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

      APPEAL OF                              DOCKET NO. AL410276RO           

                                          :  DISTRICT RENT OFFICE
           Time Equities, Inc.,              DOCKET NOS. L3115951R 
                                             TENANT: Steven Rush              
                            PETITIONER    : 

                                     IN PART

      On December 5, 1986, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on November 14, 1986, 
      by the District Rent Administrator, 10 Columbus Circle, New York, 
      New York, concerning the housing accommodations known as 194 Riverside 
      Drive, New York, New York, Apartment No. 4A, wherein the District Rent 
      Administrator determined that the owner had overcharged the tenant.  

      The Commissioner notes that this proceeding was filed 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 herein is whether the Rent Administrator's order was 

      The applicable section of the Law is 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 30, 1984, by the tenant's filing 
      of a rent overcharge complaint.

      In answer to the tenant's complaint, the owner submitted a complete 
      rental history for the subject apartment and informed the Division of 
      Housing and Community Renewal (DHCR) that it assumed management of the 
      subject premises on March 8, 1983.
      In Order Number CDR26,761 issued November 14, 1986, the District Rent 
      Administrator determined that the owner had overcharged the tenant from 


      January 1, 1979, through December 31, 1985, and directed the owner to 
      refund to the tenant $2104.54.

      In this petition, the owner contends in substance that the District Rent 
      Administrator's order is incorrect and should be modified because the 
      Administrator incorrectly assessed overcharges against the owner for the 
      period from January 1, 1979 through December 31, 1985 when the owner 
      didn't assume management of the subject premises until March 8, 1983 and 
      the complaining tenant purchased the subject apartment as a cooperative 
      on August 20, 1985.  In support of these contentions, the owner submits 
      copies of the first and last pages of the net lease dated March 8, 1983 
      under which the managing agent herein assumed management of the subject 
      premises for a twelve year period from the owner 920 East 174th Street, 
      Inc. c/o Francesco Chibbaro and the cooperative closing statement dated 
      August 20, 1985.

      The tenant did not submit a response to this petition.

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

      Section 2526.1(f) 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.

      In view of the difficulties encountered by tenants in locating owners to 
      whom rent payments are no longer made and in obtaining rent overcharges 
      paid to such owners and in view of the change in policy to hold current 
      owners liable for all overcharges collected on or after April 1, 1984; 
      the policy for rent overcharges collected prior to April 1, 1984 of 
      limiting the obligation of a new owner to refund only overcharges 
      actually collected by it must be strictly construed and applied only if 
      an actual change of ownership of the premises (transfer of title) has 
      occurred.  Otherwise the owner currently collecting the rent is 
      responsible for refunding all rent overcharges.

      In the instant case the evidence of record discloses no change of 
      ownership during the period of the rent overcharge (from January 1, 1979 
      through August 20, 1985).   Accordingly, the Rent Administrator properly 
      directed the owner herein to make the entire refund.  However, the 
      record also reveals that the tenant purchased the subject apartment as 
      a cooperative on August 20, 1985.  Accordingly, the owner is only 
      responsible for overcharges from January 1, 1979 through August 20, 1985 
      and not December 31, 1985 as determined by the Rent Administrator.  
      Therefore the total overcharge including interest through August 20, 
      1985 in $1,958.53.

      This order is issued without prejudice to whatever rights, if any, Time 
      Equities, Inc. has against the fee owner for the recovery of that 
      portion of the overcharge refunded by Time Equities, Inc, to the tenant 
      which was actually collected by the fee owner.

      This order may upon the expiration of the period in which Time Equities, 
      Inc. may institute a proceeding pursuant to Article 78 of the Civil 
      Practice Law and Rules, be filed and enforced in the same manner as a 


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

      ORDERED, that this petition be, and the same hereby is, granted in part, 
      and the District Rent Administrator's order be, and the same hereby is, 
      modified to show that the owner herein is responsible for refunding a 
      total overcharge of $1,958.53 - the amount of overcharge occurring from 
      January 1, 1979 through August 20, 1985.  In all other respects, the 
      Administrator's order is affirmed.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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