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

          ------------------------------------X  SJR 4441
          APPEAL OF                              DOCKET NO.: AK 810661 RO  
                                              :  RENT ADMINISTRATOR'S 
             RONDAX DEVELOPMENT CORP.            DOCKET  NOS.  WWP-86-S-13/R
                                              :                WWP-86-S-14/R
                             PETITIONER                                    :

               On November 3,  1986  the  above  named  petitioner  filed  a
          Petition  for  Administrative  Review  against  orders  issued  on
          October 7, 1986 by the Rent Administrator of the Westchester  Rent
          Office concerning the housing accommodations  known  as  110  Park
          Avenue, White Plains, New York, various accommodations wherein the 
          Administrator determined that the subject building  contains  more
          than  six  dwellings  and  is  subject  to  the  Emergency  Tenant
          Protection Act. 

               On August 9, 1989,  the  Commissioner  issued  an  order  and
          opinion  denying  the   owner's   petition   and   affirming   the
          Administrator's determination that the building is subject to  the
          Emergency Tenant Protection Act.   

               Subsequent thereto, the owner sought judicial review  of  the
          Commissioner's order pursuant o Article 78 of the  Civil  Practice
          Law and Rules (CPLR).  On December 5, 1990, the case was  remanded
          by the Supreme Court, Westchester County, for  reconsideration  of
          the jurisdictional issue and of the  determination  of  the  legal
          regulated rent.

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

               The record reveals that this proceeding was commenced in 1986 
          when three tenants on the third  floor  of  the  subject  building
          filed overcharge complaints in which they questioned the rent they 
          are being charged and whether the rooms they occupy are subject to 
          regulation.  Two of the complainants stated  that  they  pay  $325
          every four weeks and the third said he pays $300 every four weeks. 
          They took occupancy February, April, and May  1985,  respectively,
          and none has a lease.  They all stated that the units they  occupy
          were formerly one apartment renting for $650 per  month  that  was
          divided into four rooms, rented separately, and sharing a  kitchen
          and bathroom.  The tenants enclosed with their complaints a copy 

          of a letter from the White Plains Department of Buildings  to  the
          owner stating that the cellar  and  third  floor  of  the  subject

          ADM. REVIEW DOCKET NO. AK 810661 RO
          building are being used as illegal dwelling  units  and  that  six
          rooming units on the first floor  have  been  increased  to  eight

               Another letter  from  the  Department  of  Buildings  to  the
          Administrator, dated March 13,  1986,  states  that  the  building
          originally was permitted to have 4 units, that two more were added 
          to the third floor on August 18, 1981, and that another  apartment
          was established in the basement on May 19, 1984.

               The record also contains a decision by the City Court of  the
          City of White Plains,  dated  April  1,  1986,  in  which  it  was
          determined that  the  subject  owner  had  increased  six  legally
          conforming units on the first floor of  the  subject  premises  to
          eight units in violation of the Building Code  and  Rooming  House
          Licensing Ordinance and that one apartment on the third floor  had
          been converted to separate rooming house units, also in  violation
          of the Rooming House Licensing Ordinance.  

               In answer to the complaints,  the  owner  asserted  that  the
          Emergency  Tenant  Protection  Act  (ETPA)  specifically  excludes
          rooming house units from coverage and that  the  subject  building
          contains only four dwelling units.   The  owner  stated  that  the
          complaining tenants are roomers who occupy one apartment on a four 
          week to four week basis with no written lease.  The owner provided 
          evidence  of  the  rent  paid   by   each   complaining   tenant's

               On August 11, 1986, the owner advised  the  Administrator  in
          response to a request for additional information that  there  were
          no tenants presently in occupancy and that all four apartments  in
          the building are vacant.

               A letter from the White Plains Department of Buildings  dated
          August 21, 1986 stated that an inspection on  that  date  revealed
          that all four apartments on the second and third  floor  had  been
          vacated and that the only occupied rooms were six single furnished 
          units on the first floor.

               On September 3, 1986, the owner  notified  the  Administrator
          that it did not consider the occupants of the first floor  tenants
          because the first floor is a legal rooming house.

               In the order issued on October  7,  1986,  the  Administrator
          determined that since the owner had failed  to  substantiate  that
          the tenants on the first floor are transient guests, the  building
          contains more than six  dwelling  units  and  is  subject  to  the
          Emergency Tenant Protection Act.  The order established  the  rent
          at $650 per month ($600 per  four  week  period)  for  the  entire
          apartment and directed the owner to refund to  the  tenants  their
          proportionate share of overpayment of rent.

               In the petition for administrative review, the  owner  argued
          that the Administrator's  order  was  arbitrary,  capricious,  and
          against the weight of the evidence which shows  that  the  subject
          building contains four apartments (2 each on the second and  third
          floors) and a first floor that is zoned, legally  occupiable,  and

          ADM. REVIEW DOCKET NO. AK 810661 RO
          used exclusively as a rooming house.  According to the owner, this 
          evidence establishes that the premises  are  not  subject  to  the
          Emergency Tenant Protection Act.  The  owner  also  asserted  that
          there was no basis for establishing the rent at $650.00 per month. 

               In an answer to the petition filed by  an  attorney  for  the
          tenants, it is argued that the subject building has more than  six
          units as determined by the White Plains City Court.

               In the decision issued on August 9,  1989,  the  Commissioner
          denied the owner's petition, based on a finding that  the  portion
          of the premises occupied by the complaining tenants is not  exempt
          from regulation as a tourist home serving transient  guests  since
          these tenants had been residing there for a year before filing the 
          complaints and therefore could not be considered  transient.   The
          Commissioner also found no reason to reexamine the Administrator's 
          determination of the initial rent.  

