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

          APPEAL      OF                                    DOCKET       NO.
                                                 AI        410204         RO
                                              :     D.R.O.    DOCKET     NO.
                                                 L 001928 - RV
                 JOAN McALLISTER,                                 

                                 PETITIONER   :  


               On September 30, 1986, the above-named petitioner-owner filed 
          an Administrative Appeal against an order issued on September  23,
          1986 by the District Rent Administrator, 92-31 Union Hall  Street,
          Jamaica, New York, concerning the housing accommodations known  as
          71 Charles Street, New York, New York, Apartment No. 3F. 

               The Administrative Appeal is being determined pursuant to the 
          provisions of 9 NYCRR 2522.5 and 9 NYCRR 2523.5.  

               The issue herein is whether the District  Rent  Administrator
          properly determined the tenant's complaint of owner's  failure  to
          renew lease.

               The District Rent  Administrator's  order,  appealed  herein,
          determined that the subject  apartment  is  subject  to  the  Rent
          Stabilization Law and directed the owner to  offer  the  tenant  a
          renewal lease.  

               It was noted in the order that the  Division  has  previously
          ruled that where on May 31, 1968, a  multiple  dwelling  contained
          six or more  units,  the  owner's  subsequent  conversion  of  the
          building to a five unit dwelling does not operate  to  remove  the
          subject building from the Rent Stabilization  Law;  and  that  the
          actual number of units as listed on the Certificate  of  Occupancy
          on the base date should be controlling on the issue of whether the 
          subject building is within the purview of the  Rent  Stabilization

               On appeal, the petitioner-owner alleges, in  substance,  that
          the subject building is not subject  to  rent  stabilization;  and

          ADM. REVIEW DOCKET NO. AI 410204 RO
          that the parties are  involved  in  litigation  on  the  identical

               On October 27, 1986, the  tenant  responded  to  the  owner's
          administrative appeal by submitting a copy  of  the  February  28,
          1986 order of Judge Joseph  B.  Goldman  dismissing  the  holdover
          petition brought by the owner against the tenant under  Index  No.
          L & T 477941/85 wherein the court  determined  that  the  evidence
          established that the subject buildng was a  multiple  dwelling  of
          six units on the effective base date controlling  under  the  Rent
          Stabilization Law; that the owner's renovation in 1976 whereby two 
          apartments were combined into one duplex unit for the owner's  own
          use did not operate to remove  the  building  from  the  effective
          provisions of the Rent Stabilization Law; and that the  tenant,who
          took occupancy in 1978, two years  after  the  alteration  of  the
          premises, is entitled to a renewal lease.  

               The owner replied on November 6, 1986 by stating  that  Judge
          Goldman's order of dismissal had been appealed and the matter  was
          currently under consideration in the Appellate Term.

               After a careful  consideration  of  the  entire  evidence  of
          record the Commissioner is of the opinion that the  administrative
          appeal should be denied.

               A review of the record indicates that the District 
          Rent Administrator properly determined that the subject  apartment
          was subject to rent stabilization and that the tenant was entitled 
          to a renewal of her lease.   The  Division  and  the  Courts  have
          consistently  held  that  absent   a   showing   of   "substantial
          rehabilitation" of the building, and no such claim has  been  made
          in the instant proceeding, a reduction  in  the  number  of  units
          alone is not sufficient to exempt from rent stabilization coverage 
          a building which contained the requisite number of  units  on  the
          applicable base date.  The reduction in the number of  units  does
          not affect coverage of the remaining units and  does  not  deprive
          the remaining tenants of stabilized status.  In addition, a person 
          who rents after such a  reduction  to  fewer  than  six  units  is
          subject to stabilization (Fleur v. Croy 520 N.Y.S. 2d  1010  [N.Y.
          City Civ. Ct., 1987]).   

               The Commissioner notes that, as cited in Fleur v.  Croy,  the
          owner's  appeal  against  the  order  of  Judge  Goldman  was  not
          successful (McAllister v. Winters, N.Y.L.J.  March  13,  1987,  p.
          12, col. 1 [App. Term, 1st Dept.].

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

               ORDERED, that this administrative appeal  be,  and  the  same
          hereby is,  denied  and  that  the  order  of  the  District  Rent
          Administrator be, and the same hereby is, affirmed. 


          ADM. REVIEW DOCKET NO. AI 410204 RO

                                          ELLIOT SANDER
                                          Deputy Commissioner



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