HL410315RO
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.HL410315RO
: DRO DOCKET NO.ZED410177R
MOUNT SINAI HOSPITAL
PETITIONER : TENANT: Martin L. Krever
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ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE
REVIEW
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
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 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
apartment.
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
1987.
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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
HL410315RO
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
increases.
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.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
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