BD 110533 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.:  BD 110533 RO
                                                  
                     
                     JOSE MERCADO,                D.R.O. DOCKET NO.: Q 3121053 R
                                                                     CDR 24,730

                                                  TENANT:  BENJAMIN MILLER
                                PETITIONER
          ----------------------------------X



            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                       IN PART


          On April 3, 1987, the above named petitioner-owner timely refiled 
          a Petition for Administrative Review against an order  issued  on
          October 17, 1986, by the District Rent Administrator, 10 Columbus 
          Circle, New York, New  York,  concerning  housing  accommodations
          known  as  Apartment   2J,   162-21   Powells   Cove   Boulevard,
          Beechhurst, New York, wherein  the  District  Rent  Administrator
          determined that the owner had overcharged the tenant.

          The  issue  in  this  appeal  is  whether   the   District   Rent
          Administrator's order was warranted.

          The applicable sections of the law are Sections 2522.4 and 2526.1 
          of the Rent Stabilization Code and Rent  Guidelines  Board  Order
          Number 8.

          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 commenced on March 23, 1984, by the  tenant's
          filing of a rent overcharge complaint  with  the  New  York  City
          Conciliation and Appeals Board (CAB), the agency formerly charged 
          with enforcing the Rent Stabilization Law.

          In its answer to the tenant's complaint, the  owner  submitted  a
          complete rental history for the subject  apartment  covering  the
          period from March 1, 1966 through April 30, 1986.

          On July 23, 1986, the Division of Housing and  Community  Renewal
          (DHCR) requested from the owner documentation, such  as  receipts
          or  cancelled  checks,  to  substantiate  the  cost  of  the  new
          equipment installed in the subject apartment in 1978.  The  owner
          did not respond to this request.






          BD 110533 RO

          In Order Number CDR 24,730 issued October 17, 1986, the  District
          Rent  Administrator  determined  that   the   tenant   had   been
          overcharged since May 1, 1978, and accordingly directed the owner 
          to refund to the tenant $3,650.50 which included excess  security
          and interest on that portion of the overcharge  occurring  on  or
          after April 1, 1984.

          In this  petition,  the  owner  contends  in  substance  that  no
          overcharge occurred,  that  a  Major  Capital  Improvement  (MCI)
          increase was omitted from the Administrator's  calculations,  and
          that it was entitled  to  collect  an  8%  increase  pursuant  to
          Guidelines 8 for the lease term commencing  from  March  1,  1977
          through August 31, 1978.

          The tenant did not submit a response to the owner's petition.

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

          The CAB, in Opinion Number 3484  (Docket  Number  OM-629)  issued
          June 12, 1975 granted the owner an MCI increase of 1.55%  in  the
          stabilization rent for the subject apartment effective October 5, 
          1973.  A review of the record indicates  that  the  Administrator
          failed to include the above-mentioned increase  when  calculating
          the lawful stabilization rent for the lease term commencing March 
          1, 1974.

          Rent Guidelines Board Order Number 8 provides in  pertinent  part
          that any lease or tenancy for a period over one year  and  up  to
          and including two years shall be deemed a two year  lease  except
          as to leases on vacant apartments.  An examination of the  rental
          history for the subject apartment indicates that the prior tenant 
          entered into an eighteen month renewal lease commencing on  March
          1, 1977 during the term of Rent Guidelines Board Order  Number  8
          which authorized an 8% rent increase for a two year  lease.   The
          Administrator incorrectly considered this lease  term  as  a  one
          year lease and limited the owner to a 6.5% rent increase.

          Based on the foregoing, the  Commissioner  has  recalculated  the
          lawful stabilization rents  and  amounts  of  overcharge  on  the
          amended rent calculation chart attached hereto and  made  a  part
          hereof.

          Because this determination concerns lawful rents only through the 
          date of April 30, 1986 used in the  Administrator's  order  being
          appealed, the owner is cautioned to adjust subsequent rents to an 
          amount no greater than that determined by  this  order  plus  any
          lawful increases, and to register any adjusted  rents  with  this
          Order  and  Opinion  being  given  as  the  explanation  for  the
          adjustment.

          If  the  owner  has  already  complied  with  the  District  Rent
          Administrator's order and there are arrears due to the owner as a 
          result  of  the  instant  determination,  the  tenant  shall   be
          permitted to pay off the arrears  in  twenty-four  equal  monthly
          installments beginning with the first  rent  payment  date  after
          issuance of this order and opinion.   Should  the  tenant  vacate
          after the issuance of this order or have  already  vacated,  said






          BD 110533 RO
          arrears shall be payable immediately.

          This order may, upon the expiration of the period  in  which  the
          owner may institute a proceedi g  pursuant  to  Article  Seventy-
          Eight of the Civil Practice Law and Rules, be filed and  enforced
          as a judgment or not in excess  of  twenty  percent  thereof  per
          month 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
          in part, and that the District Rent Administrator's order be, and 
          the same hereby is, modified in accordance with  this  Order  and
          Opinion.

          The lawful stabilization rents  and  amounts  of  overcharge  are
          established on the attached chart which is fully made a  part  of
          this order.



          ISSUED:



                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
    

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