GA 210010 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 210010 RO

                                          :  DISTRICT RENT OFFICE
                                             DOCKET NO. ZDA 210456 R
           Frank Fairweather,               
                                             TENANT: Myra Garcia              
            
                            PETITIONER    : 
      ------------------------------------X                             

           ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


      On January 6, 1992, the above-named petitioner-owner timely re-filed a 
      Petition for Administrative Review against an order issued on October 
      10, 1991, by the Rent Administrator, 92-31 Union Hall Street, Jamaica,  
      New York, concerning the housing accommodations known as 757 Miller 
      Avenue, Brooklyn, New York, Apartment No. 3F, wherein the Rent 
      Administrator determined that the owner had overcharged the tenant.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Section 2526.1 of the Rent Stabilization Code.

      The issue herein is whether the Rent Administrator's order was 
      warranted.

      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 of a rent 
      overcharge complaint by the tenant on January 30, 1989.  Both the 
      current and prior owners were served with a copy of the tenant's 
      complaint but failed to submit responses thereto.

      In Order Number ZDA 210456 R, the Rent Administrator established the 
      lawful stabilized rent as $233.01 effective August 1, 1988, determined 
      that the tenant had been overcharged and directed a refund to the tenant 
      of $2,555.82 including treble damages on overcharges collected on and 
      after April 1, 1984 and listed only the current owner in the order.

      In this petition, the current owner contends in substance that the 
      building was purchased in October 1990 from the prior owner and the rent 
      changed was the rent set forth in the building rent roll prior to 
      purchase and the current owner's liability should be limited to rent 
      collected since the title transfer in October 1990.


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








          GA 210010 RO

      An examination of the record in this case discloses that the Rent 
      Administrator properly served both the prior and current owners copies 
      of the tenant's complaint directing the submission of rental records for 
      the subject apartment from April 1, 1984 and notice of the possibility 
      of the imposition of treble damages.  Neither the current nor the prior 
      owner submitted the rental records either below or on appeal.

      With regard to the current owner's contention that the prior owner 
      should be held liable for overcharges, prior to October 1990, Section 
      2526.1(f) of the Rent Stabilization Code provides in pertinent part that 
      for overcharge complaints filed or overcharges collected on or after 
      April 1, 1984, a current owner shall be responsible for all overcharge 
      penalties, including penalties collected by any prior owner.

      The Commissioner rejects the owner's contention that its liability is 
      limited due to the fact that it collected rents set forth in the rent 
      roll provided during the title transfer, as without merit.

      It is a long standing DHCR policy that a new owner "steps into the 
      shoes" of the prior owner.   Upon purchasing a rent-regulated property, 
      the new owner knew or should have known of its obligation to acquire a 
      complete set of rental records in order to verify that the rent 
      contained in the building's rent roll included with the transfer of 
      title were legal regulated rents and whether there were pending 
      complaints against those rents.  Its failure to do so is insufficient 
      evidence to indemnify the current owners from liability.  

      Accordingly, the Rent Administrator's order was warranted and in the 
      instant case, the current owner, who purchased the subject premises in 
      October 1990 is liable for overcharges collected from August 1, 1988 as 
      stated in the Rent Administrator's order, inclusive of treble damages 
      and excess security.  It is noted that due process requirements are 
      satisfied since the current owner, was served with a copy of the 
      tenant's complaint below, fully participated in the appeal proceeding 
      and failed to produce the required rental history from April 1, 1984 or 
      offer evidence challenging the substantive portion of the Rent 
      Administrator's order.

      This order is issued without prejudice to any action the current owner 
      may have against the former owner as to the rent overcharges collected 
      by the former owner.
       
      Because this determination concerns lawful rents only through           
      January 31, 1989, the owner is cautioned to adjust subsequent rents to 
      an amount no greater than that determined by the Rent Administrator's 
      order plus any lawful increases, and to register any adjusted rents with 
      this order and opinion being given as the explanation for the 
      adjustment.

      This order may, upon the expiration of the period in which the owner may 
      institute a proceeding pursuant to Article 78 of the Civil Practice Law 
      and Rules, be filed and enforced in the same manner as a judgment or not 
      in excess of twenty percent per month thereof may be offset against any 
      rent thereafter due the owner.

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



          GA 210010 RO

      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 hereby is, affirmed.


      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner






    

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