GF 410052 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. GF 410052 RO
: DISTRICT RENT OFFICE
DOCKET NO. EB 410070 R
Broadway White Realty Co.,
TENANT: Theresa Haney
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
AND MODIFYING THE RENT ADMINISTRATOR'S ORDER
On June 10, 1992, the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on May 14, 1992, by the
Rent Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the housing accommodations known as 310 West 14th Street,
New York, New York, Apartment No. 5F, 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 tenants on February 12, 1990. The owner was
served with a copy of the tenant's complaint and submitted leases and
registration statements from February 1, 1983. The owner stated in
substance that the apartment was vacant from May 1, 1984 through June 1,
1986; underwent $6,000.00 worth of renovations prior to rental by the
prior tenant at $503.10 on June 1, 1986 which is the base date for the
subject apartment. The owner failed to submit bills or cancelled checks
for the alleged renovations as directed by the Rent Administrator or
even to describe the alleged renovation in any fashion.
In Order Number ZEB 410070 R, the Rent Administrator established the
lawful stabilized rent as $353.10 effective June 1, 1986, determined
that the tenants had been overcharged and directed a refund to the
tenants of $49,347.34 including treble damages on overcharges collected
on and after April 1, 1984.
GF 410052 RO
In this petition, the owner contends in substance that the Rent
Administrator had used an incorrect base date and rent in its
calculations; that the Apartment was vacant on April 1, 1985, therefore
the rent of $503.10, as the 1st rent charged and paid after the base
date of April 1, 1985 is the correct base date rent; that the Rent
Administrator had failed to consider the $6,000.00 worth of renovations
included in the $503.10 rent ; that bills were not forthcoming from the
prior owner; that the $6,000 was noted on the Rent Stabilization rider
to the June 1, 1986 lease; that treble damages are not warranted due to
the prior owner's failure to supply bills; that treble damages were not
restricted to the 2 year period from the date of filing of the complaint
and that the Rent Administrator failed to offset the arrears owed by the
tenants who ceased to pay rent in February 1991.
The owner cited the "Matter of Mittoli", Administrative Review Docket
#ARL 10945 K, in support of its contention that the rent of $503.10
charged and paid on June 1, 1986 was the correct base rent.
In answer to the owner's petition, the tenants state in substance that
there is no evidence that any renovations were done by the owner prior
to their renting the apartment, that the owner's bills should not be
accepted on appeal and they are probably fraudulent; that no offset for
back rent against the Rent Administrator's order is warranted because
the order only calculated the overcharge through the date they ceased to
pay the rent due to a breach of the warranty of habitability and that
the Rent Administrator used the correct rent and base date in her
The Commissioner is of the opinion that this petition should be granted
Section 2526.1(a)(3)(i) of the Rent Stabilization Code (hereafter RSC)
provides in pertinent part that the legal regulated rent for purposes of
determining an overcharge shall be deemed to be the rent shown in the
annual registration statement filed four years prior to the most recent
registration statement plus any subsequent lawful increases and
In the instant case, the complaint was filed in February 1990 and
therefore the most recent rent annual registration was April 1989. The
annual registration statement filed 4 years prior to April 1989 was
correctly cited by the Rent Administrator as April 1985.
The Commissioner notes that the owner's reliance upon the Matter of
Mittoli is misplaced because the facts in Mittoli involve the
establishment of an Initial Legal Registered Rent, the instant case
involves the calculation of the legal regulated rent.
Section 2520.6(f) of the RSC defines the legal regulated rent as the
initial legal registered rent (hereafter ILRR) as adjusted in accordance
with this code or the rent shown in the annual registration statement
filed 4 year prior to the most recent registration statement ...., plus
in each case, any subsequent lawful increases and adjustments.
In the instant case, the rent shown (not "charged and paid," as the
owner contends) in the annual registration filed 4 years prior to the
most recent registration was the rent of $309.74.
GF 410052 RO
Section 2522.1 of the RSC states that legal regulated rents may be
increased or decreased only as specified in the code.
Section 2522 further details the various adjustments permitted to legal
regulated rents, among which are increases to reflect Rent Guidelines
Board orders for vacancy and renewal leases; fair market adjustment
after decontrol; individual apartment improvements/new equipment;
building-wide Major Capital Improvements and hardship increases as
approved by DHCR.
The owner has failed to evidence entitlement to any such adjustments
above the ILRR of $309.74 to be included in the April 1985 or April 1986
annual registration while the subject apartment was vacant. Therefore,
the legal regulated rent for those annual registrations while the
apartment was vacant would be the ILRR of $309.74 unadjusted by either
guideline or other increases as specified above.
The Rent Administrator was therefore correct in utilizing the rent of
$309.74 as the base rent on the applicable base date of April 1, 1985.
An examination of the record in this case discloses that during the
processing of the case below, the Rent Administrator directed the owner
on two separate occasions to submit bills and cancelled checks to
substantiate claimed improvements made in the subject apartment.
However, the owner has failed to substantiate either below or on appeal
entitlement to an increase to the prior tenant's rent commencing June 1,
1986 for alleged renovations in the amount of $6,000.00 and therefore
the Rent Administrator was precluded from considering such improvements
in the computation of the legal regulated rent.
A review of the leases in the file reveals that the Rent Administrator
correctly computed the complainants' vacancy lease commencing February
1, 1987 above the legal regulated rent established for the prior
With regard to the owner's contention that the imposition of treble
damages 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 establishes 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 owner has not submitted sufficient evidence to
substantiate its claim that the overcharge was not willful in that it
has not established that any improvements were actually made in the
Further, the Rent Administrator computed the overcharge and correctly
imposed treble damages from February 1988 which commenced the 2 year
limitation period for the instant complaint filed in February 1990.
Prior to February 1988, the Rent Administrator assessed interest in
accordance with Chapter 403.
GF 410052 RO
However, the Commissioner determines that the owner is correct in its
contention that the arrears for non-payment of rent from March 1, 1991
through the date of the order should be offset against, the total
overcharge, therefore, the Administrator's order must be updated to
include the 15 month period, which was prior to the Administrator's
order, where both parties acknowledge no rent payments occurred. The
Administrator determined that the lawful stabilization rent for this
period should have been $448.89. Accordingly, the overcharge
determination is reduced by $6,733.35 ($448.89 x 15 = $6,733.35)
resulting in a total overcharge of $42,613.99.
Accordingly, the Rent Administrator's order was warranted.
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. Registration statements already on file, however,
should not be amended to reflect the findings and determination made in
this order. The owner is further directed to adjust subsequent rents to
an amount no greater than that determined by this order plus any lawful
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 be, and the same hereby is, granted in part,
and, that the order of the Administrator be, and the same hereby is,
modified in accordance with this order and opinion. The amount of the
rent overcharge, offset by arrears owed from March 1, 1991 through May
14, 1992, is $42,613.99.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner