HG410089RO
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. HG410089RO
: DISTRICT RENT OFFICE
Second Avenue Associates, DOCKET NO. FG410500R
TENANT: Kathleen Thomas
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
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
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.
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
HG410089RO
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
answer.
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.
HG410089RO
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
question.
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 $48,250.57. 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.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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