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

      ------------------------------------X  SJR 6199
      APPEAL OF                              DOCKET NO.: ID410004RP

       Se Fai Chen,                          DRO DOCKET NO.: BE410360R

                                             TENANT: Santa Arroyo             


      On November 22, 1989, the above-named owner filed a Petition for 
      Administrative Review against an order issued on October 20, 1989, by a 
      Rent Administrator, concerning the housing accommodations known as 
      Apartment 4A at 79 Allen Street in New York City, in which the 
      Administrator  had determined to award the tenant thereof, treble 
      damages for rental overcharges suffered.

      This petition, originally docketed at number DK410253RO, was first 
      dismissed by the Commissioner as untimely filed.  The petitioner then 
      sought relief from the Supreme Court under Article 78 of the Civil 
      Practice Law and Rules, and the matter has since been remitted on the 
      parties' stipulation, for the Commissioner's determination of the 

      This proceeding was initiated by the tenant's overcharge complaint of 
      May 1987.  The tenant alleged therein that the owner was charging an 
      additional $15.00 per month "because he register[ed] the apartment as 
      Rent Stabilized," and that she believed that charge to be unlawful 
      because the apartment should have been considered rent controlled.

      The owner's answer stated inter alia that the complaint should be 
      dismissed because it had been filed too long after service on the tenant 
      of the "RR-1" form.

      In July, 1989, the tenant wrote to the Administrator that the owner had 
      been "charging rent under rent stabilization since 1982," that the 
      tenants had "signed the leases then without knowledge of what was going 
      on," and that she should be considered a rent-controlled tenant since 
      she had moved to the subject apartment prior to July of 1971.

      A month later the owner wrote to the Administrator:  "The rent is 
      incorrect.  I acknowledge that the current rent is $308.27."  The owner 
      added that that he should not be liable for treble damages because of 
      misapplied legal theory concerning the low rent adjustment.

      Attached to that letter was a statement signed by the owner and the 
      tenant that read:


           [T]he parties agree to the following facts and request the 
           withdrawal of  tenant's overcharge with prejudice.
           Owner agrees to refund $390.96 . . . on or before August 25, 

           The tenant's monthly rent will be $325.22 on a 1 year renewal 
           lease starting 9/1/89 . . . 

      The Administrator then wrote to the tenant. "[D]o you wish to withdraw 
      your complaint[?] Yes or no?" to which the tenant replied:

           I do not wish to withdraw my complaint.  I only agree to take 
           the $390.96 for Rent overcharge since 1984, but I wish to 
           initiate a Section 36 proceeding in order to establish my rent 
           control status;  That [is] why I started all this proceeding.

      (Emphasis in original.)

      In the ensuing order, here appealed, the Administrator (a) found that an 
      overcharge of $390.96 had been collected through August 31, 1989, (b) 
      found that during the subsequent lease period, the owner had charged 
      less than he legally could have, (c) trebled the aforementioned 
      overcharge for the reason that the evidence showed it to have been 
      willful and (d) subtracted the refunded $390.96 from the trebled amount 
      in determining the net refund to the tenant.

      The instant petition attacks determination "c" above.  It states inter 
      alia that the overcharge herein resulted from one error -- the 
      assessment of a supplemental increase under Rent Guidelines Board order 
      number 18 that had been permissible only under number 17 -- which in the 
      instant circumstances, including the owner's lack of sophistication and 
      the $390.96 refund, was not willful.

      In response the tenant "request[s] that the petition for Administrative 
      Review on my part be withdraw[n].  He was kind enough to repa[y] the 
      overcharge.  Reverse the findings of treble damages. (Emphasis in 

      The Commissioner is of the opinion that this petition should be         

      The Administrator found that the tenant's first two lease periods 
      included overcharges of 50 cents and 52 cents per month, amounts that 
      the Commissioner finds are de minimis, for which the imposition of 
      treble damages is not warranted.  During the second of those periods, 
      the owner was permitted, under Guideline 17, to collect an additional 

      With regard to the owner's taking of an impermissible $15.00 low rent 
      allowance purusant to Guideline 18 when he had already received such an 
      lowance under Guideline 17, it is noted that the owner and tenant 
      entered into a settlement whereby the resulting overcharge was refunded.  
      The tenant only wanted to pursue the complaint on the mistaken belief 
      that the subject apartment was rent controlled.  However in 1994, under 


      docket number AD21413, an order had been issued finding that the subject 
      apartment was not subject to rent control.

      Based on the foregoing settlement, which included a full refund of the 
      overcharge, and on a subsequent rent rollback greater than was 
      necessary, the Commissioner will find that the overcharge herein was not 
      willful, and that the Rent Administrator should have terminated the 
      proceeding due to the settlement.

      In the absence of willfulness, the treble damages assessed by the 
      Administrator will be hereby removed.  Since the untrebled overcharge 
      was refunded prior to the Administrator's order by way of settlement, 
      there is no outstanding overcharge.

      If the owner has already complied with the Rent Administrator's order 
      and there are arrears due to the owner as a result of the instant 
      determination, the tenant shall be permitted to pay off the arrears in 
      12 equal monthly installments.  Should the tenant vacate after the 
      issuance of this order or have already vacated, said arrears shall be 
      payable immediately.

      THEREFORE, in accordance with the Rent Stabilization Law and Code, it is

      ORDERED, that this petition be, and the same hereby is, granted.  


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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