ADM. REVIEW DOCKET NO.: AK 610001 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  S.J.R. 5839 
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO.:               
                                                 AK 610001 RO 
                                              :
                                                 DRO DOCKET NOS.:           
                                                 B-3101397-R
                                                 CDR 25,476                 
                  VALROSE REALTY COMPANY,
                                                 Tenant: Victor Morales     
                                          
                                                  

                              PETITIONER      : 
          ------------------------------------X                             

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW


               On November 4,  1986,  the  above  named  petitioner-current
          owner filed a Petition for Administrative Review against an order 
          issued on October 30, 1986, by the District  Rent  Administrator,
          10 Columbus  Circle,  New  York,  New  York,  concerning  housing
          accommodations known as Apartment 6P, 5425 Valles Avenue,  Bronx,
          New York, wherein the District Rent Administrator determined that 
          the current and prior owners had overcharged the tenant.

               On May 8, 1991, the Commissioner denied the current  owner's
          petition for  administrative  review.   Subsequent  thereto,  the
          current owner filed a petition in  the  New  York  State  Supreme
          Court, Bronx County, pursuant to Article 78 of the Civil Practice 
          Law and Rules  seeking  to  reverse,  annul  and  set  aside  the
          Commissioner's order of May 8, 1991. 

               On October 15, 1991  the  proceeding  was  remitted  to  the
          Division for a  redetermination  of  the  merits  pursuant  to  a
          Stipulation to Remit. 

               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  District  Rent
          Administrator's order was warranted.







          ADM. REVIEW DOCKET NO.: AK 610001 RO
               The applicable sections of the law are Section  10B  of  the
          former Rent Stabilization Code and Section 2526.1 of the  current
          Rent Stabilization Code. 

               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 commenced  on  March  18,  1984  by  the
          tenant's filing of a rent overcharge complaint with the New  York
          City Conciliation and Appeals Board (CAB),  the  agency  formerly
          charged with enforcing the Rent Stabilization Law.

               On September 13, 1984, Caultin Management  Corporation  (the
          prior owner's managing  agent  and  the  current  owner's  former
          managing agent) was served with a copy of the complaint  and  was
          requested to submit rent records to prove the lawfulness  of  the
          rent being charged.

               On January 23, 1986, Caultin  Management  Corp.  was  served
          with a Notice of Pending Default demanding a full rental  history
          for the subject apartment  from  the  base  rent  date.   Caultin
          Management Corp. did not respond to this notice.   

               On July  11,  1986  under  Docket  Number  B-3101397-R,  the
          District Rent Administrator determined  that  Caultin  Management
          Corporation had failed to provide a complete rental  history  for
          the subject apartment, and  accordingly  established  the  lawful
          stabilization rent as $261.26 (the complaining  tenant's  initial
          rent minus a guidelines increase of  11%),  determined  that  the
          tenant had been overcharged since June  15,  1975,  and  directed
          Caultin Management Corporation to refund to the  tenant  $3190.03
          which included excess security and interest on  that  portion  of
          the overcharge occurring on or after April 1, 1984.   

               On July 21, 1986 the Administrator reconsidered  the  record
          and decided to revoke his order of July 11, 1986.




               On  July  21,  1986,  Arnold  S.  Warwick  &  Co.,  Ltd.  (a
          subsequent managing agent of the current owner) was served with a 
          copy of the tenant's complaint and was requested to  submit  rent
          records to prove the lawfulness of the rent being charged. 

               On August 11, 1986, Arnold S. Warwick & Co., Ltd. was served 
          with a Final Notice of Pending Default demanding complete  copies
          of all leases from the base rent date to the date  on  which  the
          complaining  tenant  took   occupancy,   and   documentation   to
          substantiate the base rent date if the base rent date  was  after
          April 30, 1974.

