BD 410288 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




          ----------------------------------X
          IN THE MATTER OF THE ADMINISTRATIVE
          APPEAL OF                               ADMINISTRATIVE REVIEW
                                                  DOCKET NO.:  BD 410288-RO
                  GRANDMA-PA REALTY,
                                                  DRO DOCKET NOS.: L-3115139-R
                                                                   CDR  29,397
                                                  TENANTS:  CATHY WEINER AND
                                  PETITIONER                EUGENE NASAREWSKY
          ----------------------------------X

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
                                          

          On April 15,  1987  the  above  named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          March 11, 1987 by the District Rent Administrator,   10  Columbus
          Circle, New York,  New  York  concerning  housing  accommodations
          known as Apartment 3A at 353 West  44th  Street,  New  York,  New
          York wherein the District Rent Administrator determined that  the
          owner had overcharged the tenant.

          The Commissioner notes that this proceeding was  filed  prior  to
          April 1, 1984.  Sections 2526.1(a)(4) and 2521.1(d) of  the  Rent
          Stabilization  Code  (effective  May  1,  1987)  governing   rent
          overcharge  and  fair  market  rent  proceedings   provide   that
          determination of these matters be based  upon  the  law  or  code
          provision  in  effect  on  March  31,  1984.   Therefore,  unless
          otherwise  indicated,  reference  to   Sections   of   the   Rent
          Stabilization Code (Code) contained herein are  to  the  Code  in
          effect on April 30, 1987.

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

          The applicable sections of the Law  are  Section  26-516  of  the
          Rent Stabilization Law, Section 2526.1(a)  of  the  current  Rent
          Stabilization  Code,  and  Section  42A  of   the   former   Rent
          Stabilization Code.

          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 by the filing in  March,
          1984 of a rent overcharge complaint by the tenants, in which they 
          stated that they had commenced occupancy on September 10, 1982 at 
          a rent of $650.00 per month.

          The owner was served  with  a  copy  of  the  complaint  and  was






          BD 410288 RO
          requested to submit rent records to prove the lawfulness  of  the
          rent being charged.   In  answer  to  the  complaint,  the  owner
          submitted leases from December  1,  1979,  stating  that  it  had
          received no earlier leases upon acquiring the subject premises in 
          1981, contending that the subject apartment had  previously  been
          rent-controlled, and contending that only  lawful  increases  had
          been taken above the initial rent.  The owner also mentioned that 
          a rent increase had been granted for a new boiler as of September 
          10, 1985, but the owner neglected to fill in the docket number.

          On October 14, 1986 the owner was sent a Final Notice of  Pending
          Default, which stated in substance that unless rent records  from
          the base date (which base date must be proven if  claimed  to  be
          after June 30, 1974)  were  submitted  within  20  days,  certain
          Division of Housing and Community Renewal (DHCR) procedures would 
          be used to establish the lawful stabilized rent.  In  a  response
          dated November 14, 1986 the owner contended  in  substance  that,
          pursuant to  several  stipulations  of  settlement  entered  into
          between the owner and prior tenant in open court  in  non-payment
          proceedings, the legal regulated rent for the  subject  apartment
          was established at $597.40  in  1982;  that  the  owner  was  not
          required to document the rental history of the apartment prior to 
          the date of the stipulations; that in a similar case (A L  06334-
          L/ART 06550-L) the Commissioner upheld the rent established by  a
          Stipulation of Settlement in a non-payment proceeding; that there 
          had been no overcharge  above  the  $597.40  rent  of  the  prior
          tenant; and that  the  complainants  never  challenged  the  1984
          registration.  With its response the owner enclosed "So  Ordered"
          stipulations dated February 18, 1982 and July 7, 1982 wherein the 
          prior tenant agreed to pay 3 and 4 months respectively of rent at 
          $597.40 per month  which  he  had  been  withholding  because  of
          alleged service decreases.  It appears  that  at  least  one  and
          possibly both of the copies of this response from the  owner  did
          not  make  it  into  the  file  of  the  proceeding  before   the
          Administrator until after the  order  was  issued;  however,  the
          owner makes similar contentions in  its  petition,  so  they  are
          considered herein.



          In  an  order  issued  on  March  11,  1987  the  District   Rent
          Administrator,  using  established   DHCR   default   calculation
          procedures and disallowing an increase for new  equipment,  found
          an overcharge of $4,305.40 as of March 31, 1987, and directed the 
          owner to refund such overcharge to  the  tenant  as  well  as  to
          reduce the rent.

