ARL08393L
                                  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. NO.:,1360
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW     
          APPEAL OF                               DOCKET NO.: ARL08393L

                    TIME EQUITIES, INC.,
                                                   DRO DOCKET NO.: L3116922T
                                                                   75371G
                                   PETITIONER                      CDR 12946
           ----------------------------------X     TENANT:  DOMINICK SCOTTO      


             ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
                                          AND
                     MODIFYING DISTRICT RENT ADMINISTRATOR'S ORDER


           On February 26, 1986, the above-named petitioner-owner filed a 
           Petition for Administrative Review against an order issued on 
           February 5, 1986 by the District Rent Administrator, 10 Columbus 
           Circle, New York, New York concerning the housing accommodations 
           known as 221 West 82nd Street, New York, New York, Apartment 15-B 
           wherein the District Rent Administrator determined the fair market 
           rent for the subject apartment.

           Subsequent thereto, the petitioner-owner filed a petition in the 
           Supreme Court pursuant to Article 78 of the Civil Practice Law and 
           Rules requesting that the "deemed denial" of the petitioner's 
           administrative appeal be annulled.  The proceeding was then 
           remitted to the Division for consideration of the petitioner's 
           administrative appeal.

           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.
           The applicable sections of the Law are Section 26-513 of the Rent 
           Stabilization Law and Sections 2521.1(d) and 2522.3 of the current 












          ARL08393L

           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 
           issues raised by the administrative appeal.

           This proceeding was originally commenced by the filing in March 
           1984 of a Fair Market Rent Adjustment Application by the tenant.  
           Such application listed the owner as 82nd Broadway Management 
           Company.  The tenant stated that he took occupancy of the subject 
           apartment pursuant to a lease which commenced on February 1, 1983 
           at a rental of $900.00 per month.

           Subsequently on Novmeber 9, 1984, Time Equitites, Inc. submitted a 
           response indicating that it "took possession" of the subject 
           premises on July 1, 1984.

           Both 82nd Broadway Management Co. and Time Equities, Inc. were 
           afforded an opportunity to submit June 30, 1974 rental data for 
           comparable apartments or to submit post June 30, 1974 comparability 
           data.

           The owners did not submit the required data.

           In Order Number CDR12946, the District Rent Administrator 
           determined the initial legal regulated rent by establishing a fair 
           market rent of $529.69 affective February 1, 1983, the date of 
           commencement of the initial lease of the tenant herein, directed 
           that all renewal rents be computed above this initial rent and 
           further directed the owner to refund total excess rent of 
           $14,276.79 covering the period from February 1, 1983 through 
           January 31, 1986.  The Administrator determined the fair market 
           rent solely on the basis of the special fair market rent guidelines 
           order since the owner did not supply rental data that could be used 
           in a comparability study.  The Administrator in his order listed 
           the owner as 82nd Broadway Management Co. and listed the management 
           agent as Time Equities, Inc..

           In this petition Time Equities, Inc. alleges in substance that 
           through a written instrument dated August 27, 1984, Time Equities, 
           Inc. assumed the burdens and benefits of a net leasee including the 
           right to collect rents and the obligation to bear all costs 
           commencing July 1, 1984 and thereafter, while the owner 82nd 
           Management Co. remains responsible for obligations arising prior to 
           July 1, 1984.  Therefore, Time Equities, Inc. urges that the 
           District Rent Administrator's order should be modified to 
           specifically apportion the obligation for refund of excess rent 
           between 82nd Broadway Management Co. and Time Equities, Inc. and 
           that Time Equities, Inc. should only have to refund that portion of 
           the excess rent actually collected by it.

           In answer to this petition, the tenant contends in substance that 






          ARL08393L

           Time Equities, Inc. as the managing agent for 82nd Broadway 
           Management Co. is responsible for refunding the entire excess rent 
           amount found against the owner.

