DOCKET NUMBER:  ART 10997-L; SJR 3713
                                 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  SJR NO. 3713
     IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
     APPEAL OF                              DOCKET NO. ART 10997-L
                                         :  
                                            DRO DOCKET NO.OI 10623-D2;
     HENRY SMITH, HASKEL                    OI 10898-D2;OI 11068-D2;
     HOFFENBERG & SANDRA CHARLAP            OI 10897-D2;TC 68785-G
                           PETITIONER    :  TC 72623-G;TC 80308-G
     ------------------------------------X                             
          ORDER ND OPINION REOPENING PROCEEDING AND DENYING PETITION FOR
              ADMINISTRATIVE REVIEW AFTER REVIEW AND RECONSIDERATION
                           PURSUANT TO JUDGMENT OF COURT                       
          
     On June 13, 1986 the abovenamed petitioner tenants filed  a  Petition  for
     Administrative Review against an order  issued  on  May  9,  1986  by  the
     Administrator concerning the housing accommodations known as 40 East  62nd
     Street, Apartments 3E, 3W & 4E, Lower Manhattan.
          
     On October 28, 1988 the Commissioner issued an order and  opinion  denying
     the petition.

     The tenants instituted  an  Article  78  proceeding  and  the  matter  was
     remitted by the Court for limited reconsideration as discussed more  fully
     infra.

     In 1982 and 83 the owner, The Browning School, an  educational  non-profit
     institution, filed applications with the Conciliation and Appeals Board, a 
     predecessor of this agency, formerly charged with administering  the  Rent
     Stabilization Law and Code pursuant to Section 54D of the then  applicable
     former Rent Stabilization Code.  The applications  sought  permission  not
     to renew the tenants' leases and to withdraw the accommodations  from  the
     rental market for use in connection with its educational activities.

     In 1983 and 84 the tenants subsequently filed complaints  of  the  owner's
     failure to offer them renewal leases pursuant to Section 60 of the  former
     Code within the "window" period specified therein (not more than  150  nor
     less than 120 days prior to the expiration of their last leases).

     The chronology of the filing of the owner's applications and the  tenants'
     complaints, the effective dates of  the  tenants'  last  leases,  and  the
     "window" periods under Section 60 of the former  Code  is  set  forth  for
     convenience in a schedule infra.

     The Commissioner notes that 2 applications were filed  prior  to  and  one
     within  the  "window"  period.   In  the  case  of  petitioner  Hoffenberg
     (Apartment 4E) a letter was sent to the tenant also prior  to  the  window
     period.  In the case  of  petitioner  Charlap  (Apartment  3E)  the  owner
     alleged that a letter was sent during the window period on October 4, 1983 
     advising of its intent not to renew the lease.










          DOCKET NUMBER:  ART 10997-L; SJR 3713
                                    SCHEDULE

     Tenant     Apt     Owner's     Tenant's      Last Lease      "Window"
                      Application   Complaint     Term       

     Smith       3W    2/10/83       5/13/83   9/1/80-8/31/83   4/3-5/3/83
     Hoffenberg  4E   11/19/82       1/12/83   4/1/80-3/31/83   11/1-12/1/82
     Charlap     3E    9/8/83        1/3/84    3/1/81-2/28/84   10/1-10/31/83

     This agency assumed jurisdiction  of  the  proceeding  on  April  1,  1984
     pursuant to the Omnibus Housing Act of 1983.

     Prior to the filing of the owner's applications respecting tenants Smith & 
     Hoffenberg the Legislature  by  Chapter  555  of  the  Laws  of  1982  had
     effectively removed the statutory basis (Section YY51-6.0(c)(9) of the New 
     York City Administrative Code) for Sections 54D(2) &  (4)  of  the  former
     Stabilization Code as of June 20,m 1982.  The Omnibus Housing Act had  the
     effect of reinstating Sections 54D(2) & (4) as of June 30, 1983 (or  prior
     to filing of the owner's application respecting tenant Charlap)  but  also
     transferred jurisdiction of such matters to the courts.

     Thus, there was a statutory vacuum or hiatus from June 20,  1982  to  June
     30, 1983 during which the CAB did not  have  any  authority  to  entertain
     applications  such  as  the  owner's.   Thereafter  jurisdiction  of  such
     matters was transferred to the courts.

     The herein appealed order of the Administrator,  issued  after  a  hearing
     conducted on September 11, 1985, dismissed the owner's applications on the 
     grounds that this agency never had jurisdiction due to the changes in  the
     law abovenoted.  The Administrator also dismissed the tenants'  complaints
     noting that they might be raised  as  defenses  in  any  court  proceeding
     commenced by the owner or, in the alternative, finding that the complaints 
     may be refiled if the owner did not commenced such a proceeding.  (Such  a
     court proceeding has been instituted and is currently pending).

     The tenants have urged throughout  this  proceeding  that,  although  this
     agency had no jurisdiction over the merits of the owner's applications, it 
     has always had jurisdiction over the tenants' complaints.

     The tenants point out that as to  2  of  them,  Smith  &  Hoffenberg,  the
     relevant window periods ran out during the abovenoted statutory hiatus and 
     argue that the owner's applications, also filed during  that  period  were
     legal nullities; thus, there was no  legal  justification  for  the  owner
     refusing to renew their leases.

