GE610034RO
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
APPEAL OF ADMINISTRATIVE REVIEW
DOCKET NO.: GE610034RO
Kreisel Co.
DRO DOCKET NO.: DB610431R
TENANT: Vivian Sagay
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN
PART
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
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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
freeze).
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
requirement.
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.
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(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
upheld.
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
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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
order.
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
registration.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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