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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.: FG510130RO
ARDEN REALTY CORP., DRO DOCKET NO.: AA500517R
PETITIONER TENANT: CASILDA POLANCO
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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.
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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
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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
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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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