STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                             ADMINISTRATIVE REVIEW
                                                DOCKET NO.: GE610034RO
               Kreisel Co.
                                                DRO DOCKET NO.: DB610431R

                                                TENANT: Vivian Sagay


          On May 4, 1992, the above named owner filed a Petition for 
          Administrative Review against an order issued on March 30, 1992, by 
          a Rent Administrator, wherein the Administrator determined that the 
          tenant of the housing accommodations known as apartment 15P at 1020 
          Grand Concourse, Bronx, New York, had been overcharged.

          In the overcharge complaint that gave rise to this proceeding, 
          filed on February 28, 1989, the tenant alleged inter alia that the 
          owner had not provided her with a copy of the Apartment 
          Registration Form (Form RR-1) for her apartment.  The record 
          reveals in that regard: that the subject accommodations were 
          unoccupied at the time of the legislatively mandated initial 
          registration of 1984; that the owner then registered them as 
          "vacant"; that the complainant assumed occupancy in 1984; that the 
          owner did not amend the initial apartment registration to reflect 
          that fact; and that the owner duly filed, and served on the tenant, 
          all subsequent annual registration statements for the apartment.

          In the ensuing order, here appealed, the Administrator ordered a 
          total refund of $28,340.14, based on the following determinations 
          inter alia.  (1) The lawful "stabilized" rent of the last tenant 
          before the complainant had been $574.80 per month.  (2) In 
          calculating the overcharge herein, the lawful rent must be "frozen" 
          at that figure "due to the owner's failure to properly file amended 
          initial apartment . . . registration for . . . 1984."  (It must be 
          noted that while a footnote in the order states the rent is frozen 
          at $613.94 (what the complainant's lawful rent would have been on 
          May 1, 1984, in the absence of a freeze), the actual calculations 
          embody a freeze at the aforementioned $574.80.)  (3) "[B]ecause 
          evidence indicates that the overcharge was willful," overcharges 
          (dating from two years before the filing of the complaint) are to 
          be trebled for refund to the tenant.

          In attacking the Administrator's order, the owner-petitioner first 
          states that it complied with all pertinent registration 
          requirements, in that the owner properly registered the subject 
          premises as vacant, and was not required to do more until the 1985 


          annual registration statement became due, at which time it duly 
          filed and served same.  The argument is that neither the Rent 
          Stabilization Law and Code, nor the "Manual promulgated by DHCR 
          pertaining to 1984 Registration," clearly required an owner to file 
          an amended registration upon renting a vacant apartment in 1984.

          The petition next points up the aforementioned contradiction 
          between the Administrator's calculation chart and footnote, 
          asserting that the figure mentioned in the footnote should be 
          adopted (if the Commissioner affirms the propriety of a rental 

          The final citation of error is that treble damages ought not to 
          have been imposed, as the record demonstrates that any overcharge 
          herein was not willful.

          In response the tenant states inter alia: "I was never sent any 
          copies of apartment registration."

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

          The pamphlet "Instructions for Rent Registration Under the Omnibus 
          Housing Act of 1983," published by this Division for use in 1984, 
          reveals clearly, in at lease two places, that the procedure the 
          owner herein followed in 1984 was not correct.  The Introduction to 
          said instructions contains on page 1 the statement: "If an 
          apartment which is vacant on April 1, 1984 becomes occupied after 
          that date, an Apartment Registration form (RR-1) must be completed 
          and mailed within ninety (90) days after occupancy begins"; that 
          sentence is repeated almost verbatim on page 4 under the subtitle 
          "Apartment Registration."   Thus petitioner has shown no grounds 
          for its statement that no DHCR "Manual" called for a 1984 
          registration statement to be filed when a vacant unit became 
          occupied; and the owner's failure to file same constituted a 
          failure to comply with the initial rent registration requirement.  
          The penalty for such failure to comply pursuant to Section 2528.4 
          of the Rent Stabilization Code is that until such registration is 
          completed, the owner is barred from applying for or collecting any 
          rent in excess of the legal regulated rent in effect on the date 
          the housing accommodation became subject to the registration 

          Turning to the second argument for reversal, petitioner's claim 
          that any freeze should have been at a rental of $613.94 has caused 
          the Commissioner to check the administrator's calculations in that 
          regard, resulting in the following changes.  (1) In lieu of the 7% 
          increase granted by the Administrator for a prior tenant's three 
          year vacancy lease that commenced in June of 1981, the Commissioner 
          will allow an increase of 17% plus the 5% vacancy allowance over 
          the prior rent of $390.00; the applicable order of the Rent 
          Guidelines Board (number 12) provides for 17% unless the tenant 
          paid for her own heat, and there is no evidence of that having been 
          the case herein.  That change results in a lawful rent under the 
          lease in question of $475.80 (instead of the Administrator's 
          $436.80).  It is noted that the Administrator incorrectly 
          designated the lease as a two year lease.


