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

      APPEAL OF                              DOCKET NO. BA610100RT

                                          :  DISTRICT RENT OFFICE
           Richard Sperber,                  DOCKET NO. 28070
                            PETITIONER    : 

                                     IN PART

      On December 23, 1986, the above-named petitioner-tenant filed a Petition 
      for Administrative Review against an order issued on November 21, 1986, 
      by a Rent Administrator concerning the housing accommodations known as  
      3451 Giles Place, Bronx, New York, Apartment No. L-2, wherein the Rent 
      Administrator determined that the tenant had not been overcharged.

      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 

      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 on September 24, 1984 by the 
      filing of a timely objection to the initial registration, claiming that 
      the initial registered rent was an overcharge.  The tenant assumed 
      occupancy in April, 1979 pursuant to a two year lease at a rent of 
      $170.00 per month.

      In answer to the complaint, the owner submitted the tenant's initial 
      lease and a statement of the subsequent lease history.  The answer 
      stated that the rent was increased to $188.70 per month effective June 
      1, 1981, until March 31, 1983, when it was increased to $205.00 "as per 
      HPD guidelines," and then to $233.45, for the two year term from July 1, 
      1985 to June 30, 1987.  The tenant's initial lease and the lease 
      commencing on July 1, 1985 were the only leases submitted by the owner.

      In Order Number 28070, issued on November 21, 1986, the Rent 
      Administrator determined that there was no overcharge.  The period of 


      review of the order commenced with the determination of a base rent of 
      $205.00 per month effective April 1, 1983, "as established by HPD."  The 
      tenant's subsequent rent of $233.45 was also determined to be the lawful 

      In his petition, the tenant contends that the owner overcharged him 
      since raising his rent without a lease to $188.00 per month, in 1981, 
      and that the initial registered rent of $205.00 per month was also an 
      overcharge, as it was incorrectly determined by HPD.  Specifically, the 
      tenant contends that the rent that was set by HPD was based on a formula 
      of $82.00 per room per month and that, since the apartment is only two 
      rooms, the initial rent should have been $164.00 per month.  However, 
      HPD incorrectly stated that the apartment consisted of 3 rooms, and set 
      an initial rent of $246.00 per month.  The tenant further stated that 
      the owner, in response to a letter from the tenant challenging the room 
      count, agreed to a rent based on 2 1/2 rooms, which computed to an 
      initial rent of $205.00 ($82.00 x 2.5 = $205.00), which was the amount 
      charged the tenant.  With his petition, the tenant submitted a copy of 
      an HPD Order and Report of Setting of Initial Regulated Stabilized Rent 
      pursuant to Article 15 of the Public Housing Finance Law and 
      accompanying letter from the HPD Office of Rehabilitation establishing 
      the post-rehabilitation initial legal rent for the subject apartment at 
      $246.00 ($82.00 per room per month x 3).  Finally, the tenant states 
      that the rent increase for the lease commencing on July 1, 1985 was also 
      illegal becuase the owner had not registered the apartment with the 
      DHCR, as shown by the enclosed copy of the Notice to Owner of Failure to 
      Register Apartments Buildings, dated August 5, 1986.

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

      Section 2526.1(a)(3)(ii) of the Rent Stabilization Code provides that as 
      to complaints filed within 90 days of the initial registration of a 
      housing accommodation, the legal regulated rent for purposes of 
      determining an overcharge shall be deemed to be the rent charged and 
      paid on April 1, 1980, or for a housing accommodations not required to 
      be registered by June 30, 1984, four years prior to the date the housing 
      accommodation was first required to be registered (or if the housing 
      accommodation was subject to the RSL and this Code for less than four 
      years prior to such initial registration, the initial regulated rent) 
      plus in each case, any lawful increase and adjustments.

      In the instant case, the tenant filed a timely objection to the April 1, 
      1984 initial registered rent of $205.00 per month and checked that the 
      complaint was for rent overcharge.  In processing such a complaint, it 
      is proper to review the rent history over the four year period prior to 
      the initial registration from April 1, 1980, as stated above.   The 
      Administrator erred in this case by restricting the period of review to 
      the lease history after the initial rent set by HPD and found no 
      overcharges.  In fact, however, an overcharge occurred from June, 1981 
      through March, 1983, when the owner charged an $18.00 per month increase 
      over the previous rent but failed to offer the tenant a lease, which has 
      the effect of making such increase void.  Overcharges for that period 
      amount to $396.00 ($18.00 x 22 = $396.00).  The owner is directed to 
      refund that amount to the tenant.

      With regard to the April 1, 1984 initial registered rent of $205.00 per 
      month, however, the Administrator properly held that such amount was not 


      subject to review.  The Department of Housing Preservation and 
      Development established the legal rent for the subject apartment 
      effective April 1, 1983 in conjunction with a rehabilitation loan under 
      terms governed by Article 15 of the Public Housing Finance Law and, 
      under Section 2521.1 of the current Rent Stabilization Code, such rent 
      is not subject to challenge through a DHCR proceeding.  The tenant might 
      have more appropriately sought to challenge the HPD order with HPD, but 
      did not do so.  It is noted that the owner voluntarily agreed to charge 
      the tenant less than the amount established by the HPD order and 
      registered such lesser amount ($205.00) with the DHCR and such amount 
      became the lawful initial registered rent for the subject apartment.   
      Finally, DHCR records establish that the owner had registered the 
      apartment with the DHCR, and thus the rent increase for the lease 
      commencing on July 1, 1985 was proper.
      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 Rent Administrator's order be, and the same hereby is, 
      modified in accordance with this order and petition.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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