AK 410402-RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO.: AK 410402-RO

                                                 DISTRICT RENT OFFICE
               57 West Associates,               DOCKET NO.: L-3111505-R

                                                 TENANT:    Allen     Cohen
                                     PETITIONER  PRIOR OWNER: J.M. Rose

                                       IN PART

          On November 6, 1986, the  above-named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          October 2, 1986, by the Rent Administrator, 10  Columbus  Circle,
          New York, New York, concerning the housing  accommodations  known
          as 57 West 93rd Street, New York, New  York,  Apartment  No.  4F,
          wherein the Rent Administrator  determined  that  the  owner  had
          overcharged the tenant.

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

          This proceeding was commenced on March 27,  1984  by  the  tenant
          filing a complaint of rent overcharge  with  the  New  York  City
          Conciliation and Appeals Board  (CAB),  one  of  the  predecessor
          agencies to the Division of Housing and Community Renewal (DHCR). 
          The tenant commenced occupancy on June  15,  1979  at  a  monthly
          rent of $325.00 pursuant to a two year lease.
          On September 18, 1984, the DHCR sent the prior owner  a  copy  of
          the tenant's complaint with instructions to file  an  answer  and
          complete rent history documentation  for  the  subject  apartment
          from the base date.

          On May 27, 1986, the DHCR sent the attorney for the prior owner a 
          "Final Notice of Pending Default" whereby  the  prior  owner  was
          provided a final 20 days to submit documentation to  substantiate
          the base date for the subject apartment.   The  prior  owner  was
          advised that its failure to  submit  rent  history  documentation

          AK 410402-RO
          would result in the Division's establishment of the  lawful  rent
          in accordance with the default method authorized by  Section  42A
          of the Code which involved using the lowest figure established by 
          any of three methods, one of them  being  the  lowest  stabilized
          rent for the same size apartment in the building.

          In answer to the May  27,  1986  notice,  the  attorney  for  the
          current owner (the petitioner herein) advised, in pertinent part, 
          that it took ownership of the subject  premises  on  October  29,
          1980 and any overcharges should be apportioned accordingly;  that
          it had in its  possession   stabilized  leases  for  the  subject
          premises dating back only to March 1, 1981 (submitted  therewith)
          due to the prior owner's failure to pass on prior leases from the 
          base  date;  that  the  Division's  42A  default  procedure   was
          arbitrary and constituted an unfair  penalty  against  the  owner
          because the Division's action in  agreeing  to  consider  current
          rent rolls, yet choosing the lowest rent in the line, rather than 
          considering the rents for the  entire  line,  lacked  a  rational
          basis; and that the lawful  rent  should  be  determined  as  the
          average of the entire line.  The owner further submitted  a  June
          1986 rent roll for the subject premises.

          In the  order  issued  on  October  2,  1986,  the  Administrator
          determined that the owner had defaulted on its  obligation  under
          Section 42A to submit a complete rent history from the base  date
          and established the tenant's rent as $246.68 based on the default 
          procedure using the lowest stabilized  rent  for  the  same  size
          apartment  in  the  building  (Apt.  4G),  as  indicated  on  the
          Division's apartment  registration  records.   Consequently,  the
          Administrator directed a refund to the  tenant  of  $8,291.19  in
          overcharges including interest on  overcharges  collected  on  or
          after April 1, 1984.

          In this petition, the owner, in pertinent  part,  reasserts  that
          the Administrator should have considered the entire rent roll and 
          taken the average, not the lowest, of the rents  for  the  entire

          On August 24, 1989, the  owner  submitted  a  supplement  to  its
          petition, advising that there are  seven  lines  in  the  subject
          building, A through G; that the "E" line is a mirror image of the 
          "F" line and the "D" line is similar to the "F"  line;  and  that
          the "G" line is not similar to the "F" line and it was  therefore
          inappropriate for  the  Administrator  to  use  apartment  4G  in
          establishing the tenant's rent.  The owner also submitted a  copy
          of the deed showing that it took ownership  of  the  property  on
          October 29, 1980.

          In answer to the petition, the tenant, in pertinent  part,  urges
          affirmation of the order.

          The Commissioner is of the opinion that this petition  should  be
          granted in part.

          Section 42A of the Rent Stabilization Code requires that an owner 
          retain complete rent records for  each  stabilized  apartment  in
          effect from June 30, 1974 to date and produce them  to  the  DHCR
          upon demand.  If the apartment was  decontrolled  form  the  Rent
          Control  Law  after  June  30,  1974  the  owner   must   provide

          AK 410402-RO
          satisfactory documentary evidence of the date of decontrol.

          DHCR has adopted a procedure for determining  an  apartment  rent
          where an owner does not provide a complete rent  history  of  the
          apartment.  In such cases the rent is calculated to be the lowest 
          of the following amounts: 1) the lowest  stabilized  rent  for  a
          same size apartment in the  building;  2)  the  current  tenant's
          initial rent minus a guideline  and  vacancy  allowance;  3)  the
          prior tenant's last rent, if known.  While  method  number  1  as
          adopted by the CAB in 1982 was originally  based  on  the  lowest
          rent in the line, that method has since been modified and is  now
          based on the lowest  rent  for  a  same  size  apartment  in  the
          building.  (Accord: Administrative Review Docket Number BK 410153 

          A review of the record in the instant  case  discloses  that  the
          Administrator properly implemented the  default  procedure  as  a
          result of the owner's failure to provide a complete rent history. 
          The Administrator properly established  the  rent  based  on  the
          lowest rent for a same size apartment in  the  building.   It  is
          noted that the May 27, 1986 default notice to which  the  owner's
          attorney responded indicated that the lowest rent of a same  size
          apartment in the  building  would  be  utilized  in  the  default

          Although the owner claims that the "G" line  apartments  are  not
          similar to the "F" line apartments at the premises, the owner has 
          submitted no evidence in support  of  this  claim.   The  owner's
          claim is contradicted by the  Division's  apartment  registration
          records, upon which  the  Administrator  properly  relied,  which
          indicate that the "G" and "F" lines are both  three  room  units.
          In view of the owner's failure to refute the information  in  the
          Division's records, the Commissioner finds that the Administrator 
          properly utilized the lowest rent figure from apartment 4G.

          Section 2526.1 of the current 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 owner.

          The deed that was provided by the current owner indicates that it 
          took title to the premises on  October  29,  1980.   Pursuant  to
          Section 2526.1(f) of the Code, the former owner  is  individually
          responsible for overcharges collected from June  15,  1979  until
          October 28, 1980, or $1291.49; and the  current  owner-petitioner
          is  individually  responsible  for  overcharges  collected   from
          October 29, 1980 until August 30, 1986, or  $6,999.70  (inclusive
          of interest and excess security).  The  Commissioner  notes  that
          there is no evidence of collusion or any relationship between the 
          present owner and any prior owners.

          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, this order may be filed and  enforced  in
          the  same  manner  as  a  judgment  or,  as  to  the  overcharges
          attributable to the  current  owner,  not  in  excess  of  twenty
          percent  thereof  per  month  may  be  offset  against  any  rent
          thereafter due the owner.

          AK 410402-RO

          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, granted in part, and, the order of  the  Rent
          Administrator be, and the same hereby is, modified in  accordance
          with this order and opinion.


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner



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