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.: BD 610535-RO
                                         :  
                                            DRO DOCKET NO.: B 3100282-R
       SAILON REALTY CORP.,                                 CDR 29,559
                           PETITIONER    : 
     ------------------------------------X                             


                 ORDER AND OPINION REMANDING PROCEEDING ON APPEAL

     On April 25, 1987, the above named petitioner-owner filed a  Petition  for
     Administrative Review against an order issued on March 24,  1987,  by  the
     District Rent Administrator, 10  Columbus  Circle,  New  York,  New  York,
     concerning housing accommodations known  as  Apartment  2B,  2043  Holland
     Avenue,  Bronx,  New  York,  wherein  the  District   Rent   Administrator
     determined that the owner had overcharged the tenant.

     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  25  of  the  former  Rent
     Stabilization Code and Section 2522.3 of the  current  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  issue
     raised by the administrative appeal.

     This proceeding was commenced on February 16, 1984, by the tenant's filing 
     of a rent overcharge complaint with the New  York  City  Conciliation  and
     Appeals Board (CAB), the agency formerly charged with enforcing  the  Rent
     Stabilization Law.

     In its answer to the complaint, the owner stated that  the  tenant  herein
     was the first rent stabilized tenant of the subject  apartment,  that  the
     tenant was being charged a  fair  market  rent,  and  that  there  was  no
     overcharge.









          DOCKET NUMBER: BD 610535-RO
     On March 15, 1986, the Division of Housing and  Community  Renewal  (DHCR)
     requested from the owner copies of the DC-2 notice with proof  of  service
     and the R-42 notice.  On April 7, 1986, the owner mailed to DHCR copies of 
     an Owner's Report of Vacancy Decontrol dated March 21, 1986 and  a  Notice
     to Rent Stabilized Tenant of Right to File a Fair Market Rent Appeal which 
     was served on the tenant on March 26, 1986.

     In Order Number CDR 29,559  issued  March  24,  1987,  the  District  Rent
     Administrator determined that the base rent for the subject apartment  was
     $325.09, and that the tenant had been overcharged from May 1, 1982 through 
     April 30, 1984.  The Administrator directed the owner  to  refund  to  the
     tenant $972.00 which included excess security and interest on that portion 
     of the overcharge occurring on or after April 1, 19 84.

     In this petition, the owner contends in substance that the  District  Rent
     Administrator's order is incorrect and  should  be  reversed  because  the
     tenant  herein  is  the  first  rent  stabilized  tenant  of  the  subject
     apartment, the owner was entitled to charge the tenant a fair market  tent
     without regard to the vacancy  and  renewal  factors  set  forth  in  Rent
     Guidelines Board  Order  Number  13,  and  the  Administrator  incorrectly
     utilized the prior tenant's rent control rent as the base rent to  compute
     the complaining tenant's initial rent.

     The tenant did not submit a response to the owner's petition.

     The Commissioner is of the opinion that this proceeding must  be  remanded
     for further processing.

     A review of the record in the  instant  case  indicates  that  the  tenant
     herein was the first  rent  stabilized  tenant  and  was  questioning  her
     initial rent.  Accordingly, this proceeding is being remanded to treat the 
     tenant's  overcharge  complaint  as  a   fair   market   rent   adjustment
     application filed prior to April 1, 1984.  All parties are to be  notified
     and given a chance to submit evidence in such remanded proceeding.

     The Commissioner notes that the DC-2 notice wasn't served  on  the  tenant
     until March 26, 1986 more than two years after the tenant's filing of  her
     complaint and almost four years after the tenant moved  into  the  subject
     apartment. 

     Accordingly, the Commissioner  finds  that  the  tenant  was  entitled  to
     challenge the initial legal regulated rent pursuant to Section 25  of  the
     former Rent Stabilization Code.

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

















          DOCKET NUMBER: BD 610535-RO
     ORDERED, that this petition be, and the same hereby  is,  granted  to  the
     extent of remanding this proceeding to the District Rent Administrator for 
     further processing  in  accordance  with  this  order  and  opinion.   The
     Administrator's order is hereby revoked.  Any arrears owed by  the  tenant
     as a result of this order shall be paid by the  tenant  to  the  owner  in
     equal monthly installments over the course of the next twelve months.

     ISSUED:
                                                                   
                                             ELLIOT SANDER
                                          Deputy Commissioner       
                                        
    

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