BF 210285 RO

                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO. BF 210285 RO
                                              :  DRO DOCKET NO.TC-48272-G

                                PETITIONER    : 

               On June 29, 1987, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on June 
          1, 1987, by the Rent Administrator, 10 Columbus Circle, New York, 
          New York, concerning the housing accommodations known as 2401 
          Nostrand Avenue, Brooklyn, New York, Apartment No. 5C, wherein the 
          Rent Administrator determined that the owner had overcharged the 

          The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2526.1 of the Rent Stabilization Code.

          The issue herein is whether the Rent Administrator's order 
          was warranted.

          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 in August, 1979, by 
          the filing of a rent overcharge complaint by the tenant.  In 
          answer to the complaint, the owner submitted a complete rental 
          history for the subject apartment.

          In Order Number CDR 30,434, the Rent Administrator determined 
          that the tenant had been overcharged in the amount of $1,139.22 
          and directed the owner to refund such overcharge to the tenant.

          In this petition, the owner contends in substance that there 
          is no rent overcharge in that the Rent Administrator failed to 
          allow the rent increases provided in the last two years of the 
          complaining tenant's three year vacancy lease which commenced on 
          November 1, 1978, even though such rent increases were provided 
          for in the lease and even though the final rent called for in the 
          lease - $267.39 - was still under the Guideline 10 lease increase 
          applicable at the November 1, 1978 lease commencement.

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

          BF 210285 RO

          An examination of the records in this case discloses that the 
          owner is correct in its contention that the lease commencing 
          NOvember 1, 1978, and terminating October 31, 1981, was a 
          graduated lease calling for rents of $257.39 effective November 1, 
          1978, $262.39 effective November 1, 1979, and $267.39 effective 
          November 1, 1980.  Such amounts included a rent increase of $8.39 
          for a new refrigerator.  An examination of the records further 
          discloses that increases for the last two years of this lease were 
          disallowed by the Rent Administrator, and on that basis, the Rent 
          Administrator determined that a rent overcharge had occurred.

          However, it is noted that the lawful stabilization rent 
          immediately prior to the November 1, 1978 lease was $237.90.  
          Pursuant to Guideline 10, the owner was entitled to an increase of 
          14% over $237.90 ( 8 1/2% guideline, 1/2% electric allowance and 
          5% vacancy allowance) plus $8.39 for the new refrigerator making 
          the allowable rent $279.60 effective November 1, 1978.  Since the 
          graduated lease rents of $257.39, $262.39, and $267.39 were all 
          lower than $279.60. the owner was limited to the rents charged and 
          no overcharge should have been found by the Rent Administrator.  
          In addition, the owner was permitted to, and did in fact, charge 
          temporary fuel surcharges during this period.  The rent was then 
          increased to $320.87 effective November 1, 1981 due to a 20% 
          increase ( 16% and 4% electric allowance) for a three year renewal 
          lease pursuant to Guideline 14; then increased to $327.38 
          effective December 24, 1982 due to a major capital improvement 
          rent increase; then increased to $356.84 effective November 1, 
          1984 due to a 9% increase for a two year renewal lease pursuant to 
          Guideline 16; and then increased to $389.96 effective November 1, 
          1986 due to a 9% increase for a two year renewal lease pursuant to 
          Guideline 18.  Accordingly, no rent overcharge occurred.

          If the owner has already complied with the Rent 
          Administrator's order and there are arrears due to the owner as a 
          result of the instant determination, the tenant is permitted to 
          pay off the arrears in 12 equal monthly installments.  Should the 
          tenant vacate after the issuance of this order or have already 
          vacated, said arrears shall be payable immediately.

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

          ORDERED, that this petition for administrative review be, and 
          the same hereby is, granted, and, that the order of the Rent 
          Administrator be, and the same hereby is, revoked, and it is found 
          that no rent overcharge occurred.

                                          ELLIOT SANDER
                                          Deputy Commissioner


          BF 210285 RO


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