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

      APPEAL OF                              DOCKET NO. HG410089RO

                                          :  DISTRICT RENT OFFICE
           Second Avenue Associates,         DOCKET NO. FG410500R
                                             TENANT: Kathleen Thomas          
                            PETITIONER    : 


      On July 20, 1993, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on June 16, 1993, by the 
      Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 104 Second Avenue, 
      New York, New York, Apartment No. 21, wherein the 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.  

      The proceeding was originally commenced by the tenant's filing of a rent 
      overcharge complaint in July 1991.  

      The owner was served with a copy of the tenant's complaint.  In an 
      answer dated March 3, 1993, the owner stated in substance that it had 
      filed a Chapter 11 Bankruptcy Petition but because it was unaware of the 
      tenant's complaint at the time of its filing, it had not listed the 
      tenant as a claimant.

      Subsequently, on April 23, 1993, the owner was sent a final notice, 
      directing the owner to submit proof of registration for 1988, 1989, 1991 
      and 1992.  Also sent to the owner was a final notice of imposition of 
      treble damages, affording the owner an opportunity to rebut a finding of 
      willfulness.  The owner sent no response.

      In Docket Number ZFG410500R, the Administrator established the lawful 
      stabilized rent at $477.75 effective May 1, 1991 but based upon the 


      owner's failure to register, determined that the collectible rent was 
      $426.56.  The Administrator determined that the tenant had been 
      overcharged and directed a refund to the tenant of $45,250.57 including 
      treble damages through June 30, 1993.

      In this appeal, the owner contends that the Administrator's order should 
      be reversed for the following reasons:

           1) The DHCR had been notified of the bankruptcy proceeding and 
           under the applicable Bankruptcy Law, the DHCR was stayed from 
           processing the overcharge complaint.  The DHCR should have notified 
           the owner that it was continuing to process the complaint, thereby 
           affording the owner the opportunity to bring the matter before the 
           Bankruptcy Court; 

           2) The DHCR erred in its finding on registration.  The subject 
           apartment was registered at a rent of $650.00;

           3) The tenant did not pay the full amount of rent as computed by 
           the Administrator in its refund directive.

      The tenant contends that the Administrator's order should be sustained 
      on the following bases:

           1) The owner was granted an extension to answer but failed to 
           respond further;

           2) Copies of registration information, sent to the DHCR when the 
           complaint was filed, were verified by the DHCR; 

           3) The record contains copies of cancelled checks submitted by the 
           tenant that prove that $1000 per month was paid from May 1, 1991 
           through June 30, 1993.

      The Commissioner is of the opinion that the petition should be denied.

      The fact that the owner may have filed a bankruptcy petition does not 
      serve to stay the tenant's overcharge proceeding under the Rent 
      Stabilization Law and Code although the Bankruptcy Court may impose 
      limitations on the actual collection of the overcharge by the tenant.  
      The owner was kept apprised of the ongoing processing of the overcharge 
      complaint, given, at its request, an extension to answer and notified of 
      the critical status of the proceeding before the issuance of the order 
      but elected nevertheless not to further respond after its initial 

      With regard to the owner's lack of compliance with the Code's 
      registration requirements, the Commissioner finds that the Administrator 
      correctly determined that the owner had failed to register the subject 
      apartment for the years 1988, 1989, 1991 and 1992.  The Administrator 
      made no finding as to the annual registration for 1990 as the record 
      reveals that the owner did file the 1990 registration, the registration 
      cited without a date in the owner's appeal.  However, said registration 
      did not cure the prior failures to register.  When an owner fails to 
      properly register stabilized housing accommodations, Code Section 2528.4 
      provides, in pertinent part, that the rent be frozen until such time as 
      the required registration is completed.  The penalty was correctly 
      applied in the instant case.


      Review of the record reveals that the owner's contentions, offered 
      without proof, about the amount of rent paid are incorrect.  Cancelled 
      checks show that the tenant paid full rent for the time period in 

      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 

      The Commissioner has determined in this Order and Opinion that the owner 
      collected overcharges of $48,250.57.  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 pursuant to any applicable bankruptcy protection 
      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
                                      Deputy Commissioner


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