New York State
Division of Housing and Community Renewal
Office of Rent Administration
Gertz Plaza, 92-31 Union Hall St.
Jamaica, New York 11433
Public Information: (718)739-6400


STATE AND CITY RENT AND EVICTION REGULATIONS
EMERGENCY TENANT PROTECTION REGULATIONS
NEW YORK CITY RENT STABILIZATION CODE

ADVISORY OPINION:  89-2  (DECEMBER 21, 1989)

FALSE STATEMENTS: CRIMINAL LIABILITY AND CIVIL PENALTIES

This Advisory Opinion is issued pursuant to:

State Rent and Eviction Regulations ("State Rent Regs") -
      sections 2106.1 and 2109.8;

City Rent and Eviction Regulations ("City Rent Reg") -
      sections 2206.3 and 2209.8;

Emergency Tenant Protection Regulations ("TPR")
      section 2505.1, 2505.2, and 2506.2;

Rent Stabilization Code ("RSC") -
      sections 2525.1, 2525.2, 2526.2 and 2527.11.


I. AUTHORITY

A. RENT LAWS AND REGULATIONS

RENT CONTROLLED HOUSING ACCOMMODATIONS OUTSIDE NEW YORK CITY

Pursuant to section 10(1) of the Emergency Housing Rent Control
Law ("State Rent Law"), it is unlawful for any person to demand
or receive any rent for any housing accommodations in excess of
the lawful maximum rent, or to attempt to do so.

Filing, in connection with an application to increase the lawful
maximum rent, of documents or reports containing statements or
entries which are false in any material respect is an attempt to
"demand" or "receive" an illegal rent in violation of this
section.  A landlord who demands or receives increased rents
pursuant to an order granting such application is in violation of
this section.

Section 2106.1(a) of the State Rent Regs. imposes penalties upon
any person who willfully violates such provision of the State
Rent Law, and any person who makes any statement or entry which
is false in any material respect in any document or report which
is required to be kept or filed under the State Rent Law or
Regs., including any rent registration statement, or who
willfully omits or neglects to make any material entry in any
such document or report.

A person who is convicted of any of these acts or omissions is
subject to a fine of up to $5,000 and/or imprisonment for up to
one year. Whenever the DHCR has reason to believe that any person
is liable to such punishment, it may certify the facts to the
district attorney of the county having jurisdiction of the
violation.  As defined in Criminal Procedure Law section
1.20(32), "District Attorneys" includes the state Attorney
General.  Therefore, such certification of facts may also be made
to the Attorney General.

RENT CONTROLLED HOUSING ACCOMMODATIONS IN NEW YORK CITY

Sections 26-412(a) of the City Rent and Rehabilitation Law ("City
Rent Law"), and 2206.1(a) of the City Rent Regs., also proscribe
any demand or receipt of excess rent, or attempts to do so, and
the making of materially false statements or entries in any
document or report which is required to be kept or filed under
the City Rent Law or Regs., including any rent registration
statement, or a willful omission or neglect to make required
material entries in any such document or report.  DHCR is
authorize to impose similar criminal penalties as those discussed
above, and to certify facts constituting violations to the
district attorney for prosecution.

In addition, pursuant to section 2206.3 of the City Rent Regs.,
the DHCR may also impose civil penalties upon any person engaging
in such acts by order after hearing, and bring an action to
recover the penalty in a court of competent jurisdiction.  Such
penalties, which are payable to the DHCR, may be in the amount of
$100.00 for the first unlawful act, and $500.00 for each
subsequent offense.

RENT STABILIZED HOUSING ACCOMMODATIONS OUTSIDE NEW YORK CITY

Pursuant to TPR section 2505.1(a), it is unlawful for any person
to demand or receive any rent for any housing accommodation in
excess of the legal regulated rent, or to ATTEMPT to do so.

Filing, in connection with an application to increase the legal
regulated rent, or in connection with a proceeding to determine a
legal regulated rent, of documents or reports containing
statements or entries which are false in any material respect is
an attempt to "demand" or "receive" an illegal rent in violation
of this section.  An owner who demands or receives increased
rents pursuant to an order granting such application is in
violation of this section.

