Docket Number: BL 410264-RO
                                 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.:  BL  410264-RO
                                            :  
             MAUTNER  &  GLICK  CORP.,             DRO  DOCKET  NO.:   35963
             
                              PETITIONER    : 
        ------------------------------------X                           
          
              ORDER AND OPINION ON RECONSIDERATION GRANTING PETITION
                 FOR ADMINISTRATIVE REVIEW,IN PART AND REMANDING 
                       PROCEEDING TO THE RENT ADMINISTRATOR

        On December 15,  1987,  the  above-named  petitioner-owner  filed  a
        Petition for Administrative Review of an order  issued  on  November
        10,  1987  by  a  Rent   Administrator,   concerning   the   housing
        accommodations known as Apartment 1E,  325  East  93rd  Street,  New
        York, New York, wherein the District Rent  Administrator  determined
        the fair market rent  pursuant  to  the  special  fair  market  rent
        guidelines promulgated by the New York City  Rent  Guidelines  Board
        for use in calculating fair market rent appeals.  

        Subsequent to receiving a letter from the owner, dated  February  7,
        1989, wherein the owner advised the Division that it was withdrawing 
        its  petition  following  a  settlement  of  the  issues  with   the
        complaining tenant, as documented in an  enclosed  letter  from  the
        tenant, the Commissioner issued an Order and Opinion Terminating the 
        Proceeding, dated May 22, 1989, as based on the  owner's  withdrawal
        of its petition.

        On June 1, 1989, the owner sent a Request for Reconsideration to the 
        Division wherein the owner proposed that the prior dismissal of  the
        owner's original petition in the Order and Opinion of May  22,  1989
        was incorrect.   The  owner  claimed  therein  that  the  letter  of
        February 7, 1989 had stated that the PAR  should  not  be  withdrawn
        unless this was in conjunction with the withdrawals of the  tenant's
        duplicate complaint then being processed as well as  the  underlying
        complaint, the revocation  of  the  Administrator's  order  and  the
        reinstatement of the rent, and that since the Order and Opinion  did
        not so order those actions, the owner was aggrieved without cause.

        In an Order  issued  on  June  8,  1989,  the  Commissioner  granted
        reconsideration and reopened the Order and Opinion of May  22,  1989
        due  to  an  irregularity  in  a  vital  matter.   The  Commissioner
        determined that since the owner had properly stated  the  conditions
        upon which the withdrawal of its petition would depend and that  the







          Docket Number: BL 410264-RO

        tenant had registered its agreement to them, it was improper for the 
        PAR Order to merely dismiss the owner's PAR without  ordering  those
        conditions.  The Reopening Order further stated that, should the 
        Commissioner, on reconsideration, not approve the aforementioned, or 
        any settlement of the matter by the owner  and  tenant,  the  appeal
        would be considered on the merits.

        Insofar as there has been no further communication from the  parties
        advising the Division  of  a  settlement,  the  Commissioner  herein
        proceeds  with  a  determination  of  the  issues  raised   by   the
        administrative appeal.

        It is noted that the tenant's complaint, which had been filed  under
        Docket  Number  L-000014-R,  has  been  terminated   by   the   Rent
        Administrator in an order issued on October 5, 1990  as  duplicative
        of the proceeding hereunder review.

        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.

        This proceeding was originally commenced by the fili g  by  the  co-
        tenants of a rent  overcharge  complaint  on  July  30,  1984.   The
        tenants took occupancy pursuant to a lease commencing  on  April  1,
        1984 and expiring on July 31, 1985 at a rental of $750.00 per month. 
        The complaint stated that the tenants had been told the prior tenant 
        had paid less than $100.00 per month rent, and there  had  been  few
        alterations.  This complaint was given Docket No. L-000014-R.

        On September 13, 1984 one of the  co-tenants,  Dr.  Caryn  Bradland,
        filed an objection to the initial registered  rent  of  $750.00  per
        month which was given Docket No. 35963.  The objection form was also 
        marked as an overcharge complaint, but was not served on  the  owner
        at that time.

