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

          APPEAL OF                               DOCKET NO. AK 510570-RO
                                                  DRO DOC NO. U-3124287-R
               A D I MANAGEMENT INC., -OWNER  :   ORDER NO. CDR 26,795
                                  PETITIONER  :   NEIL SALZMAN-TENANT 

                                  ORDER AND OPINION

          On November 26, 1986, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          November 20, 1986 by the Rent Administrator, 10 Columbus Circle, 
          New York, New York concerning the housing accommodation known as 
          apartment 7, 180 Pinehurst Avenue, New York, New York wherein the 
          Administrator established the legal stabilization rent and directed 
          the refund of overcharges of $1,746.12 inclusive of excess security 
          and interest on the overcharge collected on or after April 1, 1984.

          The Commissioner notes that this proceeding was commenced 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 evidence relevant to 
          the issues raised in the administrative appeal.

          The tenant (Neil Salzman) initiated this proceeding on March 31, 
          1984 by filing a rent overcharge complaint with the former New York 
          City Conciliation and Appeals Board (CAB).  The tenant stated that 
          he had taken occupancy of the subject apartment pursuant to a three 
          year lease commencing April 15, 1975.

          DOC. NO. AK 510570-RO

          A copy of the complaint along with a request for a rent history of 
          the subject apartment from its base date was served on the owner.
          DOC. NO. AK 510570-RO

          In response, the owner, stating that the subject apartment was 
          decontrolled on February 25, 1975, submitted a rent history and 
          copies of leases in effect beginning with April 15, 1975, the 
          tenant's first lease.  The owner also submitted a copy of a letter 
          to the tenant in which the owner indicated that the decontrolled 
          status of the apartment was established under Docket No. 2C22488.

          In response to a Division request for records to establish the base 
          date, the owner stated that it was unable to produce the requested 
          records because the mortgagee was in possession of the subject 
          property and did not make the documents available when the building 
          was sold.

          Due to the owner's failure to submit a complete rental history, the 
          Administrator applied Section 42A default procedures to establish 
          the legal stabilization rent at $347.88 as of April 1, 1983 through 
          March 31, 1986 and directed the owner to refund an overcharge 
          amounting to $1,746.12 inclusive of excess security and interest.

          In its appeal, the owner requests that the Administrator's order be 
          reversed.  The owner contends that the Division was irresponsible 
          in not reviewing its own records.  Had the Division reviewed its 
          records, to wit Docket #2C22488, it would have found pertinent 
          information relating to the subject apartment's decontrol status 
          and would not have found an overcharge.  The owner stated it had 
          been unable to get the necessary records because the decontrol 
          order had been filed by the mortgagee in possession who had not 
          transferred the documentation to the subsequent purchaser.

          After careful consideration, the Commissioner is of the opinion 
          that this proceeding should be remanded for further processing.

          The Emergency Tenant Protection Act gave certain tenants of 
          decontrolled apartments the right to challenge their initial rents.  
          A tenant whose apartment was subject to rent control and became 
          subject to the Rent Stabilization Law as a result of a vacancy 
          occurring after June 30, 1974 has the right to file this challenge 
          known as a Fair Market Rent Appeal.  Such appeal must be filed by 
          an eligible tenant (usually the first stabilized tenant) within 90 
          days of receipt of the notice of initial legal regulated rent (DC-2 

          In the instant case, the owner alleges that information regarding 

          DOC. NO. AK 510570-RO

          the decontrol of the subject apartment is in the Division's records 
          and would show there was no overcharge.  A search of the Division's 
          records reveals that the current tenant filed a complaint under 
          Docket No. 2C 22488 in January 1976 in which he asserted he was the 
          first stabilized tenant but had not been given the notices to 
          enable him to challenge the initial leagal regulated rent.

          There is no evidence in the record to indicate that the tenant had 
          the opportunity to file a challenge to the initial rent.  
          Accordingly, the Commissioner finds that the tenant's overcharge 
          complaint should be regarded as a Fair Market Rent Appeal.

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

          ORDERED, that this petition be, and the same hereby is, remanded 
          for further processing in accordance with this order and opinion.

          The automatic stay of so much of the Rent Administrator's order as 
          directed a refund is hereby continued until a new order is issued 
          upon remand.  However, the Administrator's determination as to the 
          rent is not stayed and shall remain in effect, except for any 
          adjustment pursuant to lease renewals, until the Administrator 
          issues a new Order upon remand.

                                             ELLIOT SANDER
                                             Deputy Commissioner


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