DOCKET NUMBER: AK 410560-RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: AK 410560-RO
DRO DOCKET NO.: TC 82036-G
GREENJAY REALTY CO.,
ORDER AND OPINION REMANDING PROCEEDING ON APPEAL
On November 3, 1986, the above-named petitioner filed a Petition for
Administrative Review against an order issued on September 30, 1986 by the
Rent Administrator, 10 Columbus Circle, New York, New York, concerning the
housing accommodation known as 117 Bank Street, Apartment D, New York,
New York, wherein the Administrator directed the owner to refund $7,617.03
in overcharges including interest after April 1, 1984.
The Commissioner notes that the District Rent Office Docket Number
reflected in the Administrator's order ("TC-82036-R") is incorrect, and
should have been reflected as TC-82036-G.
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 issue in this appeal is whether the Administrator's order was
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the record concerning the issues
raised in the administrative appeal.
This proceeding was commenced on January 9, 1984 by the tenant (Eric
Palmer) filing a complaint of rent overcharge with the former New York
City Conciliation and Appeals Board. The tenant commenced occupancy on
September 1, 1982 without a written lease at an initial rental of $425.00.
On August 8, 1984, the owner was sent a copy of the tenant's complaint
with instructions to file an answer within 20 days, and to submit leases
from the base date as well as to complete a rent history chart.
On September 4, 1984, the owner responded that, based on information and
belief, the complainant's predecessor, whose monthly rent was $197.50, was
subject to rent control, and that the complainant is the first stabilized
tenant. In support, the owner submitted two orders of the City Rent
DOCKET NUMBER: AK 410560-RO
Office dated August, 1962 and February, 1971 establishing, as to a prior
tenant (Lowenstein) said to have been succeeded by the
complainants'ecessor, that the apartment was exempt from the rent control
law pursuant to Section 13 of the Regulations and was decontrolled during
the occupancy of such tenant. The owner further stated that due to the
death of the owner corporation's former principal, it is unknown what
steps were taken to provide the complainant with an opportunity for a Fair
Market Rent Appeal.
On July 10, 1986, the Division sent the owner a "Final Notice of Pending
Default" advising that since the rental history for the subject apartment
had not been received, the lawful rent would be established according to
the default method authorized by Section 42A of the Code.
On July 29, 1986, the owner responded by submitting a rent ledger for the
period July, 1982 to November, 1982 which, the owner claimed, covered two
months prior to, as well as two months after, the base rent date of
September 1, 1982. The owner also submitted, among other things, a copy
of the tenant's renewal lease for the period October 1, 1984 to September
30, 1986 which provided for a monthly rent of $463.25.
In the order issued on September 30, 1986, the Administrator determined
that the owner had failed to provide a complete rental history for the
subject accommodation, and therefore established the legal regulated rent
as $263.90 based on the default procedures. The Administrator determined
that a $161.10 per month overcharge occurred during the tenant's vacancy
lease period and that a $137.35 per month overcharge occurred during the
renewal period commencing October 1, 1984.
In the petition, the owner argues in, pertinent part, that it had
previously provided a complete rent history, inclusive of the rent ledger
which covered the period two months to prior and two months after the base
rent date, and resubmits all aforementioned documentation.
The tenant did not submit on answer to the petition.
The Commissioner is of the opinion that this proceeding must be remanded
to the Rent Administrator to be processed as an application challenging
the Initial Legal Regulated Rent ("fair market rent appeal").
Section 25 of the former Rent Stabilization Code provides in pertinent
part that an application to adjust the Initial Legal Regulated Rent on the
ground that it exceeds the Fair Market Rent, of a dwelling subject to rent
control on June 30, 1974 and vacated thereafter, may be made by the first
tenant in occupancy after such first vacancy. Such application must be
made within 90 days after receiving the appropriate notice (Notice Form
DC-2) by certified mail from the owner informing the tenant of the
Initial Legal Regulated Rent and of the right to appeal it. The right to
make this "fair market rent appeal" is limited to the first tenant to
receive the DC-2 notice form by certified mail.
In the instant case, the evidence in the record indicates that the
complaining tenant was the first rent stabilized tenant. As such, the
tenant was entitled to receive the DC-2 notice form. Since the owner has
not submitted any evidence that the tenant was properly notified of his
right to appeal his initial rent, and since a fair market rent appeal is
the only appropriate application for an initial stabilized tenant to make
regarding the initial rent, this complaint of overcharge should be
processed as an application for adjustment of the Initial Legal Regulated
DOCKET NUMBER: AK 410560-RO
Rent. The owner should be given the opportunity to make a submission
justifying the initial rent. Such submission may include proof, if any,
that the tenant was properly served a DC-2 notice form and did not file
his overcharge complaint, or any other fair market rent appeal, within 90
days of receipt thereof. The tenant should be given an opportunity to
respond, and a new order should then be issued.
If the owner has already complied with the Administrator's order and there
are arrears due to the owner as a result of the instant determination, the
tenant shall be permitted to pay off the arrears in twelve equal monthly
installments. Should the tenant vacate after the issuance of this order,
or have already vacated, said arrears shall be payable immediately.
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 remanding this proceeding to the Rent Administrator for further
processing in accordance with this order and opinion.