TPR section 2505.2 prohibits direct or indirect evasion of legal
regulated rents.  Filing of materially false rent registration
statements, or any documents or reports containing materially
false statements in connection with an application to increase
the legal regulated rent, or in connection with a proceeding to
determine a legal regulated rent, is an evasionary practice in
violation of this provision.

Pursuant to TPR section 2506.2(b), the DHCR may impose a penalty
of up to $250 (plus reasonable costs and attorney fees of the
proceeding), upon an owner for each knowing violation of the
Emergency Tenant Protection Act or the TPR. This penalty is
payable to the tenant.

RENT STABILIZED HOUSING ACCOMMODATIONS IN NEW YORK CITY

Pursuant to RSC section 2525.1, it is unlawful for any person to
demand or receive any rent for any housing accommodation in
excess of the legal regulated rent, or to ATTEMPT to do so.

Filing, in connection with an application to increase the legal
regulated rent, of documents or reports containing statements on
entries which are false in any material respect is an attempt to
"demand" or "receive" an illegal rent in violation of this
section.  An owner who demands or receives increased rents
pursuant to an order granting such application is in violation of
this section.

RSC 2525.2(a) prohibits direct or indirect evasion of legal
regulated rents.  Filing of materially false rent registration
statements, or any documents or reports containing materially
false statements in connection with an application to increase
the legal regulated rent is an evasionary practice in violation
of this provision.

Pursuant to RSC section 2526.2(b), the DHCR may impose a penalty
of up to $250 upon owners for each knowing violation of the Rent
Stabilization Law or the RSC. This penalty is payable to the
DHCR.

B. PENAL LAW

Provisions of the Penal Law which may apply to false statements
filed with the DHCR include:

1.   Offenses involving false written statements -

     Falsifying business records with intent to defraud (class E
     felony or A misdemeanor, depending upon degree);

     Offering a false instrument for filing (class E felony or A
     misdemeanor, depending on degree, and whether there was
     intent to defraud the state;

     Issuing a false financial statement describing a person's
     financial condition or ability to pay with intent to defraud
     (class A misdemeanor).

2.   Perjury and related offense -

     Perjury in the second degree (depending upon whether the
     false statement is made in a subscribed written instrument
     for which an oath is required by law or appropriate
     regulatory provision; for example, an affidavit.  Class E
     felony)

     Knowingly making a punishable false written statement(the
     written instrument does not require notarization but bears a
     notice that false statements made therein are punishable;
     for example, an affirmation. Class A misdemeanor)

3.   Schemes to defraud, based upon a systematic ongoing course
     of conduct with intent to defraud more than one person by
     false or fraudulent representations.  (Class E felony or A
     misdemeanor, depending upon how much money is obtained from
     one or more such persons)

4.   Prosecution for forgery and related offenses may also be
     appropriate under certain circumstances (such offenses,
     depending upon the crime charged, and the degree thereof,
     are punishable as felonies or misdemeanors).

Generally, class E felonies are punishable by imprisonment of
from one to four years, and class A misdemeanors by imprisonment
of up to one year.


II. CRIMINAL PROSECUTION

As discussed above, the DHCR may certify facts for criminal
prosecution to the District Attorney or State Attorney General
under the State and City Rent Regs. In addition, the DHCR may
also make referrals to the District Attorney having jurisdiction,
or to the State Attorney General under Executive Law section
63(3).

In appropriate cases, the DHCR may pursue criminal prosecution of
owners, AS WELL AS ANY OTHER PERSONS (including owners' agents
and vendors), who either demand or receive a rent in excess of
the lawful rent, or who attempt to do so, or who knowingly make
materially false statements or entries in any document or report
filed with the DHCR, including applications for rent increases.
Such prosecution will be pursued either by certification of facts
pursuant to the State and City Rent Regs, or referral to a
district attorney or the State Attorney general.


