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

      APPEAL OF                              DOCKET NO. AJ410103RO

                                           : DISTRICT RENT OFFICE
                                             DOCKET NO:  L3116128R
                Pan Am Equities, Inc.,                   CDR 21572

                                             TENANT: Patricia Rivera     

                            PETITIONER    : 

                         MODIFYING ADMINISTRATOR'S ORDER

      On October 2, 1986 the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on August 28, 1986  by the 
      Rent Administrator, 10 Columbus Circle, New York, New York concerning 
      the housing accommodations known as apartment 2E at 43 West 16th Street, 
      New York, New York wherein the Rent Administrator determined that the 
      owner had overcharged the tenant. The order incorrectly listed the 
      apartment number as being 2F rather than 2E.

      The Commissioner notes that this proceeding was filed 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 overcharge and fair market 
      rent proceedings provide that determination of these matters be based 
      upon the law or code provision 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 issue in this appeal is whether the Rent Administrator's order was 

      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 originally commenced by the filing in March, 1984 of 
      rent overcharge complaint by the tenant, in which she stated that she 
      had commenced occupancy on January 6, 1983 at rent of $814.50 per month.

      In answer, the owner stated that a rent review had been approved by the 
      Attorney General's office, and that there had been no overcharges.  The 
      owner submitted a rental history chart, presumably the one furnished the 
      Attorney General.

      In an order issued on August 28, 1986 the Administrator, using the lease 
      terms and rents from the owner's chart, calculating a default rent for 
      the base date tenant in 1977 as being the lowest registered 1984 rent 
      for the same size apartment, increasing that default rent by Guidelines 

      and vacancy adjustments to obtain a lawful rent for the complainant, and 
      imposing interest, determined an overcharge of $3,318.34 through January 
      31, 1986.  The order determined lawful rents of $734.02 and $785.40 in 
      the tenant's two leases.

      In its petition, the owner asserted in substance that the DHCR had no 
      jurisdiction because of the Assurance of Discontinuance, and that the 
      rental history showed that there had been no overcharge.

      The owner subsequently, based upon the discovery of questionable 
      practices by two former employees, withdraw that defense.  It submitted 
      evidence that the base date was October 9, 1977 because of the receipt 
      of J-51 benefits.  It submitted rental records for each tenancy, 
      resulting in a rental history different from the one submitted earlier, 
      with the rent charged the prior tenant being $664.50, rather than 
      $783.50 as previously claimed and as used by the Administrator. [The 
      owner's multi-million dollar lawsuit against its two former corporate 
      Vice Presidents in charge of leasing accused them among other things of 
      forging rent histories.] It calculated an overcharge of $2,999.73, 
      including interest, with lawful rents of $676.83 and $724.21.  (The 
      owner's chart inadvertently lists $821.98 in the tenant's second lease 
      as well as in the next tenant's lease, but the listed overcharge of 
      $147.31 [$871.52 minus $724.21] per month clearly indicates that the 
      owner added 7% to $676.83 and got $724.21.  Also, the next tenant's rent 
      was based on $724.21.)

      The Commissioner is of the opinion that this petition should be denied, 
      and that the Administrator's order should be modified.

      Using the rental history supplied by the owner would result in an 
      overcharge, including interest through the date of the Administrator's 
      order, of $2,900.99, rather than $2,999.73 as calculated by the owner, 
      or $3,318.34 as calculated by the Administrator.  [The owner's interest 
      calculation consisted of multiplying the calculated overcharge by 9%.   
      If the owner had calculated 9% interest to August 31, 1986 on the 
      monthly overcharges occurring in April, May, June, July and August of 
      1984, it would have arrived at the lower figure of $2900.99.]  While, if 
      the owner's rent history was to be accepted, the overcharge due the 
      tenant would be three or four hundred dollars less than that calculated 
      by the Administrator, the lawful rent would be $724.21 per month in the 
      lease commencing February 1, 1984, rather than $785.40 as calculated by 
      the Administrator.  (The owner's use of a monthly overcharge 
      approximately $60 more than calculated by the Administrator would have 
      resulted in an overcharge calculation higher than the Administrator's 
      were it not that the Administrator calculated overcharges through 
      January 31, 1986, whereas the owner stopped its overcharge calculations 
      on August 31, 1984, when the tenant vacated.)  With Guidelines and 
      vacancy increases this would result in a current lawful rent 
      approximately $80-$90 a month less than that based on the 
      Administrator's figures, quickly wiping out the small benefit in the 
      amount of overcharge in the present case.  For the foregoing reasons, 
      the Commissioner declines to accept the owner's rent history in the 
      determination of the overcharge herein.

      The Commissioner's order is modified only to the extent of removing 
      excess security of $86.12 to reflect the fact that the tenant vacated in 
      1984, and to correct the apartment number to 2E.

      The owner is directed to reflect the findings and determinations made in 
      the Administrator's order on all future registration statements, 

      including those for the current year if not already filed, citing the 
      Administrator's Order as the basis for the change.  Registration 
      statements already on file, however, should not be amended to reflect 
      the findings and determinations made in the Administrator's order.  The 
      owner is further directed to adjust subsequent rents to an amount no 
      greater than that determined by the Administrator's order plus any 
      lawful increases.

      The Commissioner has determined in this Order and Opinion that the owner 
      collected overcharges of $3,232.22.  This order may, upon expiration of 
      the period for seeking review of this Order and Opinion pursuant to 
      Article Seventy-eight of the Civil Practice Law and Rules, be filed and 
      enforced as a judgment.  Where the tenant files this order as a 
      judgment, the County Clerk may add to the overcharge interest at the 
      rate payable on a judgment pursuant to Section 5004 of the Civil 
      Practice Law and Rules from the issuance date of the Rent 
      Administrator's Order to the issuance date of the Commissioner's Order.

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

      ORDERED, that this petition for administrative review be, and the same 
      hereby is, denied and that the order of the Rent Administrator be, and 
      the same hereby is, modified in accordance with this order and opinion.  
      The total overcharge is $3,232.22 as of August 31, 1984.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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