GB 110145-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
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: GB 110145-RO
DISTRICT RENT OFFICE
Skillman Associates, DOCKET NO.: EH 110201-R
TENANT: Anthony Sarrica
PETITIONER
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ORDER AND OPINION REMANDING THE PROCEEDING TO THE ADMINISTRATOR
On February 13, 1992, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
January 9, 1992, by the Rent Administrator, concerning the housing
accommodations known as 39-77 46th Street, Sunnyside,
New York, Apartment No. H2, 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 on August 14, 1990 by the
filing of a rent overcharge complaint by the tenant. The
complaining tenant had executed a two year lease commencing on
December 1, 1989 at a rent of $530.21. The prior tenant, who was
the son of the complainant, paid a rent of $346.13.
In an answer to the complaint dated January 30, 1991, the owner
disputed the tenant's claim that he had lived in the apartment with
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his son, the prior tenant, since 1987. The owner referred to the
complainant's application for the apartment which stated that he
was residing at 46-01 39th Avenue and that his "present landlord"
was Trump Management. Additionally, the owner contended that the
complainant was aware of the cost of all the new equipment and that
the owner was thus entitled to 1/40th of the cost per month as a
rent increase. Finally, the owner stated that, even if an
overcharge is found, there can be no basis for finding that it was
willful, and no treble damages should be imposed.
In response to further inquiry from the Administrator, the tenant
submitted an affidavit, signed on December 4, 1991, wherein he
affirmed that the "rent arrears" he was required to pay before
signing the lease were for his own residence in the subject
premises during his son's tenancy. Totalling $1,288.56, the amount
was calculated by subtracting his son's rent ($346.13) from the
rent being charged the complainant ($530.21) and charging him the
difference for the seven month period from May through November,
1989 ($184.08 x 7 = $1,288.56). The affidavit also stated that the
Managing Agent Marge Cox told him the "rules" required him to pay
this amount as "back rent" because he was not supposed to be living
there. The affidavit further stated that the tenant had resided in
the apartment with his son for approximately three years, as was
also attested to in his son's letter to the owner, as verified and
dated on November 22, 1989. Finally, the tenant states that he
told the Managing Agent that he did not want window guards because
he lived on the first floor and did not have any small children,
but that he was told the law required it and he would have to pay
for it. He acknowledged that the window guards were installed.
In the order, the Administrator found that the legal registered
rent on April 1, 1986 was $316.17, when the complainant's son,
Charles Sarrica, was the primary tenant; that the complainant,
Anthony Sarrica, had moved into the subject-premises at least two
years before his son's departure and that, pursuant to his
succession rights as a family member residing with the stabilized
tenant, the complainant was entitled to a renewal lease on December
1, 1989; that the complainant was then illegally forced to pay his
son's unpaid rent of $1,288.56, to accept apartment improvements
without his consent and to accept window guards in order to
continue to occupy the apartment; that the entire cost of the
improvements, the window guards and the amount of the unpaid rent
constituted overcharges in the amount of $5,314.74 for which
because evidence indicated that such overcharge was willful, treble
damages were assessed, resulting in total overcharges of
$16,097.15. It was further determined that the lawful registered
rent remained at $372.28, which was the last rent paid by the
complainant's son.
The owner's petition maintains that the order is without a rational
basis for several reasons: firstly, the owner claims that the
complainant did not reside in his son's apartment prior to signing
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the new lease, and that, therefore, it must be considered a vacancy
lease entitling the owner to a vacancy allowance; secondly, the
disallowance of the entire claim for new equipment is irrational
because it goes against the complainant's actual consent to the
increase, as fully explained in a rider to the lease setting forth
the amount the tenant would pay for the improvements, as well as in
the written statement from the prior tenant, the complainant's son,
agreeing to the increase for new windows; and, thirdly, because,
under the facts of the case, it was error to find a willful
overcharge and to impose treble damages. The owner concedes that
the duplication or "piggybacking" of the guidelines increase was an
overcharge but asserts that the imposition of treble damages was
improper and contradicts the Commissioner's prior rulings on this
issue.
In a submission dated September 17, 1992, Charles Sarrica, the son
of the complainant, notified the DHCR that the complainant Anthony
Sarrica, had died on March 20, 1992, and that he was participating
in the proceeding on behalf of his father's estate. Various
documents were also submitted, including a copy of the death
certificate and the letters of Administration from the Surrogate of
Queens County, dated May 26, 1992, wherein Charles Sarrica was
authorized to Administer the decedents estate. The complainant's
son states that his father had resided in the apartment with him
during his lease tenancy, and remained after his departure in
November, 1987, which fact is misstated as "November, 1989" in the
owner's petition. Complainants' son further contends that all
appliances installed by the owner prior to his father's tenancy
were "unnecessary and excessive," had not been requested by the
complainant but "were literally forced upon him."
The Commissioner is of the opinion that the proceeding should be
remanded to the Rent Administrator for a new determination.
Section 2520.6 of the Rent Stabilization Code, as amended, defines
"immediate family" and "family member" as follows:
(n) Immediate Family. A husband, wife, son, daughter,
stepson, stepdaughter, father, mother, stepfather, stepmother,
brother, grandfather, grandmother, grandson or granddaughter.