        The owner answered the complaint under  Docket  No.  L-000014-R,  on
        January  14,  1985  that  the  complainants  were  the  first   rent
        stabilized tenants subsequent to the decontrol of the  apartment  on
        March 1, 1984,  and  that  the  initial  rent  was  related  to  the
        apartment's fair market value, rather than the rent controlled rent. 
        The owner also stated that the apartment had been equipped with  new
        kitchen equipment, new bathroom equipment and new closets.  Enclosed 
        with the answer was a copy of the R-42 establishing the decontrol of 
        the apartment and the initial registration statement.

        The tenants replied that the rent of the apartment did  not  reflect
        the fair market rent because of numerous complaints they  had  about
        inadequate conditions.

        On  August  22,  1985  the  owner  responded  that  the   inadequate
        conditions mentioned in the tenants' reply had  been  corrected  and
        that the initial rent of $750.00 was still "fair" for  a  five  room
        apartment on the upper East Side of Manhattan.







          Docket Number: BL 410264-RO

        On November 13, 1986 the  owner  was  served  with  a  copy  of  the
        tenants' objection to the initial registered rent.  An  accompanying
        form indicated that the complaint was related to  rent  overcharges.
        There were two spaces on the  check-box  form  to  indicate  a  Fair
        Market Rent Appeal, but both were unchecked.

        On August 26, 1987 the Administrator requested that the owner submit 
        the complete MCR and MBR  records  of  the  subject  apartment,  the
        Registration Card  and  the  R-42  form  and  fuel  cost  adjustment
        records in order to process the  tenant's  overcharge  complaint  on
        Docket No. L-000014-R.  The owner  promptly  submitted  all  of  the
        documentation cited in the Administrator's request.

        In an order issued under Docket Number 35963, the Rent Administrator 
        determined that the tenants had been charged in excess of  the  fair
        market rent in the total  amount  of  $28,716.48,  including  excess
        security, through October 31, 1987.  Specifically, it was found that 
        the owner submitted no evidence on the  rents  for  similar  housing
        then prevailing in the area and,  also,  that  the  owner  had  been
        denied an MBR increase because of violations in the building.  As  a
        result, the 1982 MCR of $101.01 was increased by 20%,  resulting  in
        an  initial  stabilized  rent  of  $121.21.   Subsequent  guidelines
        increases for each successive lease term brought the lawful rent  to
        $136.83 as of May 1, 1986.

        In its petition, dated December 15, 1987, the  owner  contends  that
        the Administrator had erroneously processed the tenant's  overcharge
        complaint as a fair market rent appeal without advising the owner of 
        this change, and without affording him  the  opportunity  to  submit
        data  of  comparable  rents  in  the  area  for   consideration   in
        determining the initial stabilized rent.  The owner also notes  that
        the tenants' other complaint, which is still  being  processed,  was
        also  never  designated  as  a  fair  market  rent  appeal  by   the
        Administrator.  The owner contends that he complied with the request 
        for the rent paid by the last rent-controlled tenant, and  the  MBR,
        but was never notified, in turn, that the Administrator was treating 
        the complaint as a challenge to the fair market  rent.   This  error
        deprived the owner of the opportunity to submit  comparability  data
        and otherwise respond to that issue, as has been the DHCR's practice 
        in all previous fair market rent appeal proceedings.  The owner also 
        requests that the initial stabilized rent cannot be challenged as  a
        fair market rent appeal  because  it  was  only  converted  to  that
        proceeding after the expiration of the 90-day statute of limitations 
        for objecting to the initial registered rent, and is thus untimely.

        The Commissioner is of the opinion  that  this  petition  should  be
        granted in part and that the proceeding  be  remanded  to  the  Rent
        Administrator for redetermination.