     The tenants further argue that none of them had received formal notice  of
     the owner's intent not to renew their leases  within  the  window  periods
     and, therefore, their rights to renewal leases have vested in accord  with
     the determination of the Court of Appeals in Golub v. Fran, 65 NY 2d  900,
     493 NYS 2d 451 (1985). 

     The Commissioner notes that in the interim the current Stabilization  Code
     became effective as of May 1, 1987 and  that  under  Sections  2524.2  and
     2524.4 thereof an owner in the  position  of  the  Browning  School  would
     today be required to give specific notice  within  a  150-120  day  window
     period as a condition precedent to going to court to obtain possession  of
     the apartments.   There  was  no  similar  provision  in  the  prior  Rent
     Stabilization Code.







          DOCKET NUMBER:  ART 10997-L; SJR 3713
     As abovenoted, the Commissioner denied the tenants' petition  against  the
     Rent Administrator's order  and  the  tenants  instituted  an  Article  78
     proceeding.

     In remitting the proceeding on the Article 78 as abovenoted, Justice Cohen 
     stated, "...[T]he issue of whether the landlord  is  entitled  to  recover
     possession of the apartments herein  is  properly  before  this  court....
     [However] petitioner's application is granted to the extent  of  remanding
     tot he DHCR the issue of the landlord's compliance or  lack  thereof  with
     the correct procedure outlined in the RSC before  refusing  to  renew  the
     tenants' leases."

     The Commissioner, upon reconsideration pursuant to judgment of  Court,  is
     of the opinion that the petition should be denied.

     Section 2527.7 of the current code provides that:

     "Except as otherwise provided herein, unless undue hardship  or  prejudice
     results therefrom, this Code shall apply to any proceeding pending  before
     the DHCR, which proceeding commenced on or after April 1, 1984, or where a 
     provision of this Code is amended, or an applicable statute is enacted  or
     amended during the pendency of a proceeding, the  determination  shall  be
     made in accordance with the changed provision."

     The Commissioner finds that were the owner's  applications  to  be  denied
     solely on the basis of the new Code's notice  of  non  renewal  provisions
     then that would result in substantial prejudice.   Therefore,  application
     of the pre May 1, 1987 Code warrants consideration.

     The Commissioner also finds that absent a  finding  of  intentional  delay
     (waiting for the restoration by the Legislature of the statutory predicate 
     for this type of application) the mere fact that the owner's  applications
     were pending during the period when the  statutory  underpinning  did  not
     exist does not preclude applying the law as it existed when  the  decision
     was made.  It is clear that the general rule  is  that,  unless  there  is
     clear prejudice, the law at the time of the decision governs.

     So the next question presented is what prejudice would  there  be  to  the
     tenants?  The Commissioner has previously ruled that the absence of strict 
     compliance with timely notices  of  non  renewal  in  cases  requiring  an
     application to the Agency will not act to totally defeat an owner's rights 
     as long as the owner was in substantial compliance and not acting  in  bad
     faith (See Docket Nos. BH 410017-RO et al).

     In this case the Commissioner finds that, taking into consideration all of 
     the equities, there exists no prejudice to the tenants.   Even  had  there
     been an immediate decision dismissing the owner's applications on the lack 
     of a statutory predicate and even had the owner then given renewal  leases
     and first recommenced the action upon the enactment of the Omnibus Housing 
     Act, serving notices of non renewal at  that  point,  those  leases  would
     have long since expired.  The tenants have  also  been  exempt  throughout
     this proceeding from guidelines increases to which the  owner  would  have
     been  entitled  if  their  leases  had  been   regularly   renewed.    The
     Commissioner is of the opinion that the tenants have already  enjoyed  all
     the protection to which (arguendo) they might have been entitled and  that
     they have not been prejudiced.

     The tenants are now seeking additional benefits-that the owner  be  forced
     to also offer leases for additional 2 or 3 year terms,  await  new  window






          DOCKET NUMBER:  ART 10997-L; SJR 3713
     periods, give additional formal,  notice,  and  then  begin  new  judicial
     proceedings to obtain  the  apartments  for  its  not  profit  educational
     objectives.  The Commissioner is of the opinion that it is not the  intent
     of the law to confer such  additional  benefits  against  this  non-profit
     owner.

     The Commissioner also notes that the instant applications were  all  filed
     within or prior to the window periods applicable for other purposes  under
     judicial interpretation and the tenants thereby  had  actual  notice  that
     their leases would not be renewed.  Accordingly,  the  Commissioner  finds
     that the owner's applications  would  not  have  been  dismissed  and  the
     tenants' complaints granted simply because the owner had not given  notice
     of non renewal in addition to the  applications  or  because  of  lack  of
     jurisdiction.

     The Commissioner therefore finds that this owner is not  now  required  to
     tender new leases and await new window periods before commencing  judicial
     proceedings to obtain the apartments for non-profit educational purposes.

     THEREFORE,  pursuant  to  the  judgment  of  the  Court   and   the   Rent
     Stabilization Law and Code, it is

     ORDERED, that this petition be, and the same hereby is, denied;  and  that
     the Administrator's order and the Commissioner's prior  order  of  October
     28, 1988 be, and the same hereby are, modified so as to  conform  to  this
     order and opinion and, as so modified, are affirmed.


     ISSUED:




                                                                            
                                                  ELLIOT SANDER
                                               Deputy Commissioner

    

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