STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X SJR 7083
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.HA410056RO
: DRO DOCKET NO.FC410241R
Associated Realties TENANT: Anthony Marcus
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On January 20, 1993 the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
January 8, 1993 by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York concerning the housing accommodation known as 308
West 97th Street, Apartment 23, New York, New York wherein the
Administrator determined that the tenant had been overcharged.
Subsequent thereto, the petitioner-owner filed a Petition in the
Supreme Court pursuant to Article 78 of the Civil Practice Law and
Rules requesting that the "deemed denial" of its Petition for
Administrative Review be annulled. The proceeding was remitted to
the Division of Housing and Community Renewal (DHCR), and the
owner's petition is herein decided on the merits.
The Commissioner has examined all of the evidence of record and has
carefully considered that portion of the record relevant to the
issues raised in the administrative appeal.
The tenant commenced this proceeding on March 12, 1991 when the
tenant filed a complaint of rent overcharge.
In response to the complaint, the owner asserted that all rent
increases had conformed to applicable rent guidelines and that the
tenant's rent included a rent increase based on 1/40th of the cost
of improving the subject apartment. The owner submitted bills and
cancelled checks in support of its claim for a $753.00 rent
increase for individual apartment improvements.
When a check with DHCR computerized rent records revealed that the
owner had failed to register the subject apartment in 1984 (the
initial registration), 1985 and 1986, the owner corrected its
omission by filing the 1984, 85 and 86 registrations in November
In the order here under review, the Administrator froze the rent at
the lawful rent in effect on April 1, 1984, due to the failure to
register in 1984 and 1985, permitted an increase of only $492.46
for approved apartment improvements and directed the owner to
refund to the tenant an overcharge of $48,399.97 inclusive of
treble damages and excess security for overcharge collected from
January 1, 1991 to October 31, 1992.
In its appeal, the owner contends that the Administrator's order
should be reversed as arbitrary and capricious in that not only has
the subject building always been timely registered but also two
months before the issuance of the instant order, the owner refiled
the 1984, 1985 and 1986 registrations, correcting any alleged
defects. The owner also contends that all rents charged were
consistent with appropriate guidelines, that there is no actual
overcharge and that the owner has established a pattern of
compliance with rent registration requirements as set forth in DHCR
Policy Statement 92-3 (which addresses the issue of service of
registration forms) and therefore, it was erroneous to find a rent
overcharge. For a second contention, the owner asserts that the
Administrator erred in disallowing $10,424.25 of apartment
improvements in direct contravention of Policy Statement 91-1.
Lastly, the owner contends that there is no rational basis for the
imposition of treble damages in that:
1) The owner properly registered the subject apartment for
1984, 1985 and 1986 in November 1992;
2) the Code does not provide for the imposition of treble
damages where an owner fails to register. The penalty is
clearly stated in Code Section 2528.4 entitled "Penalty for
failure to Register" whereas the treble damage penalty is
cited only in Code Section 2526.1. As a principle of
statute construction, it has been held that where there is
a general provision and a specific provision in the same
statute, the general provision does not overrule the
particular and applies only when the specific provision
In response, the tenant contends that the Administrator's order is
correct and is supported by DHCR records which show that rent
registrations were not properly filed as well as the fact that the
rents charged are based upon false claims: 1) the alleged belated
filing of the registrations in November 1992 can affect only
subsequent rents and not any prior rents. Further, there is no
proof that the registrations were served on the tenant; 2) the
increase based upon alleged improvements must be disregarded; the
owner lied in stating that the last registered rent was $1500.00;
the alleged improvements were not made; the owner improperly lumped
together various repairs and alleged improvements in a number of
apartments and divided the total amount spent by the number of
apartments to assign a cost for the subject apartment without
specifying the particular work done in each apartment and without
itemizing the cost. Finally, the tenant contends that in view of
the late registrations and the lack of proof of improvements, the
proceeding should be remanded in determine the legal rent.
The owner, in reply, states that all the registration forms at
issue were served on the tenant herein, in January 1993. The owner
reiterates that treble damages are inappropriate as there is no
evidence of willfulness on the part of the owner and further
asserts that the amounts disallowed were spent for items that were
necessary for the installation of individual improvements and
should have been permitted pursuant to Policy Statement 91-1. Along
with its reply, the owner submitted proof of service of the
registration forms on the tenant herein in January 1993.
After careful consideration, the Commissioner is of the opinion
that this petition should be denied.
Registration of housing accommodations is governed by part 2528 of
the Rent Stabilization Code. Pursuant to Code Section 2528.1, an
owner must register each housing accommodation subject to the Rent
Stabilization Law on April 1, 1984 within 90 days after such date.
Code Sections 2528.2 and 2528.3 enunciate registration
requirements. Despite the owner's claim that it timely complied
with registration requirements, it has not submitted documentation
to prove that it timely and properly complied with the registration
requirements of the Code. Late registration filing, as is the case
here, does not relieve the penalty imposed by Code Section 2528.4
but results only in the prospective elimination of the penalty. It
is noted that the overcharge determination herein only went up to
October 31, 1992- before the November 1992 owner's filing of the
1984 and 1985 registrations.
With respect to the application of the treble damage penalty to the
failure to register, the Commissioner notes that Code Section
2528.4 establishes the overcharge which is then penalized by Code
Section 2526.1. The two Code provisions complement each other.
Furthermore, a finding of willfulness is warranted where there is
evidence of a patent fabrication in the record. The rent rider
attached to the tenant's initial lease states that the 1990
registered rent was $1500.00. The lease rent in April 1990 was
$532.47. The owner has offered no explanation for the discrepancy.
Additionally, a portion of the overcharge was due to the owner's
charging a rent increase for items that clearly constituted repairs
and maintenance for which no rent increase was warranted.
Section 2522.4(a) permits an owner to increase the rent by 1/40th
the cost of individual apartment improvements. In the order here
at issue, the Administrator approved a rent increase of $492.46,
1/40th of $19,698.20, determined by the Administrator as qualifying
for a rent increase. Costs of $10,424.75 for painting, plastering
and miscellaneous carpentry work was correctly disallowed as having
been spent on ordinary maintenance and repair, not qualifying for
an individual apartment improvements rent increase.
Policy Statement 91-1, upon which the owner relies in its appeal
for an additional rent increase, concerns demolition costs
necessary in effecting qualified improvements. Painting,
plastering and miscellaneous carpentry do not qualify as such
demolition costs and the owner may not take a rent increase for
their cost on that basis.
Policy Statement 92-3, upon which the owner also relies in its
appeal, does not support a finding that the owner substantially
complied with all registration requirements during the time that
this proceeding was pending prior to November 1992.
Since the tenant did not file his own appeal, the Commissioner
finds it inappropriate to consider the tenant's contentions
regarding individual apartment improvements.
However as to the tenant's question as to what the current lawful
rent should be, the parties are advised that since the subject
apartment was properly registered for all required years with DHCR
and service of registrations effectuated on the tenant herein by
January 1993, the legal regulated rent as of February 1993 would be
$1118.53 plus any lawful increase including renewal lease increases
to which the owner is entitled.
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
determinations 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 increases.
The Commissioner has determined in this Order and Opinion that the
owner collected overcharges of $48,399.97. 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
issuance date of the Rent Administrator's Order to the issuance
date of the Commissioner's Order.
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.
JOSEPH A. D'AGOSTA