          (2) For the next lease period, governed by Guidelines Board order 
          number 13, the authorized increases yield a lawful rent of $609.02 
          (instead of $559.10); the addition of $15.70, allowed by the 
          Administrator for new furniture installed during the vacancy 
          preceding the complainant's occupancy, yields $624.72 as the figure 
          to be "frozen," instead of the aforementioned $574.80.

          Turning finally to the argument that the Administrator should not 
          have trebled the rental overcharge to be refunded herein, the 
          Commissioner notes that in addition to the owner's fault regarding 
          the failure to initially register the subject apartment, the 
          overcharge herein did not stem solely from the resulting freeze; 
          rather the two tenants preceding the complainant were overcharged, 
          and even without a freeze, the complainant's initial rent would 
          have included an overcharge.  Further the rent would also be 
          subject to reduction pursuant to a service decrease order effective 
          December 11, 1988 under docket CJ610475S.  Based on the foregoing, 
          the owner has not shown that the overcharge was not willful, and 
          the Administrator's assessment of treble damages will therefore be 

          Because overcharges collected more than two years before the 
          complaint was filed cannot be trebled, the refund herein is 
          calculated thus: under the tenant's initial lease, the overcharge 
          equals the actual rent of $688.80 minus the aforementioned $624.72 
          times the 24 months thereof, plus interest to the date of the 
          Administrator's order; under the first five months of the 1986 
          renewal lease, it equals the actual rent of $733.57 minus the 
          frozen $624.72, times five plus interest; under the next five 
          months thereof, it is the reduced rent of $688.80 minus $624.72, 
          times five plus interest; under the remainder of that lease it is 
          $688.80 minus $624.72 times 14 times three (for treble damages); 
          and under the succeeding month-to-month tenancy it is the latter 
          overcharge times 47 months times three.  The total overcharge 
          during the aforementioned period is $15,591.87 including excess 
          security of $64.08.

          The owner is directed to reflect the findings and determinations 
          made in this order on all future registration statements, including 
          those for the current year if not already filed, citing this order 
          as the basis for the change.  The owner is further directed to 
          adjust subsequent rents to an amount no greater than that 
          determined by this order plus any lawful increases.

          If the owner has already complied with the Rent Administrator's 
          order and there are arrears due to the owner as a result of the 
          instant determination, the tenant shall be permitted to pay off the 
          arrears in 24 equal monthly installments.  Should the tenant vacate 
          after the issuance of this order or have already vacated, said 
          arrears shall be payable immediately.
          The Commissioner had determined in this Order and Opinion that the 
          owner collected overcharges of $15,591.87.  This order may, upon 
          expiration of the period for seeking review of this Order and 
          Opinion pursuant to Article Seventy-eight of the Civil Practice Law 
          and Rules, be filed and enforced as a judgment, or not in excess of 
          twenty percent per month of the overcharge may be offset against 


          any rent thereafter due the owner.  Where the tenant credits the 
          overcharge, the tenant may add to the overcharge, or where the 
          tenant files this order as a judgment, the County Clerk may add to 
          the overcharge, interest at the rate payable on a judgment pursuant 
          to section 5004 of the Civil Practice Law and Rules from the date 
          of the Rent Administrator's order to the date of the Commissioner's 

          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          it is 

          ORDERED, that this petition be, and the same hereby is, granted in 
          part, and that the Rent Administrator's order be, and the same 
          hereby is, modified in accordance with this Order and Opinion.  The 
          lawful rent, which was $624.72 (including an increase for new 
          furniture) on April 30, 1984, remains at that figure until the 
          freeze is removed by filing and service of the initial apartment 


                                             JOSEPH A. D'AGOSTA
                                             Deputy Commissioner


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