               On August 25, 1986, the current owner, through its attorney, 
          informed the Division of Housing  and  Community  Renewal  (DHCR)
          that Valrose Realty Company  acquired  the  subject  building  on
          January 1, 1983, that complete lease histories were never 
          provided to the current owner,  that  the  December  1972/January
          1973 rent  for  the  subject  apartment  was  $275.00,  that  the






          ADM. REVIEW DOCKET NO.: AK 610001 RO
          December 1973 rent was projected to be the same amount, but  that
          the rent was projected to  increase  to  $303.88  for  the  years
          ending  in  December  1974  and  December  1975,  and  that   the
          complaining tenant's initial rent of $290.00 was  less  than  the
          projected 1975 rent of $303.88.  In support of these contentions, 
          the current owner submitted  a  rent  schedule  for  the  subject
          building listing the actual rents charged in  December  1972  and
          the projected rents for the end of the years 1973, 1974 and 1975; 
          a  current  rent  roll  for  the  subject  building  and  a  rent
          calculation chart for apartment S1-B.     

               In Order CDR 25,476 issued October 30,  1986,  the  District
          Rent Administrator determined that the current and  prior  owners
          had failed to provide a complete rental history for  the  subject
          apartment, and accordingly established the  lawful  stabilization
          rent as $261.26 (the complaining tenant's initial  rent  minus  a
          guidelines increase of 11%), determined that the tenant had  been
          overcharged since June 15, 1975,  directed  the  prior  owner  to
          refund to the tenant the overcharges collected from June 15, 1975 
          through December 31, 1982, and  directed  the  current  owner  to
          refund to the tenant the overcharges collected since  January  1,
          1983. 

               In this petition, the current owner  contends  in  substance
          that the District Rent Administrator's  order  is  incorrect  and
          should be revoked because the owner did not obtain complete  rent
          records when it acquired the subject property in January of 1983. 





          The owner's attorney has  since  obtained  rent  rolls  for  some
          periods prior to January of 1983 which indicate that the  January
          1, 1973 rent was $275.00 with the rents as of December  1974  and
          December 1975  projected  at  $303.88,  and  that  no  overcharge
          occurred.

               In response, the  tenant  contends  in  substance  that  the
          owner's petition should be denied because the owner  has  yet  to
          provide a complete rental history for the subject apartment. 

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

               A review of the record in the instant  case  indicates  that
          the current owner did supply to the Rent Administrator sufficient 
          data in the form of leases, rent ledgers and a rent schedule,  to
          construct a complete rental history  for  the  subject  apartment
          from the base  rent  date.   Accordingly,  the  Commissioner  has
          recomputed  the  lawful  stabilization  rents  and   amounts   of
          overcharge on the amended rent calculation chart attached  hereto
          and made a part hereof.  As shown on the chart, the tenant was 
          overcharged a total of $74.16 for the period from  July  1,  1978
          through  June  30,  1979  by  a  prior   owner,   Harder   Realty
          Corporation.   The  Commissioner  notes  that  the  Administrator
          incorrectly listed Caultin Management Corporation  as  being  the
          managing agent of the prior owner, Harder Realty Corporation.  As 
          shown on the amended  rent  calculation  chart,  neither  Caultin






          ADM. REVIEW DOCKET NO.: AK 610001 RO
          Management Corporation nor  the  current  owner,  Valrose  Realty
          Company, have overcharged the tenant.

               The Commissioner further notes that the prior owner,  Harder
          Realty  Corporation,  was  not  named  by  the  tenant  in   this
          proceeding and has not  been  served  to  date.   This  order  is
          therefore issued without prejudice to the tenant's right, if any, 
          to proceed against Harder Realty Corporation. 

               If  the  owner  has   already   complied   with   the   Rent
          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  twenty-four  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, and that the District Rent Administrator's order be, and 
          the same hereby is, modified in accordance with  this  order  and
          opinion.

          The lawful stabilization rents  and  amounts  of  overcharge  are
          established on the attached chart which is fully made a  part  of
          this order. 

          ISSUED:





                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner




                                                    

    

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