BD 410331 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 410331 RO
ICC REALTY CORPORATION,
DRO DOCKET NO.: TA 12357
PETITIONER
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On April 3, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
February 27, 1987 by the District Rent Administrator, 10 Columbus
Circle, New York, New York concerning housing accommodations
known as Apartment 10C at 244 West 72nd Street, New York, New
York wherein the Rent Administrator determined that the fair
market rent pursuant to the special fair market rent guideline
promulgated by the New York City Rent Guidelines Board for use in
calculating fair market rent appeals.
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 of a fair
market rent appeal application by the tenant with the New York
City Conciliation and Appeals Board, one of the predecessor
agencies to the Division of Housing and Community Renewal (DHCR).
The tenant took occupancy pursuant to a lease commencing
September 1, 1983 and expiring August 31, 1984 at a monthly rent
of $900.00.
The owner was served with a copy of the application and was
afforded an opportunity to submit rent data for comparable
apartments. In answer to the application, the owner stated that
by notice dated May 7, 1984, the owner was notified of the
tenant's Fair Market Rent Appeal and was afforded an opportunity
to submit June 30, 1974 comparability data. By notice dated June
21, 1984 and September 25, 1986, the owner was afforded an
opportunity to submit post-June 30, 1974 comparability data. The
September 25, 1986 notice advised the owner that proof of service
of an initial legal regulated rent notice (DC-2 Notice) was
required for comparable apartments.
By letter submitted October 14, 1986, the owner requested an
extension of 30 days ro respond until November 14, 1986.
BD 410331 RO
A summary Notice was sent to the owner on November 6, 1986. By
letter submitted November 12, 1986, the owner stated that it was
compiling the data requested in the September 25, 1986 notice and
requested an extension of three weeks from November 16, 1986 to
respond.
By notice dated November 17, 1986, the owner was afforded a Final
extension of 10 days to respond.
By response submitted November 25, 1986, the owner submitted
rental histories for all apartments in the subject C line and
the A line. The rental histories indicated tat only apartments
14C and 5A were rented to a first stabilized tenant within the
period 1 year prior to and one year after the initial renting of
the subject apartment and that the initial rents for those
apartments wee $815.00 and $850.00, respectively. The owner
requested that these two apartments be used in the comparability
study.
By notice dated November 28, 1986, the owner was requested to
submit proof of service of a DC-2 Notice for the comparable
apartments. The notice afforded the owner 10 days to respond and
the notice stated that no extensions of time would be granted.
By letter submitted December 8, 1986, the owner stated that DC-2
notices with proof of service for the comparable apartments were
not available, but that the owner was attempting to obtain copies
of the apartment registration (RR-1) Forms along with proof of
service on the tenants of those apartments from the Rent
Stabilization Association (RSA). The owner stated that it had
been advised by RSA that those documents would be available
promptly. The owner stated that the tenants of the comparable
apartments had failed to file objections to the registration
within 90 days and therefore their initial rents were not subject
to further challenge.
In Order Number CDR 29,182, the District Rent Administrator
adjusted the initial legal regulated rent by establishing a fair
market rent of $450.61 effective September 1, 1983, the
commencement date of the initial rent stabilized lease and
directed a refund to the tenant of excess rent in the amount of
$20,680.48, including excess security. The Administrator stated
that apartments 14C and 5A were similar in size to the subject
apartment and were rented to a first stabilized tenant
contemporaneously with the subject apartment, but that the owner
had failed to submit proof of service of DC-2 notice or RR-1
forms for those apartments. Therefore the fair market rent was
established based on the special fair market rent guideline
alone.
In this petition, the owner contends that by submission dated
February 17, 1986 it submitted to the DHCR copies of apartment
registration forms with proof of service on the tenants of
apartments 14C and 5A, but that the Administrator failed to
utilize the rent for those apartments in determining the
applicant's fair market rent. The owner stated that in February,
1986 it received copies of the RR-1 Forms from RSA and that it
had previously received from RSA proof of service of those forms.
