DHCR Decisions BA 410349-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.:                                        BA 410349-RO       WYNDHAM REALTY CO.,              DISTRICT RENT                                        ADMINISTRATOR'S DOCKET  NO.:                        PETITIONER      L 3116622-R ----------------------------------x  ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW                                                                 On  January  6,  1987  the above named petitioner-owner  filed  a Petition  for Administrative Review against an order of the  Rent Administrator,  10 Columbus Circle, New York,  New  York,  issued December  15,  1986.  The order concerned housing  accommodations known  as Apartment 4-H located at  145 Fourth Avenue, New  York, New  York.  The Administrator determined that the tenant had been overcharged. The Commissioner has reviewed the record and carefully considered that portion relevant to the issues raised by this appeal. 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 other-wise   indicated,  reference  to  sections  of   the   Rent Stabilization  Code (Code) contained herein are to  the  Code  in effect on April 30, 1987. The  Tenant commenced this proceeding by filing a rent overcharge complaint on March 29, 1984.  In that complaint the tenant stated that  he moved into the apartment in February 1978 pursuant to  a three  year  lease  at a rent of $350.00 per month.   The  tenant asserted  that  the owner charged him an excessive increase  over the prior tenant's rent. The  owner  was served with the tenant's complaint  and  was  re- quested to supply a full rental history from the base date (i.e. that  date  on  which the apartment became subject  to  the  Rent Stabilization Law). In  response, the owner submitted leases from July  1,  1975  and asserted  that  all  increases in rent for the subject  apartment were  lawful.  On July 25, 1986, the owner was sent a  Notice  of Pending  Default with specific instructions to submit  the  lease from  June 30, 1974 to July 1, 1975.  In response the owner  sub- mitted a copy of its prior answer. The  Administrator's order uses the $271.84 charged to the  prior tenant,  Beth  Israel Medical Center, as the "Base Rent  for  the purposes of this order" and directs the owner to refund $5,808.64 in  overcharges including excess security and interest  on  over- charges collected after April 1, 1984. In the petition for administrative review, the owner asserts that the Administrator erroneously used 1977 as the base date when the owner  had  submitted a rent history to 1974, that  the  Adminis- trator  should  have  determined  a  fair  market  rent  for  the complainant's initial rent because the prior tenant  was  commer- cial and not subject to stabilization, and that another complaint by  the  same  tenant (Docket No. 38755-G) was marked  closed  on February  11, 1981 based on the New York City's Conciliation  and Appeals Board (CAB) determination that the subject apartment  was one  of fourteen rented to Beth Israel Medical Center for Commer- cial/Professional  use.  Although the petitioner  claims  that  a copy of a 1981 CAB letter is enclosed, it is not. In answer to the petition, the tenant contends that his apartment is  residential and not commercial, that the copy  of  the  lease with Beth Israel does not specify that it was commercial and that the  tenant was not aware of any decision or letter from the CAB, and that a copy of such was not included with the petition. The  owner  replied and argued that a residential  apartment  can have a commercial lease and that Beth Israel entered into such  a lease  for the purpose of providing residential housing for their invitees or employees. In  response to a June 10, 1991 request, the owner did  submit  a copy  of  the  1974 lease with Beth Israel which was  a  one-year renewal lease.  The owner was also asked to submit a copy of  the CAB  order referred to in its petition.  It submitted a  copy  of its  answer, dated December 17, 1979, to a complaint by the  same tenant. After  careful  consideration  of the  evidence  of  record,  the Com-missioner  is  of  the opinion that the  petition  should  be denied. Pursuant  to Section 2(f) of the former Rent Stabilization  Code, stabilization applies to dwelling units located in  any  Class  A multiple  dwelling which are occupied or intended to be  occupied by  one  or  more  individuals as a residence. According  to  the owner's  own  statements,  the subject  apartment  was  used  for residential purposes by Beth Israel Medical Center to  house  its employees and was, therefore, subject to stabilization throughout this  tenancy.   Since the complaining tenant was not  the  first stabilized  tenant,  it would not have been appropriate  for  the Administrator  to determine a fair market rent for this  tenant's initial rent. Although  the  petitioner  is  correct  in  asserting  that   the Adminis-trator should have used 1974 rather than 1977 as the base date, this modification does not change the determination of  the lawful  rent and the resulting overcharges.  Using the 1974  rent of  $239.68 still results in a finding that the last rent paid by the  prior  tenant  ($271.84) is the basis for  establishing  the lawful  rent  for  the  complaining tenant's  first  lease.   The owner's belief that using the 1974 rent will eliminate or  reduce the  overcharges  is based on the erroneous assumption  that  the owner  could  get  credit for rents it could  have  charged  Beth Israel if it had not given it a discount.  The owner, however, is limited  to  the rents actually charged even if a  higher  amount would have been lawful. The  owner has failed to submit any evidence of any contradictory order having been issued by the CAB. THEREFORE,  in  accordance with the Rent  Stabilization  Law  and Code, it is ORDERED, that this petition be, and the same hereby is, denied and the order of the Administrator be, and the same hereby is affirmed. ISSUED: ELLIOT SANDER                                         Deputy Commissioner