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

          APPEAL OF                              DOCKET NO.HL410315RO
                                              :  DRO DOCKET NO.ZED410177R
          MOUNT SINAI HOSPITAL                                       

                                PETITIONER    :  TENANT:  Martin L. Krever 


               On December 13, 1993, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          November 12, 1993, by the Rent Administrator, 92-31 Union Hall 
          Street, Jamaica, New York, concerning the housing accommodations 
          known as 51 East 97 Street, New York, N.Y., Apartment No. 3E wherein 
          the Rent Administrator determined that the owner had overcharged the 
          tenant and assessed treble damages.

               The Administrative Appeal is being determined pursuant to the 
          provisions of  the Rent Stabilization Law and 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 commenced on April 10, 1990 when the 
          tenant filed a complaint of rent overcharge.  The tenant stated that 
          he had taken occupancy in August 1986 as a result of exchanging an 
          apartment in another building owned by the owner for the subject 

               In response to the complaint, the owner stated that prior to 
          its occupancy by the complainant, the subject apartment had been 
          occupied by an employee of the owner which rendered the apartment 
          exempt from rent regulation until rented to the complainant.The 
          owner also stated that it had rented the subject premises to the 
          tenant out of humanitarian considerations and had charged a fair 
          market rent.  The owner submitted a copy of the initial apartment 
          registration, registered as exempt in 1984, the tenant's initial 
          lease and documentation evidencing the use and occupancy by its 
          employee.  The owner did not submit evidence of having filed an 
          amended initial apartment registration or an annual registration for 


                In Order Number ZED410177R, the Aministrator froze the rent at 
          $575.00, the lawful stabilized rent in effect on August 1, 1986 due 
          to the owner's failure to properly file an amended initial apartment 
          registration.  The rent remained frozen due to the owner's failure 
          to properly file an annual apartment registration for 1987.  The 
          Administrator determined that the tenant had been overcharged in the 
          amount of $19,106.64, inclusive of treble damages.  
               In its appeal, the owner contends that the Administrator's 
          order should be modified as any overcharge found was not incurred  
          as a result of willful conduct.  The owner's failure to properly 
          register came about as a result of the special unique circumstances 
          under which the subject apartment was converted from exempt to rent 
          stabilized status.  Moreover, the owner contends that the imposition 
          of treble damages should be limited to no longer than two years 
          before the filing of the complaint and that the Administrator 
          incorrectly assessed treble damages on the entire overcharge.  

               In response to the appeal, the tenant asserts that because he 
          had no choice but was forced to rent a more accessible apartment, 
          the owner charged an unjustifiably high rent, and that such conduct 
          warranted the imposition of treble damages.  

                After careful consideration, the Commissioner is of the 
          opinion that this appeal should be granted in part.

               The record reveals that the subject apartment was continuously 
          exempt from rent regulation as occupied by an owner-employee  until 
          the tenant herein took occupancy in 1986.  As such, the first rent 
          was not subject to challenge.    As to the tenant's contention 
          regarding the initial rent, the Commissioner finds that the initial 
          rent was lawful within the framework of the Rent Stabilization Law 
          and Code.
          Since serving and filing the amended initial registration could not 
          change the initial rent agreed upon and the sole overcharge 
          determined by the Administrator arose out of the owner's failure to 
          register, the Commissioner accepts the owner's argument regarding 
          the lack of willfulness and determines that the treble damages 
          penalty should not be imposed in the instant matter.

               Although the owner's second argument regarding the time limit 
          in treble damages is correct pursuant to Section 2526.1(a)(2)(i) 
          which provides that a penalty of three times the overcharge may not 
          be based upon an overcharge having occurred more than two years 
          before the complaint is filed, it is not germane to the instant 
          facts where the first overcharge determined occurred less than two 
          years before the complaint's filing. Moreover, the Commissioner's 
          determination with respect to any imposition of treble damages makes 
          it unnecessary to further address this issue.

               Section 2526.1 provides inter alia for the assessment of 
          interest on all overcharges occurring on or after April 1, 1984.  
          Accordingly, the Commisioner has recomputed the overcharge to 
          include interest instead of treble damages and determines that the 
          overcharge to be refunded is $7403.78 including interest.  

               Pursuant to Code Section 2528.4, the failure to properly and 
          timely comply with the annual rent registration bars an owner from 


          collecting any rent in excess of the legal regulated rent on April 
          1st of the year for which an annual registration was required to be 
          filed.  The late filing of a registration results in the prospective 
          elimination of the penalty.  The Commissioner notes that the owner 
          filed the amended registration in 1992.  However, since the owner 
          has not filed an annual apartment registration for 1987, the 
          collectible rent is set at $575.00 until such time as the 
          registration is filed.

               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 $7,403.78.  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, granted in part, and, that the order of the Rent 
          Administrator be, and the same hereby is, modified in accordance 
          with this order and opinion.


                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner




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