III. CIVIL PENALTIES

The DHCR may impose the maximum civil penalties against any
person who files a false registration statement with the DHCR, or
a false statement pursuant to any proceeding before it, including
proceedings to determine legal regulated rents or maximum legal
rents, as well as rent increase applications.

In general, increases in rent, other than lease guidelines and
individual apartment improvement increases for New York City rent
stabilized housing accommodations, may be lawfully collected from
tenants only if the DHCR approves the increases.  In order to
obtain the DHCR's approval, owners must first apply to the DHCR
and submit appropriate supporting documentation.

Filing, in order to obtain a rent increase, of a rent
registration statement or an application containing statements of
fact known to be false in any material respect, is deemed to be
an attempt to demand or receive an unlawful rent, or to evade
lawful rents.

Where the DHCR, in reliance upon such materially false
statements, grants a rent increase, the owner is deemed to have
demanded or received an unlawful rent, and to have evaded the
lawful rent.  In addition, where the owner obtains lease
guidelines increases based upon a false registration statement or
statements filed with the DHCR, the owner is also deemed to have
demanded or received an unlawful rent, and to have evaded the
rent laws.

Filing of a materially false registration statement or rent
increase application, which relates to more than one housing
accommodation, may be deemed to constitute separate and distinct
attempts to demand or receive unlawful rents, or to evade lawful
rents, warranting the imposition of a separate penalty for each
affected housing accommodation.

Owners of rent stabilized housing accommodations may be assessed
$250 per unit for each unlawful attempt or act.  If an owner of
rent stabilized housing accommodations have actually received an
unlawful rent as a result of the granting of the application, the
DHCR may impose treble damages on the amount of the overcharge in
addition to the civil penalty of $250 per unit.

Owners of rent controlled housing accommodations may be assessed
$100 per unit for each first unlawful act or attempt, and $500
per unit for each subsequent offense.

In addition, if a rent increase application is found to contain
intentionally false material statements as to any individual
item, the DHCR may reject the entire application, and permanently
bar the owner from again seeking a rent increase for any of the
work which is the subject of the application.


IV. ILLUSTRATIONS OF PENALTIES

1.  An owner files an application seeking rent increases from 35
    rent stabilized tenants based 3 distinct Major Capital
    Improvements ("MCI's").  The DHCR determines that the MCI
    application includes a knowing overstatement of the costs
    incurred by the owner for one of the improvements.  Based
    upon this determination, the DHCR may impose a civil penalty
    for evasionary practices against the owner in the amount of
    $17,500 (35 x $500), reject the entire application, and
    permanently bar the owner from applying for a rent adjustment
    based on ANY of the improvements set forth in the fraudulent
    application including improvements, the costs of which were
    not overstated. Similarly, if the MCI contains knowing
    overstatements of the cost of more than one of the
    improvements, the penalty will be increased accordingly
    (i.e., 2 improvements = 2 x 35 x 500 = $35,000).

2.  An owner's MCI application, which contains intentionally
    false statements of material fact, is granted by the DHCR,
    and the owner begins to collect the rent increase.  Upon
    subsequently determining that approval of the application was
    fraudulently obtained, the DHCR may revoke the order,
    permanently bar the owner from applying for a rent adjustment
    based on ANY of the improvements included in the application,
    and impose civil penalties, and treble damages (for rent
    stabilized units), on the overcharge.

3.  An owner of a building containing 25 rent controlled housing
    accommodations applies for an order adjusting the maximum
    rent for a successive two-year period ("MBR").  In support of
    such application, the owner intentionally files an Operating
    and Maintenance Expense Report which the DHCR determines to
    contain false statement of material fact.  Based upon this
    determination, the DHCR may impose a civil penalty against
    the owner in the amount of $2,500 (25 x $100), reject the
    application, and bar the owner from reapplying for an MBR
    increase within the same biennial cycle.  If an order
    adjusting the maximum rent has been issued prior to the
    determination of the fraud, the DHCR may revoke the order and
    reduce the rent to the level in effect prior to the granting
    of the application.

