GG210098.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. GG210098RO
                                              :    DRO DOCKET NO.FE210358R
                  Mel Bauta                         
                                                   TENANT: Lawrence        
                               PETITIONER     :            Hilonowitz 
          ------------------------------------X

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                       IN PART
               
          On July 23, 1992, the above-named petitioner-owner filed a Petition 
          for Administrative Review against an order issued on June 19, 1992 
          by a Rent Administrator, concerning  the  housing  accommodations
          known as 4149 Kings Highway, Brooklyn, New York, Apartment No. 4H 
          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 on May 22, 
          1991 of a rent overcharge complaint by the  tenant,  wherein  the
          tenant stated that he assumed occupancy on October 1, 1988 pursuant 
          to a one year vacancy lease at a rent of $461.30.

          The tenant also stated that a rent reduction  order  for  service
          violations was still in effect, and that he was being overcharged 
          for recent Major Capital Improvement (MCI) increases because  the
          apartment was incorrectly registered as 2 1/2 rooms instead of  1
          1/2 rooms.

          The owner was served with the complaint and directed to submit  a
          complete lease history.
















          GG210098.RO


          In  response,  the  owner  submitted  various  documentation   of
          improvements to the apartment,  and  copies  of  the  complaining
          tenant's leases.  In addition, the owner submitted a renewal lease 
          form for the lease term commencing August 1, 1986, that was dated 
          May 30, 1986 and was signed by the prior tenant.  However, it was 
          not signed by the owner.

          In the order under appeal herein, issued on June  19,  1992,  the
          Administrator determined that the tenant had been overcharged  in
          the amount of $23,773.64, including interest for the period  from
          October 1, 1988 to May 31, 1989 and treble damages for the period 
          from April 1, 1989 to June 30, 1992.  It was  further  determined
          that because the subject apartment was vacant on April 1, 1987, the 
          April 1, 1987 base rent was set at $214.00 per month, which was the 
          April 1, 1986 registered rent.  Overcharges were further increased 
          due to the issuance of a service reduction order,  Docket  Number
          CL210603S, on April 17, 1990, although no retroactive penalty was 
          imposed.

          In its petition, dated July 23, 1992, the owner contends that the 
          Administrator was in error in calculating the complainants'vacancy 
          lease rent from a base of $214.00, and that the proper base  rent
          was $242.91, which was the lawful  rent  in  the  prior  tenant's
          renewal lease commencing on August 1, 1986.  Petitioner  contends
          that while the owner did not sign the lease it was still a  valid
          renewal lease,  as  supported  by  statute  and  case  law.   The
          petitioner  concludes,  therefore,  that  by   substituting   the
          "intervening" lease rent as the base rent for complainant's vacancy 
          lease, and applying exactly the same increases that were granted by 
          the Administrator, that there are no overcharges until  the  rent
          reduction order was issued, and that this overcharge only occurred 
          because the owner, who is a layperson, failed to  understand  the
          confusing and "difficult" language in the order.  For this reason, 
          the owner believes that the finding of willfulness is  incorrect,
          and that treble damages should be removed.

          The tenants answer states that the prior tenant's renewal lease was 
          at best a "unilateral offer" since it was never signed by the owner 
          and, hence, had no legal effect.  The tenant notes that paragraph 
          6 of the lease states that "... (T) he signing by both parties of 
          this lease extension shall constitute  a  binding  agreement...."
          Futhermore, continues the tenant,  the  prior  tenant  reportedly
          vacated the apartment prior to the expiration of the old lease on 
          July 31, 1986, leaving the apartment  vacant  during  the  entire
          period of the alleged tenancy.  Finally the  tenant  argues  that
          treble damages should be upheld because the owner has said nothing 
          that disproves the finding of willfulness.



          The owner's response to the tenant's answer,  dated  February  2,






          GG210098.RO

          1993, contends that the prior  tenant  remained  in  the  subject
          apartment through December 30, 1986, as evidenced by a letter from 
          the tenant of that date, wherein she stated that she was vacating 
          the premises immediately and that December's rent would be paid by 
          her security deposit.  The owner also submitted a copy of his own 
          letter to the prior tenant, dated October 31, 1986,  wherein  the
          owner demanded payment of the difference in rent for the months of 
          August through November, 1986. 

          The Commissioner is of the considered opinion that this  petition
          should be granted in part.

          Section 2522.5(b) of the Rent Stabilization Code  provides  inter
          alia, that a tenant be furnished with a  fully  executed  renewal
          lease form, bearing the signatures of the owner and tenant, within 
          30 days from the owner's receipt of the renewal lease form signed 
          by the tenant and that, upon a complaint by the tenant that he was 
          not served with a copy of such fully executed lease, the DHCR shall 
          order the owner to issue one, and that certain specified penalities 
          shall be imposed.

          In the instant case, the Administrator determined that the copy of 
          the August 1, 1986 renewal lease provided by  the  owner  in  the
          rental history did not meet the above requirements because it had 
          not been signed by the owner, although it was valid in all  other
          respects.  As a result the Administrator discounted the lease from 
          its calculations of the lawful rent, resulting in an  overcharge.
          However, the Code only imposes penalties in this regard when  the
          tenant files a complaint that specifically raises the issue, which 
          is not the case here.  In the instant case, the renewal lease was 
          signed by the prior tenant and the owner has  submitted  evidence
          that the prior tenant occupied the subject apartment for 5 months 
          of the term of the renewal lease  and  that  the  owner  demanded
          payment of the difference in rent pursuant to the  renewal  lease
          before the prior  tenant  vacated  the  subject  apartment.   The
          Commissioner  therefore  finds  that  it  was  improper  for  the
          Administrator to disregard that lease.

          With regard to the issue of treble damages, the  owner  fails  to
          assert any credible reason why the Administrator's  determination
          that overcharges were willful is incorrect.  The owner's failure to 
          fully understand the "difficult" language of a DHCR order shall not 
          be considered an adequate explanation for the collection of rent in 
          excess  of  the  lawful  amount.   As  a  result  of  the   above
          modifications to the order, the amount of overcharges is reduced to 
          $3,648.64 from $23,773.64, as documented in  a  rent  calculation
          chart affixed hereto and made a part hereof.




          This order may, upon the expiration of the period  in  which  the












          GG210098.RO

          owner may institute a proceeding pursuant to Article Seventy-Eight 
          of the Civil Practice Law and Rules, be filed and enforced by the 
          tenant in the same manner as a judgment or not in excess of twenty 
          percent thereof per month may be offset against any rent thereafter 
          due the owner.

          If the owner has already complied with the Administrator's  order
          and there are arrears due to the owner as a result of the instant 
          determination, the tenant may pay off the arrears in twelve  (12)
          equal monthly installments.  Should the tenant vacate  after  the
          issuance of this order, said arrears shall be payable immediately.

          THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

          ORDERED, that the Petition be, and the same hereby is granted  in
          part; and that the the Administrator's order  be,  and  the  same
          hereby is modified in accordance with this order and opinion.




          ISSUED:




                                                                           
                                              JOSEPH A. D'AGOSTA
                                              Deputy Commissioner







    

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