AJ 210531 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 210531 RO

               BJP Incorporated,               DISTRICT RENT ADMINISTRATOR
                                               DOCKET NO.: K-3107668-RT
                                   PETITIONER              CDR 24645
          -----------------------------------X

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                       IN PART

               On October 30, 1986 the above named petitioner owner filed a 
          Petition for Administrative Review against an order of  the  Rent
          Administrator  issued  October  15,  1986.  The  order  concerned
          housing accommodations known as Apt. 12 located  at  467  Pacific
          Street, Brooklyn, New York.  The  Administrator  determined  that
          the tenant had been charged excess rent and fixed the  amount  at
          $1718.34 including interest and excess security.

               The Commissioner  has  reviewed  the  record  and  carefully
          considered that portion relevant to the  issues  raised  by  this
          appeal.

               The Commissioner notes that this  proceeding  was  initiated
          prior to April 1, 1984.  Sections 2526.1(a)(4) and  2521.1(d)  of
          the Rent Stabilization Code (effective  May  1,  1987)  governing
          rent overcharged and fair market rent  proceedings  provide  that
          determination of these matters be based  upon  the  law  or  code
          provisions in  effect  on  March  31,  1984.   Therefore,  unless
          otherwise  indicated,  reference  to   sections   of   the   Rent
          Stabilization Code (Code) contained herein are  to  the  Code  in
          effect on April 30, 1987.

               The tenant commenced this proceeding by filing a Fair Market 
          Rent Adjustment application on March 29, 1984.   The  application
          included a statement by the tenant to the effect  that  he  moved
          into the subject apartment on July 1, 1974 at a monthly  rent  of
          $160.00.  The tenant stated his belief that the rent charged  and
          paid on June 30, 1974 was $65.00 per month.

               The application was served on the prior owner on January 29, 
          1985 along with a request for a copy of  the  Notice  of  Initial
          Legal Regulated Rent, (DC-2) plus proof of service, on the  first
          stabilized tenant.  The Administrator also  demanded  a  complete
          rental history from  the  base  date.   On  August  5,  1985  the
          Administrator informed the owner that the fair market rent  would
          be determined by considering:

               "The maximum Rent for the  unit  in  question  plus  the
               Special Guidelines order issued by the  Rent  Guidelines
               Board in effect when this tenant moved in; and







          AJ 210531 RO
               A Comparability study of  rents  for  the  subject  line
               and, if you choose, rents prevailing in  the  same  area
               for substantially similar housing accommodations."

               A response was received on September 4, 1985 from 97  Bergen
          Street Corp. who advised that it was the new owner of the subject 
          building as of July 5, 1985.  Two leases were submitted, one  for
          the period March 1, 1979 to February 28, 1980 and for the  period
          from January 1, 1984 to December 31, 1985.  Another  request  for
          comparability data was sent to the then  owner  on  February  20,
          1986 and a Final Notice of Pending Default was sent on  July  31,
          1986.  No response was received.

               In the absence of any comparability data, the  Administrator
          determined the rent  by  use  of  the  Maximum  Base  Rent  (MBR)
          increased  by  the  percentage  provided  for  in   the   Special
          Guidelines Order  issued  by  the  Rent  Guidelines  Board.   The
          Administrator also utilized the rental history  provided  by  the
          parties, although said history did not include  the  period  from
          March 1980 to January 1984.

               Initially, the Administrator determined that  the  Emergency
          Tenant  Protection  Act  prescribed  that  Fair  Market   Appeals
          challenging an initial rent must be rejected if the initial  rent
          does not exceed a  formula  specified  in  the  Emergency  Tenant
          Protection Act (the 1974 Maximum Rent under rent control plus  an
          appropriate  guidelines  allowance).   The  rent  resulting  from
          application of that formula in this case is $146.82.

               Since  the  initial  rent  being  challenged  in  this  case
          exceeded the level which the statute established as the  standard
          for permitting a Fair Market Rent Appeal, the tenant's appeal was 
          not rejected.

               The Administrator went on to find that the tenant  had  been
          charged excess rent and computed the total at $1718.34  including
          interest on all excess rent charged after April 1, 1984.

               The new owner of the subject apartment,  petitioner  herein,
          filed this appeal from the above described order.  The petitioner 
          requests reversal stating that it bought the building on April 2, 
          1986  and  made  substantial  improvements  therein.   Petitioner
          claims that the tenant was overcharged during a period when  they
          did not own the building and that all leases  in  its  possession
          were  supplied  to  the  Administrator.   Petitioner  claims  its
          "belief" that the tenant's initial lease for  $160.00  per  month
          began in 1976 and not 1974 as  found  by  the  Administrator  and
          takes issue with  the  Administrator's  finding  that  the  legal
          regulated rent in 1976 was $146.82.  The petitioner also  asserts
          that it submitted five leases to the Administrator but only three 
          are reflected in the rent  calculation  chart.   Copies  of  five
          leases were attached to the petition.

               Finally, the  petitioner  contends  that  the  Administrator
          failed  to  include  certain  surcharges  allowed  by  the   rent
          guidelines for low rents.  The tenant did not file a response.

               After a careful review of the evidence  in  the  record  the
          Commissioner is of the  opinion  that  this  petition  should  be






          AJ 210531 RO
          granted in part.

               A review  of  the  record  reveals  that  the  Administrator
          properly  determined  the  fair  market  rent  for  the   subject
          apartment and the excess rent to be refunded to the  tenant.   In
          the absence of comparability data the initial rent  was  computed
          by increasing the 1974 Maximum Base Rent of  $127.67  by  15%  as
          stated in Rent Guidelines Board Order No.6.  Subsequent increases 
          were allowed based on the  two  leases  submitted  by  the  prior
          owner.  The other leases that the  owner  claims  were  submitted
          were not in the record before the Administrator and  pursuant  to
          section  2529.6  of  the  Rent  Stabilization  Code  may  not  be
          considered for the first time on appeal in the absence  of  proof
          that they were  submitted  to  the  Administrator  or  could  not
          reasonably have been offered or included in the proceeding  prior
          to the issuance of the order being appealed.   Since  the  record
          contains a package of documents submitted by the prior  owner  to
          the Administrator, there is no reason to conclude that additional 
          leases were also submitted.

               A review of the Administrator's  computations  reveals  that
          appropriate increases were added for low rents as  authorized  by
          the applicable guidelines.

               There is also no basis for the petitioner's contention  that
          the complaining tenant's initial lease commenced in  1976  rather
          than 1974.  The tenant and the prior owner agreed that the tenant 
          first took occupancy on July  1,  1974  and  the  petitioner  has
          submitted no evidence to substantiate a different date.  


               Finally,  the  petitioner  is  advised  that  an  owner   is
          responsible only for his  or  her  portion  of  the  excess  rent
          actually collected and since the petitioner did not purchase  the
          building until  1986  and  the  excess  rent  determined  by  the
          Administrator was only up through December 1984,  the  petitioner
          is not responsible for any of it.

               The tenant may proceed against the former owner in  a  court
          of competent jurisdiction to recover the excess rent computed  by
          the Administrator.

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

               ORDERED, that this  petition  be  and  the  same  hereby  is
          granted to the extent of determining that the petitioner  is  not
          responsible for the excess  rent  owed  to  the  tenant  but  the
          Administrator's order is affirmed in all other respects.

          ISSUED:

           
                                                       ELLIOT SANDER
                                                       Deputy Commissioner
    

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