GF 410210 RO
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 ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: GF 410210 RO
50 CARMINE STREET ASSOCIATES,
DRO DOCKET NO.: FD 410040 RK
TENANT: JOHN BERTRAM
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On June 26, 1992, the above-named petitioner filed a Petition for
Administrative Review against an order issued on June 2, 1992 by
the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York
concerning the housing accommodations known as 50 Carmine Street,
New York, New York, Apartment 11, wherein the Administrator
determined that the owner had overcharged the tenant.
The issue herein is whether the order of the Rent Administrator was
warranted.
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 on September
30, 1987 by the tenant of an overcharge complaint in which the
tenant alleged that the owner had not honored orders, resulting
from a previous overcharge complaint and two service complaints, in
which the rent was reduced.
In response to the complaint, the owner stated that a refund of a
prior overcharge determined under Docket No. TC 081531 G, had been
given to the tenant; the owner requested dismissal of the
complaint.
In an order issued on March 5, 1991 under Docket No. ZBI 410606 R,
the Administrator determined that the owner had collected an
overcharge of $19,126.59 inclusive of excess security and treble
damages.
GF 410210 RO
Subsequently, by letter dated April 5, 1991, the owner requested
reconsideration. It was determined that the order had established
the rent at an incorrect amount and that the actual rent paid by
the tenant had been incorrectly listed; that these errors warranted
reopening the proceeding.
Upon reconsideration, in order No. ZFD 410040 RK, the lawful rent
was established at $349.76 effective October 1, 1990 and the
overcharge was recomputed to $5,342.83 inclusive of interest on the
overcharge collected between November 1984 and September 1985, and
treble damages on the overcharge collected thereafter. The owner
was given partial credit for the refund previously given to the
tenant.
In its appeal, the owner contends that the order should be reversed
for the following reasons:
1) the legal rent as of April 1, 1984 was
incorrectly established at $226.75 whereas the
issue of the legal rent, established at
$263.03 in Docket No. ZTC 081531 G, was res
judicata;
2) treble damages should not have been imposed on
any overcharge resulting from the collection
of rent which was in accord with either the
order issued in 1987 or in 1991. Moreover,
given the varying orders by the Division of
Housing and Community Renewal (DHCR) the owner
was confused (as was the DHCR) as to the
lawful rent; any resulting overcharge should
not be considered willful;
3) the partial credit should have been taken into
account before assessing treble damages;
4) the tenant was undercharged during various
periods. The owner should have been credited
with the amounts deliberately undercharged to
offset prior overcharges.
In response to the appeal, the tenant contends that the owner has
consistently ignored DHCR orders and that treble damages are
appropriate. With respect to the owner's alleged confusion, the
tenant asserts that the owner should know the law as it relates to
rent under the Rent Stabilization Code and it should not have been
confused as to the correct rent. The tenant also contends that the
partial credit should have no effect on the assessment of treble
damages. The tenant further contends that no deliberate
undercharges were ever made by the owner. Finally, the tenant
contends that treble damages should have been assessed on the
entire overcharge complaint in 1984 and that the owner continued to
GF 410210 RO
overcharge even after a determination of the original complaint was
made.
The Commissioner is of the opinion that this appeal should be
granted in part.
It is noted that the legal stabilized rent was established at
$263.03 for the period October 1, 1981 through September 30, 1984
under Rent Guidelines Board Order No. 13. Based upon findings
under Docket Nos. 83302 P and 83584 B that there had been a
reduction in services, the collectible rent was reduced by one
Guideline to $226.75 and frozen at that level until the reduced
services were restored. The legal rent should not have been
affected by the ordered reduction in rent.
Accordingly, the Commissioner finds that the legal regulated rent
should be:
4-1-84 $263.03
10-1-84 $286.70
10-1-86 $327.50
10-1-88 $356.98
10-1-90 $381.97
The monthly rent the owner was entitled to collect (collectible
rent) was frozen at $226.75 until the rent was restored pursuant to
Order No. CI 410145 OR as of November 1, 1988.
The overcharges to be refunded pursuant to the Administrator's
order is amended as follows:
Period beginning Rent Charged Legal Rent Overcharges
Collectible Rent Calculations
6-1-89 $382.16 $356.98 $25.18 X 10
Mos =
$251.80
6-1-90 $382.16 $356.98 $25.18 X 4
Mos =
$100.72
10-1-90 $408.91 $381.97 $26.94 X 13
Mos =
$350.22
11-1-91 $369.82 $381.97 -0-
GF 410210 RO
All remaining overcharge computations (total $892.06) remain in
full force and effect. Therefore, the total overcharge is as
follows:
Overcharge = $1594.80
Treble Damages $2073.20
Interest $ 318.95
$3986.95
Partial Credit $1605.83
Total Refund due $2381.12 October 1, 1984 to May 31, 1992
Section 2526.1 of the Rent Stabilization Code provides for the
imposition of treble damages or willful overcharges.
Pursuant to the Code, an overcharge is presumed willful unless the
owner proves by a preponderance of the evidence that the overcharge
was not willful. The instant owner has failed to meet its burden
of proof. The Commissioner notes that it is the policy of the DHCR
that a full refund to a tenant before the issuance of an order is
deemed to show lack of willfulness. (pursuant to Policy Statement
No. 89-2) The partial credit tendered by the instant owner does
not show such a lack of willfulness. Accordingly, the
Commissioner finds that treble damages were properly assessed on
the overcharges collected beginning October 1, 1985.
Further the Commissioner finds no documentary evidence in the
record that the owner deliberately undercharged to offset the
overcharge due to be refunded.
With respect to the tenant's request for treble damages on the
entire overcharge, the Commissioner notes that since the tenant did
not file his own petition, his request cannot be considered in this
appeal.
This order may, upon the expiration of the period in which the
owner may institute a proceeding pursuant to Article Seventy-Eight
of the Civil Practice Law and Rules, be filed and enforced by the
tenant in the same manner as a judgment or not in excess of twenty
percent thereof per month may be offset against any rent thereafter
due the owner.
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 the order of the Rent Administrator be, and the same
hereby is, modified in accordance with this order and opinion.
GF 410210 RO
ISSUED:
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JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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