GD 410227 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.: GD 410227 RO
RITA COPPOLECCHIA DRO DOCKET NO.: ZDL 410239 R
TENANT: CATHERINE FURNESS
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On April 23, 1992, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on March
20, 1992, by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York, concerning the housing accommodations known as
235 East 89th Street, New York, New York, Apartment No. 2FN,
wherein the Rent Administrator determined that the owner had
overcharged the tenant.
The Commissioner issued an order and opinion dismissing the owner's
petition on August 21, 1992 as untimely filed.
Subsequent thereto, the petitioner requested reconsideration and
provided documentation from the United States Postal Service that
its petition was postmarked on April 23, 1992 and was a timely
filing against the Rent Administrator's order issued on March 20,
The order granting reconsideration and re-opening of the
Administrative Review Order and Opinion, issued August 21, 1992,
was served on the tenant along with the owner's documentation.
The tenant responded to the substance of the owner's petition but
did not contest the reopening.
The evidence in file discloses that the owner's petition postmarked
on April 23, 1992 meets the criteria for the filing of a timely PAR
in that it was postmarked not more than 35 days after the issuance
date of the order appealed.
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
GD 410227 RO
issue raised by the administrative appeal.
This proceeding was originally commenced by the filing of a rent
overcharge complaint by the tenant on December 18, 1989.
In the complaint, the tenant stated in substance that her rent had
been established by the Rent Administrator under CDR 23,652 (L
3112393 R) issued October 2, 1986 which had reduced her rent and
found an overcharge of $6,196.20 through February 28, 1986. The
owner subsequently filed a petition for Administrative Review (AK
410512 RO) which was issued October 26, 1989 affirming the Rent
Administrator's order. During the pendency of the PAR, the owner
had filed a petition in the Supreme Court pursuant to Article 78 of
the Civil Practice Law and Rules. The courts issued a stay on the
enforcement of the Rent Administrator's order issued October 2,
1986 on April 27, 1987 which was lifted upon the withdrawal of the
Owner's Article 78 proceeding in June 1987. The tenant who had
paid the rent set by the Rent Administrator's order, resumed paying
the higher rent in May 1987 and was not informed of the lifting of
the stay. The tenant filed the overcharge complaint in December
1989 for the recovery of the overcharges paid from March 1, 1986
through October 30, 1986 and May 1, 1987 through the issuance of
the Commissioner's Order affirming the prior order on October 26,
In addition, the tenant claimed treble damages for the period in
which the owner had collected the higher rent although the stay had
In response to the tenant's complaint, the owner responded in
substance by the submission of documentation indicating that in
December 1989, after the issuance of the Commissioner's October 26,
1989 order affirming the Rent Administrator's Order, the owner had
tendered to the tenant a refund of the retroactive amount of the
overcharge stated in the Rent Administrator's order of $6,196.20
which the tenant had accepted and a check for $2,471.17
representing a refund of the principal of excess rent paid from
March 1, 1986 through November 30, 1989. The tenant had refused to
cash the refund but instead filed the overcharge complaint on
December 18, 1989.
In Order Number ZDL 410239 R, the Rent Administrator determined
that the tenant had been overcharged and directed a refund to the
tenant of $3,611.98 including interest on overcharges for the
period from March 1, 1986 through November 30, 1989.
In this petition, the owner contends in substance that the Rent
Administrator's order should be modified to eliminate the
assessment of interest in the amount of $980.41 which was included
in the total overcharge of $3,611.98 because the owner had made an
ernest attempt to refund the principal prior to the filing of the
tenant's complaint in December 1989; the accrued interest is due
solely to the tenant's refusal to cash the check tendered in
December 1989 and DHCR's delay in processing the complaint; that
the discrepancy of $160.40 between the principal amount of
$2,471.17 tendered to the tenant in December 1989 and the principal
amount of $2,631.57 stated in the order was due to a minor
miscalculation by the owner in computing a 7 month rather than 8
GD 410227 RO
month period from March 1, 1986 through October 30, 1986 and
reducing the overcharge by $90.00 in arrears. Moreover, the owner
has substantiated that it had refunded the principal of $2,631.57
stated in the Rent Administrator's order by a check dated March 27,
1992 which was cashed by the tenant who subsequently returned the
uncashed check of $2,471.17.
In answer to the owner's petition, the tenant stated in substance
that she had been advised by DHCR not to cash the December 1989
refund of $2,471.17 because she was filing the instant complaint
and claiming treble damages; that she advised the owner by phone
that she was not settling but filing the complaint because she did
not trust the owner's calculations and that the overcharge was
willful because the owner continued to accept the higher rent for
2 1/2 years after the lifting of the stay.
The Commissioner is of the opinion that this petition should be
With regard to the owner's contention that the imposition of
interest was not warranted, Section 2526.1 of the Rent
Stabilization Code provides in pertinent part that any owner who is
found by the DHCR to have collected a rent or other consideration
in excess of the legal regulated rent on and after April 1, 1984
shall be ordered to pay to the tenant a penalty equal to three
times the amount of such excess. If the owner established by a
preponderance of the evidence that the overcharge was not willful,
the DHCR shall establish the penalty as the amount of the
overcharge plus interest from the date of the first overcharge on
or after April 1, 1984.
In the instant case, the Rent Administrator determined that the
owner's attempts to refund the overcharges successfully rebutted
the presumption of willfulness and therefore denied the tenant's
claims for treble damages.
The imposition of interest was mandated by Chapter 403 as an
alternative to the imposition of treble damages upon the owner's
successful rebuttal of the presumption of wilfulness. However, if
treble damages are not imposed, the assessment of interest on
overcharges is mandatory.
Further pursuant to Section 2520.13 of the Rent Stabilization Code,
the tenant was not required to waive her rights under the Rent
Stabilization Law by the acceptance of the owner's proposed
settlement nor precluded from filing an ancillary complaint of Rent
Overcharge to recover the excess rent for the period between the
Rent Administrator's order and the Commissioner's affirmation of
the order where the owner did not reduce the rent prospectively.
The Rent Administrator's order does not contain specific errors
raised by the owner and the Rent Administrator correctly imposed
interest on the overcharge.
With regard to the tenant's contention in her response to the
Petition that the overcharge was willful, the Commissioner notes
that the tenant has failed to file her own petition against the
Rent Administrator's order raising the issue of wilfulness, and
therefore, it can not be introduced and considered under the
instant proceeding filed by the owner.
GD 410227 RO
According, the Rent Administrator's order was warranted.
The Commissioner notes however that the owner has substantiated the
acceptance by the tenant of the principal amount of $2,631.57 in
March 1992 and therefore the remaining overcharge consists of the
balance of $980.41, assessed for simple interest at 9%.
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, not in excess of twenty percent per month of the overcharge
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. The balance of
the unrefunded overcharge is $980.41.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner