GA 210054 RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: GA 210054 RO
PROSPECT REALTY ASSOCIATES, DRO DOCKET NO.: ZDJ 210280 R
TENANT: RICHARD WILKERSON
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On January 13, 1992, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
December 20, 1991, by the Rent Administrator, 92-31 Union Hall
Street, Jamaica New York, concerning the housing accommodations
known as 925 Prospect Place, Brooklyn, New York, Apartment No. 4J,
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
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 October 6, 1989. The owner
was served with a copy of the tenant's complaint and was further
directed on September 18, 1991 and October 17, 1991 to submit
copies of leases from April 1, 1984 and bills and cancelled checks
to substantiate new equipment or improvements to the subject
The owner failed to submit a response.
In Order Number ZDJ 210280 R, the Rent Administrator established
the lawful stabilized rent as $314.40 effective October 1, 1989,
determined that the tenant had been overcharged and directed a
refund to the tenant of $9,477.00 through December 30, 1990
including treble damages on overcharges collected on and after
April 1, 1984.
In this petition, the owner contends in substance that the Rent
Administrator utilized an incorrect base rent of $255.70 rather
GA 210054 RO
than the correct base rent of $365.31 in effect on December 20,
1988 when computing the tenant's vacancy lease which commenced
January 1, 1989 and not October 1, 1989 as stated in the order;
that the Rent Administrator failed to consider $7,000.00 in
improvements to the subject apartment; that the use of the correct
base rent and 1/40th of the cost of improvements results in no
overcharge and further that due to the fact that the tenant failed
to pay back rent of $7,875.00, the owner should not be liable for
overcharges for rent not collected. With the petition, the owner
submitted leases in effect from March 1, 1987 through December 30,
1990 plus copies of a statement dated November 15, 1988 from a
general contractor indicating that the apartment was rehabilitated
at a total cost of $6,890.00.
In answer to the owner's petition, the tenant stated in substance
that the improvements were really repairs which required only 2
hours labor by 2 workers and that the cost alleged is questionable.
Moreover, these repairs were performed after November 15, 1988 and
not prior to his occupancy.
The Commissioner is of the opinion that this petition should be
Section 2526.1(a)(3)(i) of the Rent Stabilization Code states in
pertinent part that the legal regulated rent for purposes of
determining an overcharge shall be deemed to be the rent provided
in the annual registration filed 4 years prior to the most recent
registration statement at the time of the filing of the complaint
plus any subsequent lawful increases and adjustments.
Section 2523.7 of the Rent Stabilization Code obliges the owner to
maintain and produce records relating to rentals of accommodations
within the 4 year period prior to the most recent registration.
In the instant case, the tenant filed the complaint in October 1989
and therefore the owner was correctly directed to produce rental
records from April 1985 to substantiate the rental data contained
in the registrations filed with DHCR.
An examination of the record in this case discloses that in the
proceeding before the Rent Administrator, the owner did not submit
bills or the prior leases from the base date of April 1, 1985
although afforded an opportunity to do so and has not submitted a
reasonable excuse for its failure to do so. Since this is not a de
novo proceeding, the owner's contention that guideline increases
for leases and increases for new equipment and improvements should
be included in the establishment of the tenant's vacancy lease rent
cannot be considered for the first time on appeal. Moreover, the
owner's failure to submit such records precluded the Rent
Administrator from considering any adjustments for the period from
April 1, 1985 through January 1, 1989 in the absence of supporting
rental records and therefore, the Rent Administrator was correct in
utilizing the rent in effect prior to April 1, 1985 ($255.70) as
the base rent for calculating the tenant's vacancy lease.
Further, the owner has failed to submit either below or on appeal
copies of the leases in effect from April 1, 1985 through February
GA 210054 RO
The owner is correct, however, in its contention that the Rent
Administrator's order contained an error in the calculation chart
in indicating the commencement date of the tenant's vacancy leases
as October 1, 1989 rather than the correct commencement date of
January 1, 1989. However, the Rent Guidelines Board order
governing increases for leases commencing January 1, 1989 (RGBO #
20) and leases commencing October 1, 1989 (RGBO # 21) contain
identical guideline and vacancy increases. Therefore, the
computation of the lawful stabilized rent would be unchanged by the
correction on the chart from October to January 1989.
Moreover, the correction would result in a change in the amount of
the overcharge for that lease term to the detriment of the owner by
increasing the computation of the monthly overcharge from 15 to 24
months. As such, and in the absence of a timely petition for
administrative review by the tenant, the Commissioner finds it
appropriate to deny that portion of the appeal and not to adjust
the calculation chart to correct the incorrect commencement date of
October 1,1989 as shown on the calculation chart.
Accordingly, the Rent Administrator's order was warranted.
Because this determination concerns lawful rents only through
December 30, 1990, 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.
With regard to the owner's contention that the tenant currently
owes back rent and that the owner should not be liable for
overcharges for rent not collected, the Commissioner notes that the
Rent Administrator calculated the amount of overcharge only through
December 30, 1990 and cannot take into account any dispute over
rent payments subsequent to that date. This order is issued
without prejudice to any action the parties may take in court
regarding such dispute.
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 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.
GA 210054 RO
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner