Docket Number: ARL-3242-K
                                 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 
        IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
        APPEAL OF                              DOCKET NO. ARL-03242-K
                                            :  
          MID-STATE MANAGEMENT CORP,           DRO DOCKET NO. KC-000023-OH
                                                  
                              PETITIONER    : 
        ------------------------------------X                           
          
        ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW, AND
                REMANDING THE PROCEEDING FOR FURTHER CONSIDERATION

        On May 31, 1985, the above named petitioner-owner filed  a  Petition
        for Administrative Review against a notice dated May 6, 1989, by the 
        Director of Order Processing at the then 10 Columbus Circle District 
        Rent Office.  The notice advised the owner  that  the  Division  was
        suspending processing  of  the  owner's  alternative  hardship  rent
        increase application on the grounds that as the alternative hardship 
        procedure only became effective July 1, 1983, the  owner  could  not
        use expenses or income for the period January 1, 1983  to  June  30,
        1983.  The owners were afforded 90 days  within  which  to  resubmit
        their application using a test year commencing no earlier than 
        July 1, 1983.

        In the  petition  the  owner  suggests,  in  essence,  that  it  was
        arbitrary, capricious and contrary to law for the Division to refuse 
        to process the owner's  alternative  hardship  application  on  such
        grounds and requests that the owner's application be processed using 
        calendar 1983 expenses and income.

        The Commissioner concurs.

        Section 49 of Chapter 403 of the Laws of 1983,  amended  subdivision
        C of Section YY51-6.0 (recodified as Section  26-511)  of  the  Rent
        Stabilization Law, and added a new paragraph 6-a,  which  instituted
        the alternative hardship procedure, effective July 1, 1983.

        In  the  then  absence  of  a  Rent  Stabilization  Code  containing
        alternative hardship provision, the Division, pursuant to  authority
        and discretion under Chapter 403 of the Laws  of  1983,  promulgated
        Operational  Bulletin  85-2,  Rent  Increases  for  Rent  Stabilized
        Housing Accommodations  Based  Upon  Owner  Hardship-Guidelines  and
        Procedures, to carry out its statutory mandate. 

        The Rent Stabilization Code,  as  amended  effective  May  1,  1987,
        incorporated   alternative   hardship   procedures   under   Section
        2522.4(c).  Neither the Law, the Code, nor Operational Bulletin 
        85-2, restrict the use of expenses and income data prior to July  1,
        1983.

        The Administrator's refusal to consider the owner's  application  on
        the grounds that the income and expenses figures included  data  for
        the months prior to July 1, 1983 served to delay the effective  date






          Docket Number: ARL-3242-K
        for filing alternative hardship application to July 1, 1984.

        However, precluding processing of alternative  hardship  application
        prior to July 1, 1984, serves to  establish  July  1,  1984  as  the
        effective date of the law.  There is no warrant in the  language  of
        Section  49  for  such  results.   Accordingly  the  Administrator's
        findings must  be  revoked  and  the  matter  remanded  for  further
        processing for all purposes.  On remand the Rent Administrator shall 
        consider the record to date.  The  parties  shall  be  provided  the
        opportunity  to  submit  additional  information  and   to   comment
        thereupon.

        THEREFORE, in accordance with the provisions of Chapter 403, Laws of 
        1983, as amended by Chapter 102 of the Laws of 1984, it is

        ORDERED, that this petition  be  granted  and  that  the  matter  be
        remanded for further consideration in accordance with this order and 
        opinion.

        ISSUED:




                                                                      
                                        ELLIOT SANDER
                                        Deputy Commissioner




                                                   
    

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