BA 410349-RO
                        STATE OF NEW YORK
                           GERTZ PLAZA
                     92-31 UNION HALL STREET
                     JAMAICA, NEW YORK 11433
APPEAL OF                               DOCKET NO.:
                                        BA 410349-RO
                                        ADMINISTRATOR'S DOCKET  NO.:
                        PETITIONER      L 3116622-R

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

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

After  careful  consideration  of the  evidence  of  record,  the
Com-missioner  is  of  the opinion that the  petition  should  be

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


                                         Deputy Commissioner

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