ADM. REVIEW DOCKET NO.: BC 110223 RT



                                  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.:               
                                                 BC 110223 RT 
                                              :
                                                 DRO DOCKET NO.:           
                                                 35571                      
             SIDNEY AND ANNETTE FENSTER,
                                             
                                                  

                              PETITIONERS      : 
          ------------------------------------X                             

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW


               On March 23, 1987, the above-named petitioner-tenants  filed
          a Petition for Administrative Review against an order  issued  on
          February 25, 1987 by the Rent Administrator, concerning   housing
          accommodations known as Apartment 4D, 162-01 Powells  Cove  Road,
          Whitestone, New York, wherein the Rent Administrator  determined,
          among other things, that no overcharge existed. 

               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.  

               The issue under appeal is whether the Administrator's  order
          was warranted.

               This proceeding was commenced on October  4,  1984,  by  the
          filing of a tenant's objection to the 1984 registration,  wherein
          the tenant objected, among other things, that the rent being paid 
          was an overcharge, and that only  one  month's  security,  rather
          than two, could be charged.  The tenants took occupancy  on  July
          1, 1972 pursuant to a lease commencing July 1, 1972 and  expiring
          on June 30, 1975, at a monthly rental of $425.




               A copy of the tenants' objection  to  the  registration  was
          sent to the owner on October 15, 1986. In its response, the owner 
          submitted the tenants' initial lease and all subsequent leases, 
          along with the rental history.  On the renewal  lease  commencing
          July 1, 1986 the two-month security deposit had been crossed  out
          and replaced with a deposit requirement equivalent to one month's 
          rent; this revision was initialed by the owner.  A  copy  of  the
          owner's response was sent to the  tenant.   The  tenant  did  not






          ADM. REVIEW DOCKET NO.: BC 110223 RT
          respond. 

               By order dated February 25, 1987, under  Docket  No.  35571,
          the Administrator found, among other things, that  no  overcharge
          existed, that the apartment became subject to rent  stabilization
          on July 1, 1974, and that the owner was  permitted  to  retain  a
          security deposit equivalent to two months' rent. 

               In their petition for  administrative  review,  the  tenants
          contend  that  their  current  lease  provides  for  one  month's
          security.  They enclose a letter dated May 1, 1986 from the owner 
          stating that they will be receiving a check for the overcharge on 
          their security.   

               In response to the petition, the owner alleges, among  other
          things, that the complaint should be dismissed since it was found 
          that the owner was allowed to retain two months' security. 

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

               Section 2525.4 of the Rent  Stabilization  Code  states,  in
          pertinent part, that no owner shall  demand  a  security  deposit
          which exceeds the rent for one month,  "provided,  however,  that
          where a greater security  deposit  was  paid  by  the  tenant  in
          continuous occupancy since the  date  the  housing  accommodation
          became subject to the Rent Stabilization Law,  such  deposit  may
          continue in effect during the term of such lease and any renewals 
          thereof with the same tenant." 

               The Commissioner finds that the owner,  in  accordance  with
          the above statute, was entitled  to  retain  a  security  deposit
          equivalent  to  two  months'  rent  from  the  inception  of  the
          petitioners' tenancy through the lease period expiring  June  30,
          1986.   However,  by  reducing  the  required  security   deposit
          effective with the lease  commencing  July  1,  1986,  the  owner
          relinquished its right to retain a  security  deposit  equivalent
          to two months' rent.  The  Administrator  neglected  to  consider
          this waiver by the owner of its  right  to  require  a  two-month
          security deposit.  


               Accordingly, the total overcharge is one  month's  rent,  or
          $664.05.

               The owner is directed to  refund  such  sum  to  the  tenant
          immediately.  Should the owner fail to do so, not  in  excess  of
          twenty percent thereof per month of the amount owed by the  owner
          may be offset against any rent thereafter due the owner. 

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

               ORDERED, that this petition be,  and  the  same  hereby  is,
          granted, and that the Rent Administrator's order be, and the same 
          hereby is, modified pursuant to this order and opinion.

          ISSUED:







          ADM. REVIEW DOCKET NO.: BC 110223 RT







                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner




                                                    

    

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