ADM. REVIEW DOCKET NO.: BE 410268 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 :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO.:  BE  410268  RO
                                                 D.R.O. ORDER NO.:       
                                              :  CDR # 30060             
                                                 D.R.O.     DOCKET      NO.:
             BERGER   AND    BERGER                      L    3115025    R/T
             (BY    SOL    BERGER)                        Other     Parties:
                                                 Thomas Dennis and
                                 PETITIONER   :  Theresa McNamara, Tenants
          ------------------------------------X 

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
            IN PART

               On May 26, 1987, the above named petitioner-prior-owner filed 
          a Petition for Administrative Review against an  order  issued  on
          April 23, 1987, by the Rent Administrator at 10  Columbus  Circle,
          New York, New York, concerning  housing  accommodations  known  as
          Apartment No. 37 at 102 West 80th  Street,  New  York,  New  York,
          wherein the Administrator determined the fair market rent for  the
          subject accommodation and directed the  petitioner-prior-owner  to
          refund any excess rent collected by it. 

               The Commissioner notes that  this  proceeding  was  initiated
          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
          provisions  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 Commissioner has reviewed all  of  the  evidence  in  the
          record and has carefully considered that portion of  the  evidence
          relevant to the issues raised in the administrative appeal.

               This proceeding was  originally  commenced  on  February  14,
          1984, by the filing of a Fair Market Rent Appeal (FMRA)  with  the
          New York City Conciliation and  Appeals  Board  (CAB,  the  agency
          formerly charged with enforcing the Rent Stabilization Law) by the 
          tenants. 

               The petitioner-prior-owner submitted evidence  of  comparable
          rents.  



               On the chart attached to and made a part of the order,  based
          on the documentation submitted by  the  owner,  the  Administrator






          ADM. REVIEW DOCKET NO.: BE 410268 RO
          determined the fair market rent for the subject accommodation  and
          the excess rent collected.  The Administrator determined that  the
          legal regulated rent under the tenants' July 1, 1985 through  June
          30,1987 renewal lease was $342.24.   This  lease  provided  for  a
          rental of $404.71.  On the chart, for  the  period  July  1,  1985
          through September 30, 1985,  the  Administrator  stated  that  the
          monthly excess rent collected was the difference  between  $404.71
          and $342.24, that is  $62.47.   The  next  section  of  the  chart
          reflects a reduction in the rent collected to $300.00 from October 
          1, 1985 through  June  30,  1986.   For  that  period,  the  chart
          indicates that the legal regulated rent was $300.00 and the  chart
          shows that no excess  rent  was  collected  for  that  nine  month
          period.  The Chart reflects the fact that as of July 1, 1986,  the
          new owner insisted on collecting $404.71 per month as the rent for 
          the apartment and continued to do so for the balance of the  lease
          term covered by the order.  That is  from  July  1,  1986  through
          April 30, 1987.  For that ten month  period,  the  Administrator's
          Chart indicates that the legal regulated rent was $342.24.      

               In its Petition, the owner contends  that  the  Administrator
          erred in the order below  in  not  directing  that  the  owner  be
          credited, against the excess rent to be refunded, with a sum equal 
          to the difference $342.24 and  $300.00  multiplied  by  19  months
          (October 1, 1985 through June 30, 1987). 

               The tenants' answer opposing the Petition asks that the order 
          of the Rent Administrator be affirmed, and that  the  Petition  be
          denied.  The tenants note that title to the subject  building  was
          transferred effective July 1, 1986 and that as of  that  date  the
          current owner, Museum Plaza Associates (Empire Management,  agent)
          demanded payment of the rent set forth in  the  tenants'  July  1,
          1985 to June 30, 1987 lease: $404.71 per month.

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

               The  Commissioner  finds  that  the  letter  in   which   the
          petitioner-prior-owner notified the tenant that  it  was  reducing
          the rent  to  $300.00,  contained  language  which  constituted  a
          reservation by the petitioner of its rights to the legal regulated 
          rent as determined by the Division.  In that letter, after  noting
          that a review of its records indicated that excess rent  had  been
          collected, the owner stated:   

                    "We have elected to reduce your rent from 
                    $404.71 to $300.00 pending [emphasis supplied]
                    decision of Division of Housing and Community 
                    Development [sic]."

               The Commissioner notes that the two  apartments  whose  rents
          were submmitted as comparable  rents  had  rents  of  $225.00  and
          $220.00, respectively, on June 30, 1974. 


               Given the  somewhat  technical  nature  of  the  calculations
          employed to arrive at a fair market rent using the average of  the
          comparables and the Special  Guidelines,  the  Commissioner  finds
          that the prior-owner's attempt to estimate the fair market rent at 
          $300.00 and reduce the tenants' rent payments to  that  sum  until






          ADM. REVIEW DOCKET NO.: BE 410268 RO
          the Division had issued its order, was reasonable.  The 
          Commissioner believes that the prior owner's  pursuit  of  such  a
          course of conduct should not result in its being prejudiced.   The
          Commissioner finds this to be especially so in view  of  the  fact
          that in his chart,  the  Administrator  noted  that,  upon  taking
          title, (that is, as of July 1, 1986) the current owner insisted on 
          charging the tenants the rent  set  forth  in  their  85-87  lease
          ($404.71); in the  chart,  the  Administrator  resumed  using  the
          figure of $342.24 as the legal regulated rent for the purposes  of
          calculating the excess rent collected from July 1, 1986,  onwards.
                
               Based on the  foregoing,  the  Commissioner  finds  that  the
          Administrator's order should be modified to provide that  the  sum
          to be refunded by the petitioner-prior-owner, Berger  and  Berger,
          should be reduced by a sum equal to the difference between $342.24
          and $300.00 ($42.24) multiplied by  9  (months:  October  1,  1985
          through June 30, 1986), that is, by $380.16; that is so  that  the
          sum to be so refunded is reduced from $4,892.88 to $4,512.72.

               THEREFORE, pursuant to the Rent Stabilization Law  and  Code,
          it is

               ORDERED, that the Petition be, and the same hereby is granted 
          in part; and that the Rent Administrator's order be, and the  same
          hereby is amended in accordance with this order and opinion. 

          ISSUED:






                                                                        
                                          ELLIOT SANDER
                                          Deputy Commissioner



                                          

























          ADM. REVIEW DOCKET NO.: BE 410268 RO











    

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