        The owner's first contention, that the tenant's overcharge complaint 
        cannot be converted into a fair market rent appeal  because  it  was
        never designated as such by the tenant, is  not  correct.   Although
        the complaint never specifically claims that the tenants' initial 
        stabilized rent is excessive, this is more than likely due to  their
        never having been served with the DC-2 notice or otherwise  informed

        that they were the first stabilized tenants.  In fact,  the  tenants
        only assert that theirs was not a "fair market rent" after the owner 






          Docket Number: BL 410264-RO
        mentioned that they were the first tenants after  the  decontrol  of
        the  apartment  in  the  owner's  answer  of   January   14,   1985.
        Furthermore, the Commissioner has previously held that such omission 
        in  the  complaint  is  not  "materially  defective",  and   permits
        reframing (Accord. BE 210386-RO).  Finally, the owner's  claim  that
        the appeal is time-barred in that it only became a fair market  rent
        appeal by  conversion  more  than  90  days  after  service  of  the
        registration, which  is  prohibited  by  Section  2522.3(b)  of  the
        current Code, is without merit.  Therefore, the  Commissioner  finds
        that the Administrator acted properly in processing the  case  as  a
        fair market rent appeal. 

        However, the owner is correct in claiming that  the  Administrator's
        failure to properly notify him  of  the  documentation  requirements
        and processing data for fair market rent appeals deprived him of the 
        opportunity to submit such information that is afforded him  by  the
        Rent Stabilization Code.

        Section 2522.3 of the current Rent Stabilization  Code  provides  in
        pertinent part, that fair market rent adjustment applications are to 
        be determined by the use of  special  fair  market  rent  guidelines
        orders promulgated by the Rent Guidelines Board, and by a comparison 
        with  the  rents  generally  prevailing  in  the   same   area   for
        substantially similar housing  accommodations.   In  utilizing  such
        comparability data for fair market rent  appeal  cases  filed  after
        April  1,  1984,  it  is  the  DHCR's  procedure  to  accept,  where
        validated, (1) the legal regulated rents  for  which  the  time  for
        filing a Fair Market Rent Appeal has expired and no such  appeal  is
        pending, or which has been determined pursuant to a Fair Market Rent 
        Appeal, as based on a lease commencing  within  a  four-year  period
        prior to, or a one-year period subsequent to the commencement of the 
        initial lease period of the premises; or (2) at the owner's  option,
        the market rents in effect for comparable housing on the date of the 
        initial lease for the subject-premises.

        In the instant case, an examination of the record reveals that the 
        owner was not afforded an opportunity to provide rental data for use 
        in   either   of   the   comparability   options   outlined   above.
        Specifically, it has been DHCR practice for the owner to be  sent  a
        Schedule form on which the comparability data outlined above may  be
        entered and submitted, as well  as  a  notice  of  instructions  and
        rights  of  appeal.   This  was  not  done  in  the  instant   case.
        Therefore, in recalculating the fair market rent, the  Administrator
        is  directed  to  afford  the  owner  an   opportunity   to   submit
        comparability data in accordance  with  the  provisions  of  Section
        2522.3(e) of the Rent Stabilization Code (effective May 1, 1987).

        It is noted that the remaining tenant in the subject  apartment  had
        been included on the lease as a lawful co-tenant with  the  original
        complainant, but has never been made a party to the proceedings.  






          Docket Number: BL 410264-RO

        The  Administrator  is  directed  to  add  the  current  tenant   as
        complainant for the period in which  she  shared  tenancy  with  the
        original complainant, and for all subsequent periods included in its 
        determination.

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

        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 automatic stay of so much  of  the  District  Rent
        Administrator's order as directed a refund is hereby continued until 
        a new order is issued upon  remand.   However,  the  Administrator's
        determination as to the rent is  not  stayed  and  shall  remain  in
        effect, except for any adjustments pursuant to lease renewals, until 
        the Administrator issues a new order upon remand.

        ISSUED:




                                                                      
                                        ELLIOT SANDER
                                        Deputy Commissioner


    

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