               Pursuant to the remand ordered by the Court, the Commissioner 
          has reconsidered the evidence of record and is of the opinion that 
          the petition should again be denied. 

               Section 8625 a (4) (a) of the Emergency Tenant Protection Act 
          provides an exception to stabilization for housing  accommodations
          in a building containing fewer than six dwelling units.  In  order
          for a building to have six dwelling units, it need  not  have  six
          apartments subject to stabilization.  Schacht v. City of New  York
          Housing and Development Administration,  63  Misc.  2d  1003,  314
          N.Y.S.2d 104 (1970).  The building must simply have  six  or  more
          "units" to be subject to the jurisdiction of the act which extends 
          to "all or any class or classes of  housing  accommodations  in  a
          municipality,  except  ..."  for  those  categories   specifically
          excluded from regulation.   

          It is clear from the facts and from  the  decision  of  the  White
          Plains City Court  that  the  subject  building  consists  of  one
          apartment in the basement, eight rooming units on the first floor, 
          two apartments on the second floor, one  apartment  on  the  third
          floor, and three rooming units on the third floor.  The number  of
          units exceeds six, bringing the building within  the  jurisdiction
          of stabilization, regardless of the fact that some  of  the  units
          may be exempt.  

               Section 8625 a(8)  does  exempt  "any  tourist  home  serving
          transient guests  exclusively,  or  any  part  thereof".   In  the
          subject building, since only the first  floor  units  are  legally
          classified as rooming units to be used for transient purposes, the 
          accommodations occupied by the complaining tenants  on  the  third
          floor were properly determined to be subject to stabilization. 

               As for the determination that the lawful  rent  is  $650  per
          month, the Commissioner finds no basis for modifying this  portion
          of the Administrator's order.  The  owner  submitted  no  evidence
          pertaining to the rental history of the units that the complaining 
          tenants occupy and  which  they  claim  formerly  constituted  one
          apartment.   In  the  absence  of  any  contrary   evidence,   the
          Administrator properly established the  rent  using  the  tenants'
          assertion that before being divided up, the apartment rented for 

          ADM. REVIEW DOCKET NO. AK 810661 RO
          $650 per month.  The rent receipts submitted by the owner  purport
          to establish the rent  paid  by  the  predecessors  of  the  three
          complaining  tenants  but  the  receipts  contain  no   indication
          specifying which unit the payments were for and since the building 
          concededly contains other rooming house units,  the  receipts  are
          not competent evidence of the  rent for  the  third  floor  rooms.
          Moreover, the rent paid by the prior roomers, even if  proven,  is
          not determinative of the lawful rent for  the  complainants.   The
          lawful rent would be the rent charged  and  paid  when  the  units
          first became  subject  to  stabilization,  plus  lawful  increases
          thereafter.  The owner has repeatedly declined to submit  evidence
          regarding the prior rental history.

               The Division has developed procedures  to  be  used  when  an
          owner defaults in its obligation  to  provide  a  complete  rental
          history.  Those procedures involve selecting  the  lowest  of  the
          following three possible rents: (1) the lowest rent for  the  same
          size apartment in the building (2) the complaining  tenant's  rent
          minus a guideline, (3) the last rent paid  by  the  prior  tenant.
          The  Commissioner  finds,  however,  that  given  the   particular
          circumstances in this case, the  use  of  the  default  method  is
          inappropriate.  Since the owner has  not  registered  any  of  the
          apartments in the building, the lowest  rent  for  the  same  size
          apartment cannot be determined.  It also appears from the evidence 
          in the record that there may not be another unit in  the  building
          of the same  size.   The  other  two  factors  -  the  complaining
          tenant's unit minus a guideline or the lowest  rent  paid  by  the
          prior roomers - would allow the owner to benefit from the  illegal
          conversion of the former apartment to four separate rooms.    

               If the owner had submitted a complete rental history for  the
          apartment from the base date, pursuant to the  requirement  to  do
          so, the lawful stabilized rent would be determined based  on  that
          rental history.  It would  be  contrary  to  the  purpose  of  the
          Emergency  Tenant  Protection  Act  of  protecting  tenants   from
          speculative, unwarranted and abnormal increases in rents to  allow
          the owner herein to benefit from its failure to meet its statutory 
          obligation to  maintain  and  produce  on  request  relevant  rent
          records.  Therefore, in the absence of any contradictory  evidence
          from the owner, the Commissioner deems it appropriate to  rely  on
          the assertion by the  three  complaining  tenants  that  the  rent
          charged and paid by the former tenant of the  apartment  was  $650
          per month.  The Administrator's determination that the Legal 

          Regulated Rent is established at $650.00 per month (or $600.00 per 
          four week period) is affirmed.  No increases above this amount are 
          permitted until the owner properly registers the units as required 
          by Part 2509 of the Tenant Protection Regulations.  

               The directive to the owner to refund  to  the  tenants  their
          proportionate share of any overpayment of rent is also affirmed.

               THEREFORE, in accordance with the Emergency Tenant Protection 
          Act of 1974 and the Tenant Protection Regulations, it is

               ORDERED, that this petition be and the same hereby is  denied

          ADM. REVIEW DOCKET NO. AK 810661 RO
          and the Administrator's order be and the same hereby  is  affirmed
          as modified in accordance with this order and opinion. 


                                          ELLIOT SANDER
                                          Deputy Commissioner

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