DOC. NO.: AJ 110099-RO
                                   STATE OF NEW YORK
                        DIVISION OF HOUSING AND COMMUNITY RENEWAL
                              OFFICE OF RENT ADMINISTRATION
                                       GERTZ PLAZA
                                 92-31 UNION HALL STREET
                                 JAMAICA, NEW YORK 11433
          
         ------------------------------------X
         IN THE MATTER OF THE ADMINISTRATIVE :   ADMINISTRATIVE REVIEW
         APPEAL OF                           :   DOCKET NO.: AJ 110099-RO
                                             :   DISTRICT RENT ADMINISTRATOR'S
            THOMAS E. HENRY                  :   DOCKET NOS. Q-3120470-R
                   and                                       CDR 22,643
            KENNETH G. FRIEDMAN, PETITIONERS :
         ------------------------------------X

               ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

         On various dates, the above-named petitioner-current-owner (Thomas E. 
         Henry) and former and current managing agent (Alfred S. Friedman 
         Management Corp.) filed petitions for Administrative Review against an 
         order issued on September 17, 1986 by a District Rent Administrator, 10 
         Columbus Circle, New York, New York, concerning housing accommodations 
         known as Apartment B6, 108-02 72nd Avenue, Forest Hills, New York, wherein 
         the District Rent Administrator determined that the current and prior 
         owners had overcharged the tenant.

         The issue in this appeal is whether the District Rent Administrator's 
         order was warranted.

         The applicable sections of the law are Sections 2520.6(i) and 2526.1 of 
         the Rent Stabilization Code.

         The Commissioner has reviewed all the evidence in the record and has 
         carefully considered that portion of the record relevant to the issue 
         raised by the administrative appeal.

         This proceeding was commenced on April 6, 1982 by the tenant's (Robert 
         Krupp) filing of a rent overcharge complaint.

         In its answer to the tenant's complaint, the current owner submitted a 
         complete rental history for the subject apartment.

         In Order Number CDR 22,643 issued September 17, 1986, the District Rent 
         Administrator determined that the tenant had been overcharged since July 
         1, 1979, and accordingly directed the owners to refund to the tenant 
         $2950.38 which included excess security and interest on that portion of 
         the overcharge occurring on or after April 1, 1984.

         The current and former managing agent in its petition contends in 
         substance that it was not the prior owner of the subject premises and at 
         no time did it hold title to the building.














          DOC. NO.: AJ 110099-RO

         The current owner in its petition contends in substance that it purchased 
         the subject premises on March 10, 1981 by way of a foreclosure sale, that 
         therefore it cannot be held liable for rent overcharges which occurred 
         prior to its ownership, that as a matter of law there can be no collusion 
         between a former and subsequent owner when the new owner takes title by 
         way of an executor's deed in a foreclosure sale, that it only collected a 
         security deposit of $175.80 and that therefore it is entitled to $375.01 
         in additional security.

         The tenant did not submit an answer to these petitions.

         The Commissioner is of the opinion that these petitions should be denied.

         A review of the record in the instant case indicates that Alfred S. 
         Friedman Management Corporation was listed as the landlord for the subject 
         apartment on the Landlord's Report of Statutory Decontrol dated October 
         17, 1977, was listed as the owner on the DC-2 Notice dated October 17, 
         1977, and was listed as the agent and signed the prior tenant's vacancy 
         lease.  Furthermore, the current owner, in its answer to the tenant's 
         complaint, listed Alfred S. Friedman Management Corp. as its managing 
         agent.

         Section 2520.6(i) of the Rent Stabilization Code defines an "owner" as

                   a fee owner, lessor, sublessor, assignee, net lessee, 
                   or a proprietary lessee of a housing accommodation in 
                   a structure or premises owned by a cooperative 
                   corporation or association, or an owner of a 
                   condominium unit or the sponsor of such cooperative 
                   corporation or association or condominium development, 
                   or any other person or entity receiving or entitled to 
                   receive rent for the use or occupation of any housing 
                   accommodation, or an agent of any of the foregoing ...

         Based on the definition above, the Commissioner finds that the 
         Administrator properly considered Alfred S. Friedman Management Corp. as 
         an "owner".

         Section 2526.1(f) of the Rent Stabilization Code provides in pertinent 
         part that for overcharges collected prior to April 1, 1984, an owner will 
         be held responsible only for his or her portion of the overcharges in the 
         absence of collusion or any relationship between such owner and any prior 
         owners.

         The evidence of record discloses that the current owner obtained title to 
         the subject premises on March 10, 1981 pursuant to a foreclosure sale.  
         However, a relationship existed between the current and prior owners due 
         to the fact that the same managing agent, Alfred S. Friedman Management








          DOC. NO.: AJ 110099-RO

         Corp., was employed by both owners.  Furthermore, the current owner 
         possessed a complete rental history for the subject apartment, yet 
         continued to overcharge the tenant.  Accordingly, the Commissioner finds 
         that the current owner and managing agent are jointly and severally liable 
         to the tenant for all overcharges ($2950.38) collected from July 1, 1979 
         through August 31, 1986.  This amount includes excess security and 
         interest on that portion of the overcharge occurring on or after April 1, 
         1984.  This finding is without prejudice to any action that the current 
         owner may have against the prior owner or managing agent for overcharges 
         reimbursed by the current owner which the prior owner or managing agent 
         had collected.

         Because this determination concerns lawful rents only through the date of 
         August 31, 1986 used in the Administrator's order being appealed, the 
         owner is cautioned to adjust subsequent rents to any amount no greater 
         than that determined by the Administrator's order plus any lawful 
         increases, and to register any adjusted rents with the Administrator's 
         order being given as the explanation for the adjustment.

         This order may upon the expiration of the period in which the owner may 
         institute a proceeding pursuant to Article 78 of the Civil Practice Law 
         and Rules, be filed and enforced as a judgment or not in excess of twenty 
         percent per month thereof may be offset against any rent thereafter due 
         the owner.

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

         ORDERED, that these petitions be, and the same hereby are, denied, and 
         that the District Rent Administrator's order be, and the same hereby is, 
         modified in accordance with this Order and Opinion.

         ISSUED:

                                                                                  
                                                      ELLIOT SANDER
                                                      Deputy Commissioner













                                  ADMINISTRATIVE REVIEW
                                   COVERING MEMORANDUM

         ARB Docket No.:                    AJ 110099-RO

         DRO Docket No/Order Nos.:          Q-3120470-R/CDR 22,643

         Tenant (s):                        Robert Krupp

         Owner:                             Thomas E. Henry/Alfred S. Friedman
                                            Management Corp.,

         Code Section:                 RSC 2520.6(i) & 2526.1

         Premises:108-02 72nd Avenue, Apt. B-6
         Forest Hills, New York


         Order and Opinion Denying Petition for Administrative Review

Record reveals that the current owner purchased the premises at a 
foreclosure sale on March 10, 1981 and that the current managing 
agent was also the managing agent of the prior owner.  
Accordingly, the current managing agent and current owner are 
jointly and severally liable for the entire overcharge.

         APPROVED:

         Processing Attorney:                                                     

         Bureau Chief:                                                           

         Deputy Counsel:                                                         

         Deputy Commissioner:                                                    

         Mailed copies of Order and Determination to:
             Tenant(s)      
             Owner             
             Tenant's Atty         
                  Owner's Atty          

             Date:                : by                  
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