    In addition, the civil penalties may amount to $2,500 (25 x
    $100) for the first month that the overcharge in each
    apartment was collected and $12,500 (25 x $500) for each
    subsequent month that the overcharge in each apartment was
    collected.


V.  REQUEST TO CLOSE WITHOUT ACTION

An owner may request that an application for a rent adjustment be
"closed without action."  However, in the event that a subsequent
application is filed for the same or related items, the "closed"
application will be consolidated with such subsequent action, and
all relevant documents filed at any time will be considered in
determining the subsequent application.

A request to close an application without action will not be
granted after a Notice of Charges for filing false statements
with such application has been issued by the Office of Rent
Administration.


Dated : December 21, 1989

ELLIOT SANDER
Deputy Commissioner
for Rent Administration

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DHCR Advisory Opinions are issued by the New York State Division
of Housing and Community Renewal (DHCR) and represent the
agency's interpretation of the rent laws.

On any challenge or appeal, the agency may claim it has wide
"discretion" to interpret the rent laws as it sees fit, as long
as it's interpretation is not arbitrary, capricious or an abuse
of discretion. In such instances, the agency must show it's
interpretation is consistent with past practice and rational.
Discretion is different from mandates where the agency is obliged
to follow certain policies, practices or interpretations.
Mandates are usually based in (and stated in) the law.

In many instances, the agency refuses (or fails) to issue
official interpretations in order to maintain it's discretion. In
practice, such unaccountable discretion is seen by some as an
abuse of the intent of the rent laws.

Electronic versions of the documents on TenantNet
are for informational purposes only and there is no guarantee
they will be accepted by any court (or even DHCR) as true copies
of DHCR policy. The reader is advised to obtain true copies of
these documents from DHCR.

Also see DHCR Policy Statements, DHCR Operational Bulletins, the
Rent Stabilization Code, the Rent Stabilization Law and various
Rent Control Statutes.

Every attempt has been made to conform to the original Advisory
Opinions as issued by DHCR; TenantNet makes no
representation the enclosed material is current or will be
applied as written.  The reader is advised that DHCR often fails
to properly apply, interpret or enforce housing laws.  Since
housing laws are complex and often contradictory, it is
recommended the reader obtain competent legal advice from a
tenant attorney or counseling from a tenant association or
community group. (rev. 3/13/96) DHCR documents
are public documents; the electronic version of such documents
have been developed by TenantNet and any added value, enhancements
and/or proprietary features are copyright 1994, 1995 and 1996 by
TenantNet. These documents may be freely distributed provided they
remain intact as herein presented, including this and the top
informational banner referencing TenantNet as the original provider.
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For more information or assistance. call the DHCR Rent Infoline
at (718) 739-6400, or visit your Borough Rent Office.

Queens Central Office
92-31 Union Hall St. 4th Fl.
Jamaica, NY 11433
(718) 739-6400

Bronx
One Fordham Plaza
Bronx, NY 10458
(718) 563-5678

Brooklyn
250 Schermerhorn St.
3rd Floor
Brooklyn, NY 11201
(718) 780-9246

Lower Manhattan
156 William Street
9th Floor
NY, NY 10038
(212) 240-6011, 6012
South side of 110th St. and below

Upper Manhattan
163 W. 125th St.
5th Floor
NY, NY 10027
(212) 961-8930
North side of 110th St. and above

Staten Island
350 St. Mark's Place
Room 105
Staten island, NY 10301
(718) 816-0277

Nassau County District Rent Office
50 Clinton Street, 6th Floor
Hempstead, NY 11550
(516) 481-9494

Westchester County District Rent Office
55 Church Street, 3rd Floor
White Plains, NY 10601
(914) 948-4434

Rockland County District Rent Office
94-96 North Main St.
Spring Valley, NY 10977
(914) 425-6575

Albany Regional Office
119 Washington Avenue
Albany, NY 12210
(518) 432-0596

Buffalo Regional Office
Ellicot Square Building
295 Main St., Room 438
Buffalo, NY 14203
(716) 856-1382
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