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

     APPEAL OF                              DOCKET NO.: AJ 110465-RO
                                            DRO DOCKET NO.: Q 3121965-R
           ROSA MEX,                                        CDR 22,476
                           PETITIONER    : 


     On October 15, 1986, the above named petitioner-owner filed a Petition for 
     Administrative Review against an order issued on September  17,  1986,  by
     the District Rent Administrator, 10 Columbus Circle, New York,  New  York,
     concerning housing accommodations  known  as  Apartment  C-3,  25-58  35th
     Street,  Astoria,  New  York,  wherein  the  District  Rent  Administrator
     determined that the owner had overcharged the tenant.

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

     The  applicable  section  of  the  law  is  Section  2526.1  of  the  Rent
     Stabilization Code.

     The Commissioner has reviewed all of 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 March 23, 1984 by the tenant's (James  P.
     Sullivan) filing of a rent overcharge complaint with  the  New  York  City
     Conciliation and Appeals Board (CAB), the  agency  formerly  charged  with
     enforcement of the Rent Stabilization Law.

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

     In Order Number CDR 22,476 issued September 17, 1986,  the  District  Rent
     Administrator determined  that  the  tenant  had  been  overcharged  since
     February 1, 1980, and accordingly, directed the owner  to  refund  to  the
     tenant $1,562.57 which included  excess  security  and  interest  on  that
     portion of the overcharge occurring on or after April 1, 1984.

     In its petition, the owner contends in substance that  the  District  Rent
     Administrator's order is incorrect and should be revoked because:

          1) the Administrator failed to consider the fact that the 
             allowable increases exceeded the actual rent collected for
             several years and also failed to credit the owner with the 
             allowable increases;


          DOCKET NUMBER: AJ 110465-RO
          2) the prior tenant's vacancy lease was increased by 2-1/2% on 
             March 1, 1979 pursuant to Order Number 10B;

          3) the complaining tenant informed the owner shortly after 
             filing his complaint that he had withdrawn the complaint;

          4) the DHCR does not have jurisdiction over this matter as the 
             tenant's complaint was under the jurisdiction of the CAB and
             was subsequently withdrawn.

     In  response  to  the  owner's  petition,  the  tenant  has  requested   a
     determination of the legal rent for the subject apartment.

     The Commissioner is of the opinion that this petition should be denied.

     On examination of the rental history for the subject  apartment  indicates
     that the Administrator correctly computed the  legal  stabilization  rents
     and the amounts of overcharge.

     The Commissioner notes that prior tenants of the  subject  apartment  were
     charged less than the maximum legal rent and the owner herein  thought  it
     could base future rent increases  on  the  amount  that  could  have  been
     charged.  However, it is  an  error  to  assume  that  a  subsequent  rent
     increase can be calculated from the  maximum  rent  an  owner  could  have
     charged, even when, in fact, the owner charged less.   The  rule  is  that
     such an owner has waived any rent over  the  rent  actually  charged,  and
     that the actual rent is the lawful rent from  which  subsequent  increases
     must be computed.

     With regard to the owner's contention that  it  was  entitled  to  a  2.5%
     increase on March 1, 1979 pursuant to  Guidelines  10B,  the  Commissioner
     notes that Rent  Guidelines  Board  Order  Number  10B  permitted  a  2.5%
     temporary fuel surcharge (which did not become part of the base  rent  for
     guidelines purposes) for the prior tenant's one year vacancy  lease  which
     commenced on July 1, 1978, but that the owner mistakenly thought that  the
     Guidelines 10B increase was a permanent increase.

     A further review of the rental history for the subject apartment discloses 
     that there were two different tenants during the Guidelines 11 period  and
     the owner apparently thought it was entitled to  two  Guidelines  11  rent
     increases.  However, the compounding of guidelines  increases  within  the
     same guidelines period is prohibited.  Accordingly, the Commissioner finds 
     that the Administrator correctly limited the owner to  one  Guidelines  11

     With regard to the owner's contention that the tenant  had  withdrawn  his
     complaint  prior  to  the  issuance  of  the  Administrator's  order,  the
     Commissioner notes that the  owner  has  not  submitted  any  evidence  to
     support this bare allegation.  Furthermore, this issue was raised  by  the
     owner for the first time on appeal, and thus, it may not be considered  by
     the Commissioner at this stage of the proceeding as this is not a de  novo

     Finally, with regard to the owner's contention that the DHCR does not have 
     jurisdiction over the tenant's complaint because the complaint was made to 
     the CAB, the Commissioner notes that on April 1,1984, responsibility for 

          DOCKET NUMBER: AJ 110465-RO
     administration of rent stabilization in New York City was transferred from 
     the CAB to DHCR.  Thus, DHCR  does  have  jurisdiction  over  the  instant

     This order may upon the expiration of the period in which  the  owner  may
     institute a proceeding pursuant to Article 78 o 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 this petition be, and the same hereby is, denied,  and  that
     the District Rent Administrator's  order  be,  and  the  same  hereby  is,


                                            ELLIOT SANDER
                                         Deputy Commissioner


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