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

          APPEAL OF                              DOCKET NO. BA 210071 RO
                                              :  DRO DOCKET NO. K-3105610-R
               LAFAYETTE  KINGS  CORP.              TENANT:   MAXINE   ROACH

                                PETITIONER    : 


               On January 7, 1987, the above-named petitioner-owner filed  a
          Petition for Administrative Review  against  an  order  issued  on
          December 3, 1986, by the Rent Administrator, 10  Columbus  Circle,
          New York, New York, concerning the housing accommodations known as 
          101 Lafayette Avenue,  Brooklyn,  New  York,  Apartment  No.  14F,
          wherein the Rent  Administrator  determined  that  the  owner  had
          overcharged the tenant. 

               The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2526.1 of the Rent Stabilization Code.

               The issue herein is whether the  Rent  Administrator's  order
          was warranted.

               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 originally commenced  by  the  filing  in
          March, 1984, of a rent overcharge complaint by the tenant in which 
          the tenant stated that she first moved to the subject apartment on 
          October 1, 1982 at a rental of $415.00 per month.

               The owner was served with a copy of  the  complaint  and  was
          requested to submit rent records to prove the  lawfulness  of  the
          rent being charged.  In response the owner stated that it believes 
          the subject apartment  was  rent  controlled  before  the  current
          tenant moved in, but that in any event, the initial rent effective 
          October 1, 1982, was established pursuant to Section 2429  of  the
          Public Authorities Law since the subject  premises  was  renovated
          under a New York State SONYMA insured loan.  In  support  of  such
          contention, the owner submitted a copy  of  the  tenant's  vacancy
          lease wherein it was noted that the initial rent for  the  subject
          apartment was established pursuant to Section 2429 of  the  Public
          Authorities Law.

               In Order Number CDR 27875, the Rent Administrator  determined
          BA 210071 RO

          that the owner had failed to submit a complete rental history  and
          based thereon, found that the tenant had been overcharged  in  the
          amount of $3495.74 through September  30,  1986  including  excess
          security and interest on that part of the overcharge occurring  on
          and after April 1, 1984, and directed the  owner  to  refund  such
          overcharge to the tenant.

               In this petition, the owner alleges in substance  that  there
          was no rent overcharge in that the initial  rent  of  the  subject
          apartment upon  occupancy  by  the  tenant  herein  was  correctly
          established pursuant to Section 2429  of  the  Public  Authorities
          Law.  Subsequently, the owner submitted a copy of a  mortgage  for
          the subject premises which indicated that in 1981 the State of New 
          York Mortgage Agency (SONYMA) insured a loan to  rehabilitate  the
          subject premises.

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

               Section 2429  of  the  Public  Authorities  Law  provides  in
          pertinent part that all dwelling units in a multiple dwelling  the
          rehabilitation or construction of which commenced  after  July  1,
          1978 and which is financed by a loan insured by the State  of  New
          York Mortgage Agency, shall be subject to the  Rent  Stabilization
          Law, beginning immediately  after  initial  rents  as  established
          under applicable provisions of the  Rent  Stabilization  Law,  the
          Emergency Tenant Protection Act of 1974  or  the  Private  Housing
          Finance Law for such dwelling units become effective on the  basis
          of such rehabilitation or construction, provided that any occupant 
          in possession of a dwelling unit that first becomes subject to the 
          Rent Stabilization Law or the Emergency Tenant Protection  Act  of
          1974 pursuant to this section shall be offered a  two  year  lease
          notwithstanding any contrary provisions of, or regulations adopted 
          pursuant to such law or act, at the initial rent  established  for
          such dwelling unit.

               In the instant case, the evidence of  record  discloses  that
          the subject premises was rehabilitated after July 1, 1978  with  a
          loan insured by the State of New York Mortgage Agency pursuant  to
          Section 2429.  Further the tenant herein initially took possession 
          pursuant to a two year lease as required.  Accordingly  the  owner
          should not have been found in default due to a failure to submit a 
          complete rental history.  Rather the initial  rent  was  correctly
          established as $415.00 effective October 1, 1982 to September  30,
          1984 and then correctly increased by 9% to $452.35 upon a two year 
          lease renewal effective October 1,  1984  to  September  30,  1986
          pursuant to Guideline 16.  Therefore there was no rent  overcharge
          and the Rent Administrator's order to that effect must be revoked.

               If  the  owner   has   already   complied   with   the   Rent
          Administrator's order and there are arrears due to the owner as  a
          result of the instant determination, the tenant  is  permitted  to
          pay off the arrears in twenty four equal monthly installments.

          BA 210071 RO

               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, revoked and it is  found
          that there was no rent overcharge. 


                                          ELLIOT SANDER
                                          Deputy Commissioner


                            ADMINISTRATIVE REVIEW BUREAU
                                 COVERING MEMORANDUM

          ARB Docket No.: BA 210071 RO

          DRO Docket No/Order No.: K-3105610-R

          Tenant(s): Maxine Roach

          Owner: Lafayette Kings Corp.

          Code Section: 2526.1 of RSC

          Premises: 101 Lafayette Avenue, Brooklyn, New York, Apt.14F

          Order        and         Opinion         Granting         Petition
               Petition granted on basis that pursuant to  Section  2429  of
          Public Authorities Law, owner charged  correct  initial  rent  for
          subject apartment and no rent overcharge occurred.


          Processing Attorney:                                             

          Supervising Attorney:                                            

          Bureau Chief:                                                    

          Deputy Commissioner:                                             

          Mailed copies of Order and Determination to:
                           Tenant's Atty             
                           Owner's Atty              

                           Date:              :  by               


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