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Re: the actual recent $100.000 overchargeRe: Definitely not "failure to register"/ more like fraud

Posted by satori on March 08, 1999 at 20:31:06:

In Reply to: Re: Definitely not "failure to register"/ more like fraud posted by satori on March 08, 1999 at 19:27:53:

Here is the actual case I was refering to.

Case Caption:
Cooke v. DHCR
Issues/Legal Principles:
New owner is responsible for old owner's rent overcharge even though new owner
purchased at a judicial sale.
rent overcharge; judicial sale exemption
Supreme Court, New York County
Hon. Justice Lehner
February 3, 1999
NYLJ, page 26, col 3
Referred Statutes:
RSC Section 2526.1(f)(2)
Tenant filed a rent overcharge complaint with the DHCR. In 1990, the rent
administrator made a determination of rent overcharge and treble damages in the total
amount of about $101,000.00. The landlord then filed a Petition for Administrative
Review ("PAR") which the DHCR's deputy commissioner ultimately decided in 1998.
The DHCR decided that the new owner (Ogrin), who acquired the premises at a
judicial sale in 1992, is not responsible for the overcharges collected by the prior
owner. Ordinarily, the new owner is responsible for overcharges collected by the old
owner, but there is an exemption in the event of a judicial sale, because the new owner
usually does not obtain rent records from the prior owner. (A judicial sale takes place
when the old owner defaults on mortgage payments; this sort of owner does not
usually pass rent records on to the new owner). The DHCR reached this determination
without considering evidence that the tenant informed the new owner about the rent
administrator's 1990 overcharge order. The DHCR reasoned that the new owner's
knowledge of a DHCR order is not equal to knowledge of rent history and that the old
owner had filed a PAR to challenge the rent administrator's order.

The tenant challenged the DHCR's determination and the Court agreed, finding that
the DHCR's order was arbitrary and capricious. The DHCR should have considered
evidence that the new owner had actual knowledge of the rent administrator's order.
The 1990 order was based upon leases that the DHCR had received from the prior
owner. The 1990 order was certainly a "record sufficient to establish the legal
regulated rent" and should have put the new owner on notice of the overcharge,
rendering the "judicial sale" exemption inapplicable. The court remanded the case to
the DHCR and required the DHCR to make a factual determination regarding the issue
of whether the new owner had actual knowledge of the rent administrator's 1990 order
prior to the judicial sale.

: I don"t understand all the pro-landlord clauses that are in my opinion
: clearly unconstitutional under a number of grounds like due process of law
: ectera. Where were all the tenant lawyers when they had these
: clauses put in the rule of law? Its not the 1920's anymore when rent was $50 a
: month. I read a recent court decision
: here on tenant. net and a tenant was awarded one hunderd thousand
: dollars ($100.000.00) in back rent for being overcharged.
: I think the whole rule of laws should be rewritten to be pro-tenant, in
: light of the fact that legal aid does not handle most of these
: sort of cases anymore, and most tenants can't afford to hire
: a lawyer so they can get a fair trial in the courts that are
: designed for lawyers . Lawyers spend eight years going to college
: to learn "legal writing" and a tenant is expected to learn that
: and more in less then three days. its just not fair.And our laws, should
: have written within it a balance for this clear injustice in the process.

: : Are you telling me there is no recourse now?
: : There is a clause in the PAR, [1]"If the owner has already complied with the Rent Administrator's order and [2]there are arrears due to the owner as a result of the instant determination . . ."
: : Q: How is LL required to prove that he has complied?
: : He tried to force agreement from tenant in a series of letters running off total overcharges as a rent credit with tenant disputing some counterclaims and amounts thereof/3-day notice to tenant threatening non-payment/eviction . . . tenant paid under protest.
: : Isn't LL required to have satisfied validity of his counterclaims to a court of competent jursdiction?
: : Q: After the PAR in October 1998, LL's attorney had sent a letter, again with a 3-day demand under threat of eviction for a rent figure that he calculated from DHCR's revoking rent overcharge that rolled back the rent to the amount consistent with the previous rent histories, their decision being based on the purported "amended registrations" for the previous two years TOTALLY IGNORING THAT FACT THAT THEY WERE NOT FAILUREs TO REGISTER, indeed, the rents were registered [not however the actual and excessive amounts I was paying], nor was I listed as the current tenant as required - isn't this clearly FRAUD AND EVASION OF THE LAW? - reasons to challenge a PAR that are not limited by that 60-day limitation for appeal?
: : Q: How is the LL required to prove he is entitled to collect the higher rent figure he calculated? And to justify that he is entitled to collect the arrears as a result of the instant determination in the PAR?

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