           In reply to the tenant's answer, Time Equities, Inc. stated in 
           substance that as net lessee of the subject premises it had no 
           proprietary interest in the subject premises prior to July 1, 1984, 
           that since July 1, 1984 when it started to collect rents it should 
           be considered as an "owner" of the subject premises pursuant to 
           Section 2(h) of the former Rent Stabilization Code and that as the 
           new owner, it should not be responsible for excess rent collected 
           by the prior owner. In support of its contentions, Time Equities, 
           Inc. cited CAB Opinion Number 6629, T/A 9909 issued on March 22, 
           1984 regarding the building 35 West 90th Street wherein Time 
           Equities, Inc. was listed as an owner-net lessee and was held 
           responsible for excess rent paid by the tenant of apartment 5J in 
           such building commencing with the first rental collected as of 
           November 1, 1982.

           On March 18, 1988 a Notice to Submit Evidence was sent to Time 
           Equities Inc. with a copy to 82nd Broadway Management Co. Time 
           Equities, Inc. was directed to submit the following:

                1.   The "net lessee agreement" with 82nd Broadway 
                     Management Co.

                2.   Any contract of sale of the subject premises 
                     221 West 82nd Street executed simultaneously 
                     with the "net lessee agreement".

                3.   Written instrument dated August 27, 1984 
                     through which Time Equities, Inc. assumed the 
                     burdens and benefits of a net lessee.

                4.   Documents indicating the relationship between 
                     Time Equities, Inc. and Francis Greenburger.

                5.   Any document(s) by which any net lease 
                     agreement with the fee owner of premises 221 
                     West 82nd Street was assigned.

                6.   Any conveyance by which fee title to premises 
                     221 West 82nd Street was transferred on or 
                     after June 1, 1984.


           In response to the aforementioned Notice, Time Equities, Inc. 
           submitted the following:

                a)   A contract of sale dated June 26, 1984 with 
                     82nd Broadway Management Co. being listed as 
                     the seller and 221 West 82nd Street Equities 












          ARL08393L

                Group, general partnership c/o Francis 
                     Greenburger, General Partner, 55 Fifth Avenue 
                     being listed as the purchaser and the property 
                     being sold listed as the subject premises 
                     herein.  In such contract it was stated that 
                     "Time shall be of essence as to Purchaser's 
                     obligation to close and acquire title 
                     hereunder by March 2, 1987" and that 
                     "Purchaser or Purchaser's designee (the 
                     "Managing Agent") and Seller have 
                     contemporaneously herewith entered into a 
                     management agreement (the "Management 
                     Agreement") whereby Seller has employed and 
                     retained the Managing Agent, between the date 
                     hereof and the earlier of the Closing date, or 
                     such date upon which this contract and/or the 
                     Management Agreement shall have been 
                     terminated pursuant to its terms."

                b)   A Certificate of Amendment of Certificate of 
                     Incorporation of T.C.C. Productions, Inc. 
                     dated July 9, 1969 amending the name of the 
                     corporation to Time Equities, Inc. and listing 
                     the President of the Corporation as Francis 
                     Greenburger.

                c)   Copy of Management Contract dated June 26, 
                     1984 between 82nd Broadway Management Company 
                     as owner and Time Equities, Inc. as agent 
                     whereby owner appointed agent as sole and 
                     exclusive renting and managing agent for the 
                     subject premises.

                d)   Copy of letter dated June 26, 1984 confirming 
                     the parties' understanding of the Contract of 
                     Sale and Management Agreement regarding the 
                     subject premises.  Such letter was signed by 
                     the general partner of 82nd Broadway 
                     Management Company, the general partner of 221 
                     West 82nd Street Equities Group (Francis 
                     Greenburger) and the President of Time 
                     Equities, Inc. (Francis Greenburger).

                e)   Copy of a Closing Statement for Contract of 
                     Sale and Management Contract for the subject 
                     premises dated August 27, 1984.

                f)   Copy of a Power of Attorney form dated August 
                     27, 1984 whereby 82nd Broadway Management Co. 
                     made Time Equities, Inc. the Managing Agent of 
                     the subject premises pursuant to Management 
                     Agreement dated June 26, 1984.






          ARL08393L


                g)   Letter dated December 12, 1986 amending the  
                     June 26, 1984 contract of sale of the subject  
                     premises changing amount of purchase price and date 
                     of closing.

                h)   Copy of a deed signed by the Seller dated 
                     December 24, 1986 conveying the subject 
                     premises from 82 Broadway Management Co. to 
                     221-223 West 82 Owner Co. 55 Fifth Avenue, c/o 
                     Time Equities, Inc.