          In this petition, the  owner  makes  the  same  contentions,  and
          submits the same documents, as in its November 14, 1986 response, 
          and in addition submits a  copy  of  an  order  granting  a  rent
          increase for a new gas burner and boiler.

          In answer, one tenant asserts in substance that they filed  their
          complaint in March, 1984, at the same time that the apartment was 
          registered; that failure of the prior  owner  to  furnish  leases
          does not entitle the owner to charge any rent it wishes; and that 
          the rent purportedly established in settlement of  a  non-payment
          proceeding of a prior tenant was not done by reference to a  full
          rental history.






          BD 410288 RO

          The Commissioner is of the opinion that this petition  should  be
          denied.

          Section 42A of the former Rent Stabilization Code  requires  that
          an  owner  retain  complete  rent  records  for  each  stabilized
          apartment in effect from June 30, 1974 to date and  produce  them
          to the DHCR upon demand.  If the apartment was decontrolled  from
          the Rent Control Law after June 30, 1974 the owner  must  provide
          satisfactory documentary evidence  of  the  apartment's  date  of
          decontrol, and produce a rental history from that date.   In  the
          present case the owner furnished a rental history only from 1979, 
          so the Administrator was  warranted  in  using  established  DHCR
          procedures  to  set   the   lawful   stabilization   rent.    The
          stipulations  involving  the  prior  tenant  do  not  affect  the
          determination of the rent.  The (prior) tenant consented  to  pay
          the rent due under the lease, which rent he had been  withholding
          because of  repairs  he  claimed  were  needed.   The  judge,  in
          approving the stipulations, was not seeking to inquire  into  the
          lawful rent, but simply enforcing the  contract  for  payment  of
          rent.  This situation is different from ARL 06334-L/ART  06590-L,
          cited by the owner.  In that case the tenant himself had signed a 
          stipulation, executed by the parties in  the  presence  of  their
          attorneys and So Ordered by a judge, in a non-payment proceeding. 
          Among other things that tenant waived any right to appeal to  the
          [DHCR  predecessor]  Conciliation  and  Appeals  Board.   In  the
          present case the complainant did not enter into a stipulation not 
          to file  a  complaint,  and  in  fact  did  not  enter  into  any
          stipulation  at  all.   The   prior   tenant   did   enter   into
          stipulations, but they were just stipulations to  pay  the  lease
          rent.  The  judge  in  those  stipulations  did  not  purport  to
          inquire into the lawfulness of the lease rent.

          Regarding the owner's contention that the tenants did not  object
          to the 1984 registration, the Commissioner notes that the tenants 
          did not have to do so, since the former Rent  Stabilization  Code
          applies in this proceeding initiated prior to April 1, 1984.  See 
          Lavanant v. DHCR, 148 A.D.2d 185, 544 N.Y.S. 2d  331  (App.  Div.
          1st Dept. 1989).  While it may be  true  that  the  Administrator
          should have allowed an increase for a Major  Capital  Improvement
          (MCI), correct use of  the  default  procedure  would  also  have
          involved the disallowance of any Guidelines or vacancy  increases
          for  any  leases  commencing   prior   to   the   time   of   the
          Administrator's order.  This would more than negate  any  benefit
          to the owner that would result from consideration of its argument 
          (aside from its above-dismissed point  about  stipulations)  that
          the lawful rents were improperly arrived at.  As such, and in the 
          absence of a timely petition for  administrative  review  by  the
          tenant, the Commissioner finds that the owner's  appeal  on  this
          issue should be denied.  

          Because of the  possibility  that  the  rents  charged  were  not
          reduced after the Administrator's order, the owner  is  cautioned
          to adjust the rent, in  leases  after  those  considered  by  the
          Administrator, to amounts no greater than that determined by  the
          Administrator's order plus any lawful increases, and to  register
          any adjusted rents with the Administrator's order being given  as
          the reason for the adjustment.  Because the tenants have vacated, 
          a copy of this determination is being mail d  to  the  tenant-in-






          BD 410288 RO
          occupancy.

          This order  awarding  overcharges  of  $4,305.40  may,  upon  the
          expiration of the period in  which  the  owner  may  institute  a
          proceeding  pursuant  to  Article  Seventy-Eight  of  the   Civil
          Practice Law and Rules, be filed and enforced by the  tenants  in
          the same manner as a judgment.

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

          ORDERED, that this petition be, and the same  hereby  is,  denied
          and that the District Rent Administrator's order be, and the same 
          hereby is, affirmed.  The lawful stabilization  rent  is  $659.92
          per month in the lease commencing September 10, 1985.


          ISSUED:
                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
                                          
    

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