Docket Number: BC 520014-RO
                                 STATE OF NEW YORK
                           OFFICE OF RENT ADMINISTRATION
                                    GERTZ PLAZA
                              92-31 UNION HALL STREET
                              JAMAICA, NEW YORK 11433

        APPEAL OF                              DOCKET NO.: BC 520014-RO 
                                               DOCKET NO.: BC 520014-RP  
                              PETITIONER    : 

        On May 5, 1987, the above-named petitioner-owner  filed  a  Petition
        for Administrative Review against an order issued on April 3,  1987,
        by then Director, MBR  Unit  at  Gertz  Plaza,  Jamaica,  New  York,
        concerning the housing accommodation known  as  64-67  Park  Terrace
        West, New York, New York, wherein the Director revoked  the  Maximum
        Base Rent (MBR) adjustments for the 1984-85  cycle  permitted  under
        the interim order issued on September 25, 1985 under DRO Docket 
        No. 6M-2083.

        The petitioner requests that the determination be  reversed  on  the
        grounds that it was denied due process,  as  more  fully  set  forth
        below, and asserts that the owner did remove the required percentage 
        of violations to qualify for eligibility for the MBR adjustments for 
        the subject premises.

        The administrative appeal process, in connection with  Maximum  Base
        Rent (MBR) proceedings is a two-step process.  The initial  step  in
        the MBR appeal process is a challenge which is filed and  considered
        by the Rent Office Unit.  The Administrator's  order  deciding  such
        challenge can be appealed to the Commissioner by PAR  by  the  party
        adversely affected by the challenge determination.

        The record below revealed that on  November  19,  1985,  the  tenant
        filed a  challenge  to  the  MBR  order  of  eligibility  issued  on
        September 25, 1985 under Docket No. 6M-2083.

        On April 18, 1986, the Administrator issued a notice  of  proceeding
        to modify or revoke the order of eligibility, on the grounds that  a
        review of the records in file revealed that the owner had failed  to
        remove the required number of violations.

        On May 12, 1986, the owner's new managing agent,  advising  that  it
        had just received a copy of  the  April  18,  1986  from  the  prior
        managing agent, requested an extension of time to answer the notice, 
        as well as to obtain copies of  the  records  used  to  support  the
        claim, since the documents had not been made available by the  prior
        managing agent.  A further extension was granted pursuant to  a  sub
        sequent request by the  new  managing  agent,  by  their  attorneys,
        dated July 10, 1986.   On  September  25,  1986,  the  Administrator
        issued an order under Docket No. UC-0036-BC, addressed to the  prior
        managing agent, revoking the September 25, 1986 order  under  Docket
        No. 6M 2083, on the grounds that the owner had failed to submit  the

          Docket Number: BC 520014-RO

        prescribed violation  certification  request  for  the  1984-85  MBR
        increases.  A subsequent order was issued October  1,  1986  to  the
        same effect, to the new managing agent,  care  of  their  attorneys,
        correcting and superseding the September 25, 1986 order.

        On November 5, 1986, the petitioner filed an  administrative  appeal
        arguing  that  the  Administrator's  notice,  reopening  the   prior
        proceeding, mailed to the  prior  rather  than  the  current  agent,
        failed to make the record available for inspection and deprived  the
        owner of the opportunity to present a defense.  On February 27, 1987 
        the Commissioner, under PAR Docket  No.  AJ-520576-RO,  granted  the
        owner's petition to the extent of remanding the proceedings  to  the
        Administrator to  afford  the  owner  an  opportunity  to  submit  a

        On March 12, 1987, the Administrator, under DRO Docket No. 
        BC-520014-RP, notified the parties pursuant  to  the  Commissioner's
        remand order, to make an appointment to review the  records  and  to
        submit written evidence to support any claim, within 10 days of  the
        date of the notice.  The record shows  that  the  owner's  attorneys
        reviewed the record on March 19, 1987.

        On April 3, 1987, the Administrator issued the order,  herein  under
        appeal, affirming the October 1, 1986 ord r  under  Docket  No.  UC-
        0036-BC, which revoked the interim order finding the owner  eligible
        for interim MBR increases for the 1984-85 cycle, for failure to meet 
        the violation certification requirements necessary  to  qualify  for
        permanent MBR increases.

        The petitioner challenges the Administrator's determination  arguing
        that the owner was deprived of a meaningful opportunity  to  answer,
        in that only fifteen days had expired  from  the  date  the  owner's
        attorney had inspected the document in file so that an answer  could
        be submitted.   The  petitioner  also  contends  that  the  Division
        normally allows parties twenty (20) days in which  to  answer  in  a
        proceeding, and that  the  March  12,  1987  order,  permitting  the
        parties only ten (10) days to inspect the file and submit an answer, 
        was arbitrary and capricious.