           The Commissioner is of the opinion that this petition should be 
           denied and that the District Rent Administrator's order should be 
           modified.

           In proceedings involving fair market rent adjustments, where there 
           has been a transfer of ownership of a building, the policy of the 
           former Conciliation and Appeals Board (hereafter CAB) adopted by 
           the DHCR during the period in question provides that the obligation 
           of a new owner to refund excess rent is limited to such excess rent 
           collected by it and may not be extended to excess rent collected by 
           the prior owner in the absence of evidence of any collusion between 
           the new owner and prior owner.  In view of the difficulties 
           encountered by tenants in locating owners to whom rent payments are 
           no longer made and in obtaining excess rent payments paid to such 
           owners and in view of the complicated, entangled owner's history in 
           the proceeding herein, the Commissioner is of the opinion that if 
           an actual change of ownership of the premises (transfer of title) 
           has not occurred, the owner (including a managing agent) currently 
           collecting the rent is responsible for all refunds of excess rent.

           Therefore the question presented in this proceeding is whether an 
           actual change of ownership of the subject premises occurred as of 
           July 1, 1984 when Time Equities, Inc. first began collecting rents 
           at the subject premises thus making Time Equities, Inc. not 
           responsible for refunding excess rent paid by the tenant prior to 
           July 1, 1984.  The Commissioner is of the opinion that no such 
           change of ownership occurred and that Time Equities, Inc. is liable 
           for refunding excess rent paid by the tenant herein prior to July 
           1, 1984.  A careful examination of the record including the 
           documentary evidence submitted on behalf of Time Equities, Inc. 
           discloses that although there was a 1984 contract of sale, fee 
           ownership of the subject premises was not transferred from 82nd 
           Broadway Management Company until at least December 1986, that from 
           July 1, 1984 to at least December 1986 Time Equities, Inc. acted in 
           the capacity of a managing agent for 82nd Broadway Management 
           Company with regard to the subject premises and that the period for 
           which the tenant herein was found to have paid excess rent was from 
           February 1, 1983 through January 31, 1986.  The Commissioner finds 
           that Time Equities, Inc. was acting as the managing agent for the 
           fee owner 82nd Broadway Management Co. and as such is responsible 












          ARL08393L

           for refunding to the tenant herein the full amount of the excess 
           rent collected from February 1, 1983 through January 31, 1986.

           The District Rent Administrator's order is hereby amended to 
           reflect that as regards the tenant herein, Time Equities, Inc. is 
           solely liable for refunding all excess rent.  However, the 
           Commissioner's order and opinion herein is issued without prejudice 
           to whatever rights, if any, Time Equities, Inc. has against 82nd 
           Broadway Management Company for the recovery of that portion of the 
           excess rent to be refunded to the tenant which was actually 
           collected by 82nd Broadway Management Company - the excess rent 
           collected prior to July 1, 1984.

           CAB Opinion 6629, T/A 9909 issued on March 22, 1984 and cited by 
           Time Equities, Inc. in its petition, did not consider the question 
           of whether ownership of the subject premises had changed when Time 
           Equities, Inc. first began collecting rent.

           The owner is directed to reflect the findings and determinations 
           made in this order on all future registration statements, including 
           those for the current year if not already filed, citing this Order 
           as the basis for the change.  Registration statements already on 
           file, however, should not be amended to reflect the findings and 
           determinations made in this order.  The owner is further directed 
           to adjust subsequent rents to an amount no greater than that 
           determined by this order plus any lawful increases.

           The owner is further directed to roll back the rent to the 
           stabilized rent consistent with this order and opinion, and to 
           refund or fully credit against future rents over a period not 
           exceeding six months from the date of receipt of this order, any 
           rent paid by the tenant herein in excess of the lawful 
           stabilization rent.

           In the event the owner does not take appropriate action to comply 
           within 60 days from the date of this order, the tenant may credit 
           the excess rent against the next month(s) rent until fully offset.



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

           ORDERED, that this petition be, and the same hereby is, denied and 
           the Rent Administrator's order be, and the same hereby is, modified 
           in accordance with this order and opinion.












          ARL08393L

           ISSUED:

                                                   ------------------------
                                                   JOSEPH A. D'AGOSTA
                                                   Deputy Commissioner
            
              
                                              






    

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