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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. GG210098RO
: DRO DOCKET NO.FE210358R
Mel Bauta
TENANT: Lawrence
PETITIONER : Hilonowitz
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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.
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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,
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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
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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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