STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X SJR 6199
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: ID410004RP
Se Fai Chen, DRO DOCKET NO.: BE410360R
TENANT: Santa Arroyo
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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
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