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

          APPEAL OF                              DOCKET NO. BC 510313 RO
                                              :  DRO DOCKET NO. ZU-4267-R

                                PETITIONER    : 

               On March 17, 1987, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          February 10, 1987, by the Rent Administrator, Gertz Plaza, Jamaica, 
          New York, concerning the housing accommodations known as 247 
          Wadsworth Avenue, New York, New York, Apartment No. 2J, wherein the 
          Rent Administrator determined the fair market rent 
          pursuant to an apartment comparability study and the special fair 
          market rent guideline promulgated by the New York City Rent 
          Guidelines Board for use in calculating fair market rent appeals.  
          On May 22, 1987, an Order and Opinion Dismissing the Petition was 
          issued on the basis that the petition was not timely filed.  ON 
          July 22, 1987, an Order and Opinion Reopening the Proceeding was 
          issued on the basis that the petition had, in fact, been timely 

          The Administrative Appeal is being determined pursuant to the 
          provisions of Sections 2522.3 and 2526.1 of the Rent Stabilization 

          The issue herein is whether the Rent Administrator's order 
          was warranted.

          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.  

          This proceeding was originally commenced on October 10, 1985 
          by the filing of a rent overcharge complaint in which the tenant 
          questioned the fair market rent of the subject apartment.  The 
          owner was served with a copy of the tenant's complaint and 
          afforded an opportunity to submit rental data for comparable 
          apartments.  In response the owner submitted rental data for 
          several comparable apartments and indicated it first purchased the 
          subject premises on July 17, 1985.

          BC 510313 RO

          In Order Number ZU-4267-R, the Rent Administrator determined 
          the fair market rent of the subject apartment to be $374.43  
          effective February 1, 1985, the date of commencement of the 
          initial rent stabilized lease and found excess rent paid of 
          $3765.25 from February 1, 1985 through January 31, 1987.

          In this petition, the owner contends in substance that the 
          amount of excess rent owed to the tenant should have been 
          apportioned between the owner and prior owner and that in addition 
          to the comparability data submitted by the owner, the 
          Administrator was required to consider rents generally prevailing 
          in the same area for substantially similar housing accommodations 
          in determining the fair market rent.

          In answer to this petition, the tenant stated in substance 
          that the Rent Administrator's order was warranted.

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

          Section 2526.1 of the Rent Stabilization Code provides in 
          pertinent part that for overcharge complaints filed or overcharges 
          collected on or after April 1, 1984, a current owner shall be 
          responsible for all overcharge penalties including penalties based 
          upon overcharges collected by any prior owner but that such 
          provisions shall not apply to fair market rent appeals.  In 
          proceedings involving fair market rent appeals, where there has 
          been a transfer of ownership of a building, the policy of the 
          Conciliation and Appeals Board (the agency formerly charged with 
          enforcing the Rent Stabilization Law) adopted by the Division of 
          HOusing and Community Renewal provides that the obligation of a 
          new owner to refund excess rent is limited to such excess rent 
          collected by it and may not be extended to excess rent collected 
          by the prior owner in the absence of evidence of any collusion or 
          relationship between the new owner and prior owner.  The 
          distinction between a fair market rent appeal and an overcharge 
          proceeding has been made because a fair market rent appeal 
          involves a tenant challenging the initial stabilized rent of an 
          apartment which has been decontrolled from the Rent Control Law.  
          If the tenant does not challenge such initial stabilized rent 
          within the required period, it becomes the initial legal regulated 
          rent upon which all future rent increases must be based.  If the 
          tenant does timely challenge the initial rent, a determination may 
          be made that the tenant's rent exceeds the fair market rent for 
          the apartment.  Such determination would result in a rent 
          adjustment and refund of excess rent to the tenant but is not 
          considered a rent overcharge within the intent and meaning of 
          Section 2526.1.

          Based on the foregoing, the owner herein is responsible only 
          for the excess rent it actually collected - excess rent from 
          August 1, 1985 onwards - since there is no evidence of any 
          collusion or relationship between the owner and any prior owner.  

          BC 510313 RO

          The total excess rent including excess security from August 1, 
          1985 through January 31, 1987 amounts to $2860.83.

          The Commissioner notes that the prior owner was not served 
          with a copy of the tenant's fair market rent appeal nor afforded 
          an opportunity to file an answer to such appeal.  This order is 
          issued without prejudice to the tenant's right, if any, to proceed 
          against the prior owner.

          With regard to the owner's contention that the Administrator 
          was required to consider rents generally prevailing in the same 
          area for substantially similar housing accommodations in 
          determining the fair market rent, the Commissioner notes that 
          pursuant to Section 2522.3(e) and (f) of the Rent Stabilization 
          Code, it is the owner's responsibility to provide the 
          comparability data for use in determining the fair market rent.  
          In this case, the owner was given an opportunity to submit and in 
          fact did submit usable comparability data. The Rent Administrator 
          properly used such data in determining the fair market rent of the 
          subject apartment.

          If the owner has already complied with the Administrator's 
          order and there are arrears due to the owner as a result of the 
          instant determination, the tenant is permitted to pay off the 
          arrears in twelve equal monthly installments.  Should the tenant 
          vacate after issuance of this order or already have vacated, said 
          arrears shall be payable immediately.

          If the owner does not take appropriate action to comply 
          within 60 days from the date of this order, the tenant may credit 
          the excess rent against the next month(s) rent until fully offset.

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

          ORDERED, that this petition for administrative review be, and 
          the same hereby is, granted in part, and, that the order of the 
          Rent Administrator be, and the same hereby is, modified to show 
          that the owner herein owes excess rent to the tenant only from the 
          time it began collecting rent for the subject apartment - August 
          1, 1985.  The total amount of the excess rent from August 1, 1985 
          through January 31, 1987 is $2860.83.


                                          ELLIOT SANDER
                                          Deputy Commissioner

                                COVERING MEMORANDUM

          ARB Docket No.: BC 510313 RO

          DRO Docket No/Order No.: ZU-4267-R

          Tenant(s): Rubby Villadiego

          Owner: Francis Greenberger

          Code Section: 2522.3 and 2526.1 of RSC

          Premises: 247 Wadsworth Avenue, New York, New York, Apt. 2J

          Order and Opinion Granting Petition in Part                        

          Petition granted in part to apportion excess rent paid 

          between owner and prior owner.  However Administrator's 
          determination of fair market rent was correct.


          Processing Attorney:                                             

          Supervising Attorney:                                            


          Deputy Commissioner:                                             

          Mailed copies of Order and Determination to:


            Tenant's Atty             
            Owner's Atty              

            Date:              :  by               





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