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

          APPEAL OF                              DOCKET  NO.:  ARL  11250-L
                                              :  D.R.O. ORDER NO.:
                                                 16017,   Examining    Unit

                              PETITIONER      : 


               On June 19, 1986, the above-named petitioner-owner  filed  a
          Petition for Administrative Review against an order issued on May 
          19, 1986, by the Rent Administrator, Two World Trade Center,  New
          York,  New  York,  concerning  housing  accommodations  known  as
          Apartment 22-I, 340 East 93rd Street, New York, New York, wherein 
          the  Rent  Administrator  determined  that  there  had  been   an
          overcharge and ordered a refund  of  $5855.48,  including  treble
          damages and excess security. 

               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.  

               The tenant (Alisa  Klagman)  commenced  this  proceeding  on
          August 7, 1984 by filing an objection to  registration,  in  part
          based on the allegation that the April 1, 1984 rent registered by 
          the owner was incorrect, and that she had actually  paid  $972.21
          on that date.  

               In answer to the complaint, the owner stated that there  was
          no overcharge and submitted copies of leases  from  December  15,
          1980, the alleged base date for the subject building.

               In  Order   Number   16017,   Examining   Unit,   the   Rent
          Administrator determined that there had been the overcharge 

          stated above.  The Administrator's  calculations  included  a  5%
          vacancy allowance under Guidelines 15 and did not grant the owner 
          any 2.2% increases pursuant to Section 421a of the Real  Property
          Tax Law (RPTL).   

               In  this  petition,  the  owner  contends  that   the   Rent

          ADM. REVIEW DOCKET NO.: ARL 11250-L
          Administrator's Order is incorrect and should be modified because 
          the Administrator did not credit  the  owner  prospectively  with
          the 2.2% increase pursuant to RPTL Section 421a  that  the  owner
          had neglected to impose.   In  a  supplement  thereto  the  owner
          contends  that the Administrator should have allowed the owner  a
          15% vacancy allowance under Guidelines Order  Number  15,  rather
          than the 5% actually used by the Administrator.

               In answer to this petition, the  tenant  contends  that  the
          order should be upheld because the owner has failed to prove that 
          the subject building is covered by Section 421a of the RPTL.  In 
          addition, the tenant alleges the owner incorrectly  computed  the
          2.2% increase for the years 1982, 1983 and 1984.

               The petitioner was requested to submit proof of RPTL Section 
          421a coverage.  In a letter dated August 7, 1989 the owner  noted
          that the tenant's initial lease included  a  rider  advising  the
          tenant of the 421a coverage and of the 2.2% increases thereunder. 
          A copy of the lease and rider, both signed  by  the  tenant,  are
          attached to this letter as is a letter from  the  New  York  City
          Bureau of Finance, Bureau of Real  Property  Assessment,  stating
          that the subject building is covered by the 421a  program.   Also
          attached  to  the  owner's  letter  was  the  supplement  to  the
          petition, raising the Guidelines 15 argument discussed above.

               A copy of this  letter  and  the  attachments  thereto  were
          served on the tenant on September 26,  1990,  giving  the  tenant
          twenty days to respond thereto.  To date no  such  response  have
          been received. 

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

               The subject building has been shown to  be  covered  by  the
          421a program.  Accordingly, the initial rent of $810.00  for  the
          December 15, 1980 to December 31, 1981 lease is the base rent and 
          the owner was entitled to add 2.2% of that rent ($17.82)  on  the
          anniversary dates  of  that  lease  for  a  total  of  nine  2.2%
          increases.  Increases imposed before  November  19,  1982  become
          part of the base rent.  Those imposed after that date are carried 
          as separate charges.  Normally when an owner  charges  less  than
          the stabilized rent the difference is deemed waived and can not 

          be recouped at a later date.  Collingwood Enterprises v. Gribetz, 
          N.Y.L.J., April 24, 1975, p. 17, col.  6  (Sup.  Ct.,  N.Y.  Co.,
          Fine, J.).  The 421a increase is an exception to  this  rule,  so
          that an owner can charge prospectively  for  2.2%  increases  not
          previously charged or previously only partially charged.       

               Accordingly, the attached rent calculation chart credits the 
          owner with certain 2.2% increases pursuant to RPTL Section 421a.

               In addition, the owner is correct that it was entitled to  a
          15%  vacancy  allowance  under  Guidelines   Order   Number   15.
          Guidelines  Order  15  allows  such  a  15%  increase  "where  no
          additional levels of rent increase (vacancy allowances) have been 
          charged  for  that  unit  pursuant  to  provisions  of  any  Rent
          Guidelines Board Orders governing new tenancies commencing on  or

          ADM. REVIEW DOCKET NO.: ARL 11250-L
          after July 1, 1975."  (Otherwise, the allowance could be  0%,  5%
          or 10%, depending on the prior rental history.)

               In the instant proceeding, the  only  vacancy  leases  since
          1975 were the December 15, 1980  initial  lease  under  the  421a
          program and the vacancy lease of former tenant Raskin, commencing 
          February 15, 1982.  The 1980 lease rent was  determined  pursuant
          to the regulations of the Housing  Preservation  and  Development
          Department of the City of New York (HPD) and  therefore  did  not
          include any vacancy  allowance  pursuant  to  a  Rent  Guidelines
          Order.  The 1982 vacancy lease rent was $835.00, being  a  $25.00
          or approximately 3.1%, increase over the prior rent  of  $810.00.
          Since the then applicable  Guidelines  Order  13  allowed  a  10%
          Guidelines increase, plus a 15% vacancy allowance,  it  is  clear
          that the owner did not charge any vacancy allowance.  [Guidelines 
          Order 13 defines the vacancy allowances as a 15%  increment  over
          and above the allowable Guidelines  increase.   Accordingly,  the
          actual 3.1% increase taken can not be  seen  as  even  a  partial
          imposition of a vacancy allowance.]   

               Therefore, the attached chart uses a 15%  vacancy  allowance
          under Guidelines Order 15.  As  shown  on  the  chart,  once  the
          Section 421a increases and the 15% vacancy  allowance  are  taken
          into consideration, there was in fact no overcharge up to May 31, 
          1986, the computation date of the Administrator's Order.  

               If the owner has already complied with  the  Administrator's
          Order and, as a result of the instant  determination,  there  are
          arrears due to the owner from the tenant,  the  owner  is  hereby
          directed to allow the tenant to pay off the arrears in thirty-six 
          equal monthly installments during  the  next  thirty-six  months.
          Should the tenant vacate after the issuance of  this  Order,  all
          arrears are due immediately. 

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

               ORDERED, that this petition for  administrative  review  be,
          and the same hereby is, granted, and, that the order of the  Rent
          Administrator be, and the same hereby is, modified in  accordance
          with the Order and Opinion to show that there was no overcharge.


                                          ELLIOT SANDER
                                          Deputy Commissioner



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