(o) Family Member.
(1) A husband, wife, son, daughter, stepson, stepdaughter,
father, mother, stepfather, stepmother, brother, sister, nephew,
niece, uncle, aunt, grandfather, grandmother, grandson,
granddaughter, father-in-law, mother-in-law, son-in-law, or
daughter-in-law of the tenant or permanent tenant; or
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(2) Any other person residing with the tenant or permanent
tenant in the housing accommodation as a primary or principal
residence, respectively, who can prove emotional and financial
commitment, and interdependence between such person and the tenant
or permanent tenant.
Section 2523.b(1) of the current Rent Stabilization Law, as amended
provides:
(b) (1) Unless otherwise prohibited by occupancy restrictions
based upon income limitations pursuant to federal, state or local
law, regulations or other requirements of governmental agencies, if
an offer is made to the tenant pursuant to the provisions of
subdivision (a) of this section and such tenant has permanently
vacated the housing accommodation, any member of such tenant's
family, as defined in section 2520.6(o) of this Title, who has
resided with the tenant in the housing accommodation as a primary
residence for a period of no less than two years, or where such
person is a "senior citizen," or a "disabled person" as defined in
paragraph (4) of this subdivision, for a period of no less than one
year, immediately prior to the permanent vacating of the housing
accommodation by the tenant, or from the inception of the tenancy
or commencement of the relationship, if for less than such periods,
shall be entitled to be named as a tenant on the renewal lease.
In the instant case, the Administrator determined overcharges in
the amount of $5,314.74, and, as based upon the finding that these
charges were willful, the treble damages penalty increased that
amount to $16,097.15. The finding of willful overcharges was based
upon several conclusions: that the tenant's payment of
"retroactive" rent for the period he resided in the apartment
during his son's tenancy was an improper and willful overcharge;
that the tenant, as father of the lease tenant, was in permanent
residence in the household for the minimum period required to
establish his rights in succession; that, as a result, the lease
offered to him in his own name after his son's departure was a
renewal lease and not a vacancy lease, thus invalidating the
vacancy allowance; that, because it was not a vacancy lease, the
rent increase for new equipment was invalid because the tenant had
not willingly consented to it; and, finally, that the overcharges
for both the vacancy allowance and the new equipment were willful,
thereby actuating the treble damages penalty.
Upon examination of the record, however, it is apparent that only
the first of these conclusions - that the payment of the
"retroactive" rent was a willful overcharge - is supported by
substantial and uncontested evidence and that, as a result, the
proceeding must be remanded for a thorough investigation on the
remaining issues.
With respect to the tenant's actual residency in the apartment
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prior to his son's departure, the owner correctly points to the
listing of a different address on the tenant's application as
evidence that he had never been in permanent residence there prior
to signing the lease. Nevertheless, the tenant maintains that it
was his primary residence and since the evidence is inconclusive,
the tenant's son should be given the opportunity to explain the
contradictory statement on the application. A hearing should be
held if warranted. Most importantly, the owner's demand for the
"retroactive" rent, besides being illegal, is also an apparent
admission by the owner that the tenant had been a resident of the
household for at least seven months. The tenant, on the other
hand, states that he lived there for over two years. Since that
period is sufficient for succession rights to accrue, and, if the
person is a senior citizen, only one year would be sufficient, the
matter requires conclusive findings to resolve these contradictory
claims.
The determined overcharges for the new equipment presents even
thornier questions. If, as the owner maintains, the tenant had no
rights in succession, then, under Section 2522.4(a) (1) of the Rent
Stabilization Code, the owner correctly relied on its right to add
a rent increase for the cost of new equipment, even without the
consent of the vacancy tenant. In such a case, the rejection of
the claim was improper, and it would need to be evaluated on its
merits. If, on the other hand, the record supports the tenant's
rights in succession, any one of three outcomes is possible: the
tenant, under no duress, consented to the rent increase at the
lease signing, requiring an evaluation of the claim on the merits;
the increase is not valid for reasons other than pressure applied
by the owner and, under previous case rulings and Policy Statement
89-2, treble damages are not applied; and, lastly, the increase was
a willful overcharge by the owner due to its pressuring the tenant
to consent, and treble damages are assessed.
No such investigation is required to affirm the finding of an
overcharge in the amount of $1,288.56 due to the unlawful demand
for the "retroactive" rent from the decedent-tenant. Furthermore,
the very nature of this demand bespeaks of willfulness on the
owner's part, resulting in overcharges of $3,865.68, including
treble damages.
The New York City Health Code mandates window guards only when a
child ten years of age or younger resides in the apartment. Since
that is not the case in this proceeding, it was improper for the
owner to require the decedent-tenant to accept and pay for window
guards.
A proper review of all other overcharges determined in the order
depends upon the resolution of the issues of the decedent-tenants'
status in the household, and, concomitantly, upon whether the
decedent freely consented to the new equipment.
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THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is
ORDERED, that this petition be, and the same hereby is, granted to
the extent of remanding this proceeding to the District Rent
Administrator for further processing in accordance with this order
and opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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