent
          Administrator determined that the tenant had been overcharged  in
          the amount of $27,308.21, including  treble  damages  and  excess
          security.  The order stated that the owner had failed to register 
          the apartment in 1984 and 1985  and  that,  pursuant  to  Section
          2528.4(1)(b) of the Rent Stabilization Code, the owner could  not
          collect rent increases until such time as such registrations were 
          served upon the tenant and the DHCR, when such increases would be 
          collectible prospectively.
















          FG510130RO




          In its petition, the current owner contends that the treble damages 
          penalty was improper because the current owner had properly filed 
          all annual registrations since acquiring the subject building  in
          "late 1985."  The petition states that the  owner  submitted  the
          entire  rental  history  for  the  subject   apartment   to   the
          Administrator and that all lease renewals with the tenant have been 
          in accordance with applicable Rent Guidelines  Board  orders  and
          that, since the only reason for the overcharges was the failure to 
          file the registrations, it was unfair to characterize this mistake 
          as "willful", since no actual overcharges  were  ever  collected.
          Furthermore, the building was entirely in the control of the former 
          owner during the period when the registrations should  have  been
          filed, and to punish the current  owner  for  this  is  "entirely
          irrational."

          In her answer, the tenant states among  other  things,  that  the
          current owner increased her rent from $125.00 to $175.00 per month 
          in January 1985 without a renewal lease, that in January, 1986, the 
          owner forced her to accept a one year lease at a rent of  $197.00
          per month despite her request that the lease be renewed for a two 
          year period; that the owner never gave her a fully executed copy of 
          that lease; that her rent was increased to $229.73 under a 2 year 
          renewal lease from January 1, 1987 to December 31, 1988;  that  a
          renewal lease was not offered when her two year lease expired  on
          12/31/88; and that she continued to pay the same  rent,  $229.73,
          through 12/31/89, without a lease.  Subsequent negotiations  have
          been such that she has filed complaints of the owner's failure to 
          renew the lease, an overcharge complaint  based  on  the  owner's
          failure to serve her the initial and annual registration forms and 
          another objection to the registration form based on the non-receipt 
          of the 1991 registration.  Finally, the tenant informs  the  DHCR
          that the owner did not reduce the rent since the issuance of  the
          order, as the owner was directed.

          The Commissioner is of the considered opinion that this  petition
          should be denied.

          The owner  makes  no  direct  challenge  to  the  Administrator's
          calculation of the lawful  rent  or  the  amount  of  overcharges
          collected, but only contends that the overcharges were the direct 
          result of the former owner's failure to file registrations with the 
          DHCR or to provide the tenant with copies of the initial and annual 
          registrations.  The petition continues that since the  owner  has
          complied with all registration requirements and calculated all rent 











          FG510130RO


          increases in accordance with the guidelines since its purchase of 
          the building in 1985, the finding of willfulness was improper, and 
          treble damages must be removed.

          However, the documented undisputed rental history shows otherwise. 
          Even if the petitioner relied on the proper registration  of  the
          apartment and service of the RR-1 on the complainant,  the  owner
          improperly raised the rent without a lease in  January  1985  and
          exceeded lawful guideline increases for the leases commencing  on
          January 1, 1986, January 1, 1987, December 30, 1988 and  December
          30, 1990.  Since these increases and leases were negotiated by the 
          current owner, the claim that all overcharges were the result  of
          the former owner's conduct is incorrect.  It is also  noted  that
          documentation in the record indicates that contrary to the owner's 
          statement the owner purchased the subject building in June  1984.
          The owner did not serve the tenant with an initial  registration.
          Furthermore, the tenant's response includes rent receipts showing 
          that the owner did not reduce the rent after the issuance of  the
          order, as directed  therein.   Therefore,  the  determination  of
          willfulness is supported by the record, and is affirmed.

          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 $27,308.21.  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 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.






          THEREFORE,  in  accordance  with  the  provisions  of  the   Rent
          Stabilization Law and Code, it is












          FG510130RO


          ORDERED, that this petition for administrative review be, and the 
          same  hereby  is,  denied,  and  that  the  order  of  the   Rent
          Administrator be, and the same here is, affirmed.

          ISSUED:


                                                       
                                                                          
                                             JOSEPH A. D'AGOSTA
                                             DEPUTY COMMISSIONER 
                                        

                                              
    

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