BC 110229-RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                               DOCKET NO.:   
                 BERKLEY                   GROUP                    ASSOC.,
                                                  RENT ADMINISTRATOR'S
                                                  DOCKET NO.:
                                  PETITIONER      25550 Examining Unit


          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 

          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

          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-

               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


                                                ELLIOT SANDER
                                                Deputy Commissioner


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