BD 410331 RO
The owner submits with its petition a copy of its submission
dated February 17, 1987 which includes copies of RR-1 forms for
apartments 14C and 5A, an affidavit from Sheldon Factor of RSA
attesting to service of the forms, an RSA mailing list including
the comparable apartments, and an RSA carrier route summary
indicating the number of pieces mailed to the subject building
date stamped by the post office May 29, 1984.
In answer to this petition the tenant asserts that the owner's
failure to submit proof of service of DC-2 Notices or RR-1 Forms
for apartments 14C or 5A properly precluded use of those
apartments in the comparable study; that apartment 5A was
occupied by a family member or business associate of the owner
throughout this period, and is now occupied by the
superintendent; that apartment 14C has, on information and belief
also been occupied by an associate of the owner, that these
apartments therefore should not be considered; and that the
Administrator's order should be affirmed with treble damages.
The Commissioner is of the opinion that this petition should be
denied.
Section 26513 of the Rent Stabilization Law provides, in
pertinent part, that fair market rent adjustment applications are
to be determined by the use of special fair market rent
guidelines orders promulgated by the New York City Rent
Guidelines Board and by the rents generally prevailing in the
same area for substantially similar housing accommodations. In
order to determine rents generally prevailing in the same area
for substantially similar housing accommodations, it is DHCR's
procedure for fair market rent appeal cases filed prior to April
1, 1984 to allow owners to submit June 30, 1974 free market
rental data for complete lines of apartments, beginning with the
subject line. The average of such comparable rentals will then
be updated by annual guidelines increases. Alternatively, DHCR
procedure allows owners to have comparability determined on the
basis of rents charged after June 30, 1974. In order to use this
method, owners were required prior to November 1, 1984 to submit
rental history data for all stabilized apartments in the subject
premises and subsequent to November 1, 1984 to submit such data
for complete lines of apartments beginning with the subject line.
Post-June 30, 1974 rent data will be utilized if the comparable
apartment was rented to a first stabilized tenant within one year
of the renting of the subject apartment and if the owner submits
proof of service of an initial legal regulated rent notice (DC-2
Notice) or apartment registration form indicating that the rent
is not subject to challenge.
The record in this case indicates that the owner was afforded an
adequate opportunity, including extensions of time to submit the
required comparability data. The owner stated in its letter
submitted December 8, 1986 that it was attempting to obtain the
required proof of service of RR-1 forms from the RSA and that
such documents would be available promptly. It is noted that the
owner chose to utilize RSA to serve RR-1 Forms on the tenants and
the owner cannot use the delay in obtaining the documents from
RSA as an excuse for failing to timely comply with the
Administrator's notices. The owner submitted the required
documents by submission dated February 17, 1987, 2 1/2 months
BD 410331 RO
after the final 10 day notice. It is noted that the copy of the
owner's submission dated February 17, 1987 in the Administrator's
file was hand delivered to the DHCR and was date-stamped received
by the DHCR on March 2, 1987, after the issuance of the
Administrator's order. No proof has been submitted by the owner
that this submission on February 27, 1987 was in fact submitted
prior to the issuance of the Administrator's order. The
Commissioner finds that the owner's submission was untimely, that
there was no denial of due process in this case which would
warrant considering the submission on administrative appeal, and
that the Administrator properly determined the fair market rent
utilizing the special fair market rent guideline alone.
Regarding the tenant's request for treble damages, the
Commissioner notes that since the tenant failed to raise this
issue affirmatively by filing a timely petition for
administrative review, the raising of this issue in an answer to
the owner's petition cannot operate as a proper challenge to the
Administrator's order. However, it is noted that treble damages
are not awarded in fair market rent appeal cases (Accord: ART
2020-L and ARL 2023-L).
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be, and the same hereby is, denied
and the District Rent Administrator's order be, and the same
hereby is, affirmed.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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