BC 110229-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
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.:
BC-110229-RO
BERKLEY GROUP ASSOC.,
RENT ADMINISTRATOR'S
DOCKET NO.:
PETITIONER 25550 Examining Unit
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ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE REVIEW
AND REMANDING PROCEEDING FOR FURTHER PROCESSING
On March 11, 1987 the above-named petitioner-owner, filed a Peti
tion for Administrative Review against an order issued February
6, 1987, by the Rent Administrator, 10 Columbus Circle, New York,
New York concerning the housing accommodation, known as Apartment
B-25, at 35-24 78th Street, Jackson Heights, New York, New York.
The Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion of the record con-
cerning the issues raised in the administrative appeal.
The tenant commenced this proceeding on August 24, 1984 by filing
a timely objection to the apartment registration, challenging,
inter alia the Fair Market Rent. The tenant also filed an appli-
cation challenging the initial legal regulated rent to which the
tenant attached a rent history of the subject apartment.
A copy of the objection was served on the owner on April 21,
1986. On June 11, 1986, a copy of the tenant's application
challenging the initial legal regulated rent was sent to the
owner along with a request for all leases since June 30, 1974, or
from the date the apartment was decontrolled. The owner was also
advised of the procedure used in determining a fair market rent
and of the options available to the owner to provide compara-
bility data and was afforded the opportunity to submit
appropriate documentation to be used in the determination.
In response, the owner stated in pertinent part, that the tenant
was the first tenant after a vacancy decontrol but that it did
not know if the former owner had served a DC-2 notice. The owner
submitted leases commencing May 1, 1978 and terminating April 30,
1988, a copy of the Maximum Base Rent Building Profile, effective
January 1, 1972 and a 1974 building rent roll.
In reply, the tenant stated that the rent roll indicated that
rent for a similar apartment was lower than the rent she had been
charged.
BC 110229-RO
In the order issued on February 6, 1987, the Administrator ad-
justed the legal regulated rent and directed the owner to roll
back the rent and to refund excess rent amounting to $3,511.83.
In the appeal, the owner contends that the Administrator's order
should be revoked because the tenant's complaint should have been
dismissed for failing to state a cause of action in that the
tenant had not met the minimal pleading requirements of the Code,
as clarified in form DC-2A "Notice to Rent Stabilized Tenant of
Right to File a Fair Market Appeal." In the alternative, the
owner argues that the Administrator failed to follow its standard
procedures of permitting the owner to submit comparability evi-
dence, thus violating the petitioner's due process of law.
In opposition to the appeal, the tenant contends in substance
that the order should be upheld. Having known the previous
tenant, she was aware of the apartment's rent controlled status
and rent; the rent history shows that she was overcharged; the
notice of right to file a Fair Market Appeal was promulgated
after she filed her application and is inapplicable; and her
allegations were fully supported by her submission of a rent
history to the DHCR.
The Commissioner is of the opinion that this petition should be
granted to the extent of remanding the proceeding.
Section 26-513 of the Rent Stabilization Law provides in perti-
nent part that the tenant of a housing accommodation that was
regulated pursuant to the City Rent and Rehabilitation Law prior
to July 1, 1971 and that became vacant on or after January 1,
1974 may file with the Commissioner an application for adjust-
ment of the initial legal regulated rent for such housing
accommodation. Code Section 2522.3(c) provides that such appeal
shall be dismissed where:
1. the initial legal registered rent does not
exceed t e maximum rent as calculated pur-
suant to the City Rent Law plus appropriate
permissible guidelines allowances or,
2. the appeal is filed more than 90 days after
the certified mailing to the tenant of the
Initial Apartment Registration.
The aforementioned provide a jurisdictional threshold and are the
sole provisions for a dismissal of a fair market rent appeal in
the Code.
In the instant case, the tenant's applicati n met the require-
ments of Section 2522.3(c)(1) and (2). Accordingly, the Adminis
trator properly found that the statutory criteria for processing
a Fair Market Rent Appeal had been met. With respect to the
petitioner's contention that the appeal warranted dismissal
because the tenant had failed to meet minimal pleading require-
ments, the Commissioner notes that, in a Fair Market Rent Appli-
BC 110229-RO
cation a tenant need only allege the belief that his or her rent
exceeds the fair market value. Moreover, the tenant did affix to
the application a copy of the rent history which was the basis of
the challenge to the initial rent. The Commissioner finds this
sufficient to meet the minimal requirements of Code Section
2522.3(b).
With respect to the petitioner's alternative argumen , the evi-
dence of record reveals that DHCR form RTP-22 (August 1985) was
sent to the owner on June 11, 1986. By this form, the owner was
advised that the fair market rent would e determined by aver-
aging:
1. the maximum rent for the subject unit plus
special guidelines order and,
2. the result of a comparability study. The
comparability study would be based on rental
data submitted by the owner for the period
July 1, 1971 through June 30, 1974 or the
period after July 1, 1974.
The owner was further advised that if no comparability date was
submitted, the fair market rent would be determined solely on the
basis of appropriate Fair Market Rent Guidelines. The owner did
not respond to this form. Accordingly, the Commissioner finds
that the petitioner was not deprived of due process rights.
However, pursuant to Sections 2522.3(e) and (f) of the Rent
Stabilization Code effective May 1, 1987, for Fair Market Rent
Appeals filed after April , 1984, comparability will be de-
termined based on the following:
(e) (1) Legal regulated rents, for which the time to
file a Fair Market Rent Appeal has expired and no
Fair Market Rent Appeal is then pending, or the
Fair Market Rent Appe l has been finally deter-
mined, charged pursuant to a lease commencing
within a four year period prior to, or a one year
period subsequent to, the commencement date of the
initial lease for the housing accommodation
involved; and
(2) At the owner's option, market rents in effect
for other comparable housing accommodations on the
date of the initial lease for the housi g accommo-
dation involved as submitted by the owner.
(f) Where the rents of t e comparable housing accommoda-
tions being considered are legal regulated rents,
for which the time to file a Fair Market Rent Appeal
has expired, and such rents are charged pursuant to a
lease ending more than one year prior to the commence-
BC 110229-RO
ment date of the initial lease for the subject housing
accommodation, such rents shall be updated by guide-
line increases for one year renewal leases, commencing
with the expiration of the initial lease for the com-
parable housing accommodation to a date within twelve
months prior to the renting of t e housing accommoda-
tion involved.
The record indicates that the owner was not afforded an oppor-
tunity to submit comparability data pursuant to the requirements
of the current Rent Stabilization Code. Therefor , the Commis-
sioner finds that the proceeding should be remanded to the
Administrator for further processing to afford the owner an
opportunity to submit comparability data pursuant to the re-
quirements of the Rent Stabilization Code effective May 1, 1987.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be, and the same hereby is, granted
in part and the proceeding be, and the same hereby is, remanded
to the Rent Administrator for further processing in accordance
with this order and opinion. The automatic stay of so much of
this Administrator's order as directed a refund is hereby con-
tinued 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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