        In addition, the petitioner attempts  to  demonstrate  that  it  had
        achieved the 80% removal rate for the non-rent impairing violations. 
        Noting that the MBR Unit had  determined  that  all  rent  impairing
        violations and 70% of the  non-rent  impairing  violation  had  been
        corrected, the petitioner argues that the owner had removed two  (2)


          Docket Number: BC 520014-RO

        of the remaining four (4) violations to  achieve  the  required  80%
        rate.  It submits, in rebuttal to  the  1984  MBR  list  of  pending
        violations not deemed removed,  letters  from  the  former  managing
        agent dated between July 20, 1984 and August 26, 1985, to the Office 
        of Code Enforcement, arguing that the enumerated violations had been 
        corrected, were no longer in existence, or should  had  been  deemed
        waived as tenant-induced and not within the owner's power to remedy. 
        In this connection, the petitioner also submits that the  owner  was
        deprived of  the  opportunity  at  MBR  to  cross-examine  the  Code
        Enforcement inspector and to rebut the  findings,  or  to  establish
        that the violation had been removed or should have been waived.

        After careful consideration the Commissioner is of the opinion  that
        the petition should be denied.

        The petitioner's suggestions that the proceedings denied  the  owner
        due process have no substance.  Conceding that  the  Administrator's
        March 12, 1987 notice of proceeding to modify or revoke afforded the 
        tenant ten (10) days to make an appointment to  review  the  records
        and to submit written evidence to  support  this  claim,  the  owner
        failed to do so prior to the April 3, 1987 order, i.e., issued after 
        more than the twenty (20) days the owner characterizes as the normal 
        period the Division allows any party in which to  answer  a  proceed
        ing.  In light thereof, the petitioner's attempt to extract separate 
        periods to investigate the claim and to submit an answer,  in  order
        to make it appear that it was denied adequate  time  to  present  an
        answer, must be rejected.

        A review of the record also reveals that the owner was  aware  prior
        to May 12, 1986 that the Administrator intended to revoke t e  1984-
        1985 MBR eligibility order based on the owner's failure  to  achieve
        the 80% violation removal required under  the  MBR  regulations  for
        approval.  The  petitioner's  complaint  of  not  having  access  to
        records fails  to  acknowledge  that  the  reports  of  the  on-site
        inspection of the property were available to the owner at the Office 
        of Code Enforcement.

        Nor does the owner  establish  on  appeal,  certification  from  the
        Office of Code Enforcement that the violations  were  corrected,  or
        were removed based on determination that they were imposed in error, 
        or deemed waived as tenant induced.   The  letters  from  the  prior
        management agent to the Office  of  Code  Enforcement  noted  above,
        contrary to the petitioner's argument, are insufficient to establish 
        that the owner achieved the 80% violation removal rate  required  to
        qualify for MBR eligibility.

        With regard to the petitioner's argument that the owner should  have
        been permitted to cross-examine the Code  Enforcement  inspector  in
        the MBR proceedings, the Commissioner is of the opinion that request 
        to rebut the said inspector's findings should properly  be  directed
        to the Office of Code Enforcement, which rendered those findings.


          Docket Number: BC 520014-RO

        The Commissioner further rejects the owner's argument  that  because
        the 10-day notice only  proposed  to  modify  or  revoke  the  prior
        notification order, but not to affirm; the  Division  was  precluded
        from affirming the order.  The Commissioner finds  this  proposition
        to be devoid of reason.  The petitioner would have the  Commissioner
        achieve a result contrary to both the law and  facts  in  the  case.
        To further illustrate the  petitioner's  fallacious  reasoning,  the
        Administrator would have been precluded  from  affirming  the  prior
        order had the owner not submitted any response.   Additionally,  the
        notice worked no prejudice to  the  owner's  attempts  to  establish
        facts and argument in support of the claim.  In  fact,  the  petitio
        ners vigorous arguments illustrate that the owner was aware that the 
        prior revocation order would be  affirmed  unless  the  owner  estab
        lished the 80% violation removal rate.  Having failed to do so,  the
        petitioner would  nevertheless  have  the  Administrator  achieve  a
        contrary result.  
        THEREFORE, in accordance with the provisions of the Rent &  Eviction
        Regulations, the Rent Stabilization Law and Code, Chapter 403 of the 
        Laws of 1984, and Chapter 102 of the Laws of 1984, it is

        ORDERED, that the owner's  petition  be  and  the  same  hereby  is,
        denied, and the Administrator's order be, and  the  same  hereby  is
        affirmed, as provided above.


                                        ELLIOT SANDER
                                        Deputy Commissioner


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