GA110121RO; GA110304RT
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
APPEALS OF DOCKET NO. GA110121RO
GA110304RT
133-24 Sanford Ave. Realty, : DISTRICT RENT ADMINISTRATOR'S
owner, DOCKET NO. Q3117892R
and
Frank Watts - tenant,
PETITIONERS :
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ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
AND MODIFYING ADMINISTRATOR'S ORDER
The above-named owner and tenant filed timely petitions for
administrative review of an order issued on December 20, 1991, by a
District Rent Administrator concerning the housing accommodations known
as 133-24 Sanford Avenue, Flushing, New York, Apartment No. 10L, wherein
the Administrator determined that the owner had overcharged the tenant.
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the record relevant to the issues
raised by the administrative appeals.
This proceeding was commenced by the filing of an overcharge complaint.
The Division of Housing and Community Renewal (DHCR) received the
overcharge complaint on June 4, 1984.
The Administrator requested that the owner supply a complete rental
history from April 1, 1980.
In its answer to the complaint the owner alleged, among other things,
that the petitioner-owner purchased the property on February 1, 1985
while the property was in receivership. Further, it was alleged that
this building was exempted from all local rent regulation by virtue of
a Department of Housing and Urban Development (HUD) order giving HUD
exclusive jurisdiction over the regulation of rents from November 1,
1985 to October 31, 1986. Also, the owner alleged that it was required
to retain records for only four years, and that it received notice of
this proceeding in 1987 and a notice requesting a lease history was
received in 1989. Accordingly, the owner asserted that the
Administrator could only examine the rental history from 1985.
The Administrator then sent to the owner a final notice of pending
default. The Administrator in this notice again requested a lease
history and requested proof that the owner had initially registered the
subject apartment in 1984.
The owner failed to submit a copy of the base date lease of April 1,
GA110121RO; GA110304RT
1980.
In the order here under review, the Administrator, based on the owner's
failure to provide evidence of initial registration, processed the case
as a Tenant's Challenge to the initial registration and found that the
owner was required to produce a rental history from April 1, 1980. The
Administrator determined the lawful stabilization rent and overcharges
using the court approved default procedure. Further, the Administrator
found that the owner had failed to prove that the overcharge was not
willful. In accordance with Section 2526.1(f)(2) of the Rent
Stabilization Code, the Administrator assessed interest on post April 1,
1984 overcharges and not treble damages based on the fact that the
subject building was purchased by the petitioner owner on February 1,
1985 while the building was in receivership. The subject building
became exempt from local rent regulation by virtue of a HUD order for
the period from November 1, 1985 to October 31, 1986. Accordingly, the
Administrator computed the overcharges through October 31, 1985 only.
In its petition for administrative review, the owner asserts that the
subject apartment was registered and that the tenant did not file a
challenge to the initial registration. Accordingly, the owner maintains
that no overcharge occurred. Further, the owner reasserts the
allegations made below.
In his petition for administrative review, the tenant requests
modification of the Administrator's order. The tenant asserts that the
calculations should have begun as of 1982 and not 1983 as stated in the
body of the Administrator's order.
After careful consideration, the Commissioner is of the opinion that
these petitions for administrative review should be denied, but the
Administrator's order must be modified.
The Commissioner finds that the Administrator correctly required the
owner to produce rental records from April 1, 1980 and correctly treated
the proceeding as a Tenant Challenge to the initial registration. This
procedure was correct even if the subject apartment was duly registered
in 1984. The record indicates that the complaint in this case was
received by DHCR on June 4, 1984 and the owner-supplied proof of service
of the initial registration shows that the tenant was served on November
9, 1984. Because the complaint was filed prior to the date that the
subject apartment was registered, the tenant's complaint was properly
treated as a Tenant's Challenge. Further, the owner is required to
retain rent records for four year prior to the filing of the complaint
not four years prior to the receipt of the final notice. Accordingly,
the owner's petition for administrative review must be denied.
With respect to the tenant's petition for administrative review, the
Commissioner notes that the body of the Administrator's order did
contain a typographical error. However, the computations accurately
reflected the fact that the tenant occupied the subject apartment
beginning in 1982 and not in 1983. Accordingly, the tenant's petition
is denied.
Finally, the Administrator's order requires modification. The
GA110121RO; GA110304RT
Administrator found that the owner failed to prove that the overcharge
was not willful. In accordance with Section 2526.1(f)(2) of the Rent
Stabilization Code, the Administrator assessed interest only and not
treble damages because the current owner purchased the property while it
was in receivership. However, this section requires the Administrator
to go further; namely, the Administrator is required to allocate
overcharges between the current owner and the prior owner and the
current owner's liability is limited to the overcharges actually
collected by it.
Accordingly, the petitioner-owner's liability is limited to the
overcharges collected between February 1, 1985 through October 31, 1985
plus interest on those overcharges and excess security.
The overcharge attributable to the prior owner and/or the receiver is
$5,152.82. As neither the prior owner nor the receiver was a party to
the proceeding before the Administrator or was named in the
Administrator's order, no directive to refund any overcharge is included
in this order against those parties. This order is issued without
prejudice to the tenant's rights, if any, to proceed against those
parties in a court of competent jurisdiction for any overcharge
collected by them.
The petitioner-owner is liable for total overcharges of $2,027.66 which
includes interest and excess security.
With respect to the overcharge liability of the current owner, 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
ORDERED, that these petitions for administrative review be, and the same
hereby are, denied, and that the order of the Rent Administrator be, and
the same hereby is, modified in accordance with this order and opinion.
The amount of the rent overcharge for which the current owner is liable
through October 31, 1985 is $2,027.66.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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