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 NOS: BB110076RO;
BB110171RO
83-10 35th Avenue Owners Corp. D.R.O. DOCKET NO:
and Q-3121749-RT
Windsor Place Corp. TENANT: Frank Schornstein
PETITIONERS
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ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
On March 12, 1987, the above named petitioner-current own r (83-
10 35th Ave. Owners Corp.) filed a Petition for Administrative
Review (BB110076RO) against an order issued on February 4, 1987,
by the District Rent Administrator, 10 Columbus Circle, New
York, New York, concerning housing accommodations known as
apartment 6R, 83-10 35 Avenue, Jackson Heights, New York.
On February 11, 1987, the above-named petitioner-prior owner
(Windsor Place Corp.) filed a Petition for Administrative Review
(BB110171RO) against the same order.
The issue in these appeals is whether the District Rent
Administrator's order was warranted.
The applicable section of the law is Section 26-516 of the Rent
Stabilization Law.
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 appeals.
This proceeding was commenced on February 17, 1984 by the
tenant's filing of a fair market rent appeal with the New York
City Conciliation and Appeals Board, the agency formerly charged
with enforcing the Rent Stabilization Law.
In response, the prior owner contended in substance that prior to
the complaining tenant's occupancy, the subject apartment was
rent-controlled.
Docket No. BB110076RO - 2 -
On October 10, 1986, both the current and prior owners were
served with a copy of the tenant's fair market rent appeal, and
were requested to submit comparability data (rents generally
prevailing for substantially similar housing accommodations
located in the subject premises and in the same area as the
subject premises).
On October 25, 1986, the current owner submitted its answer to
the tenant's appeal and contended in substance that the subject
premises was acquired in 1985, that the subject premises was
located in one of the finest areas of the city, that the current
maintenance fee was $609.00, and that the rent ($550.36) charged
by the prior owner was below market and fair. In support of
these contentions, the current owner submitted a rent roll for
the five apartments of the subject building in the same line as
the subject apartment; a notice of Maximum Collectible Rent
Effective January 1, 1983; 1983 Maximum Base Rent Master Building
Rent Schedule dated February 25, 1983; leases for the subject
apartment covering the period from October 1, 1982 through
September 30, 1987; and portions of the Cooperative Offering Plan
for the subject premises.
On November 3, 1986, both the current and prior owners were
served with a Summary Notice which advised the owners that the
fair market rent for the subject apartment would be determined on
the basis of the 1982 maximum rent increased by the appropriate
Special Fair Market Rent Guidelines order. Neither owner
submitted a response to this summary notice.
On December 29, 1986, a second Summary Notice was mailed to the
current and prior owners. In response, the current owner
reiterated its previous answer of October 25, 1986 and contended
in substance that setting the fair market rent using the special
guidelines would result in a rent that is below cost.
In Order Number CDR 28,916 issued February 4, 1987, the District
Rent Administrator established the fair market rent as $255.82
using Special Guidelines Order Number 14 and directed the current
and prior owners to refund their respective shares of the excess
rent ($12,676.08) collected from October 1, 1982 through January
31, 1987. The amount of $12,676.08 includes excess security.
The prior owner in its petition states as follows:"We are
estopped from a challenge to this proceeding inasmuch as we no
longer have the tenant's rent records available to us due to the
sale of the premises".
The current owner in its petition reiterates its previous answer
of October 25, 1986 and further contends that ordering the rent
to be reduced to a level which is below the cost of maintenance
is clearly arbitrary and capricious; the tenant and prior owner
negotiated the fair market value of the apartment in light of the
Docket No. BB110076RO - 3 -
circumstances then prevailing and the current market rents; and
the order here under review imposes an arbitrary percentage
increase above the rent control level. In support of these
contentions, the current owner submits Scheduled A of the
Cooperative Offering Plan which lists estimated maintenance
charges for the apartments of the subject premises.
In response, the tenant contends in substance that the owner's
petition should be denied.
The Commissioner is of the opinion that these petitions should be
denied.
Section 26-516 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 evidence of record in the instant case indicates that both
the current and prior owners failed to submit the required
comparability data as listed above although given ample
opportunity to do so. Thus, it was proper for the Administrator
to determine the fair market rent of the subject apartment solely
on the basis of the Special Fair Market Rent Guidelines Order 14.
With regard to the prior owner's contention that it was
prohibited from challenging this proceeding because it no longer
has any rent records concerning the subject premises, the
Commissioner notes that the prior owner participated in the
proceeding before the Administrator by submitting an answer to
the tenant's complaint in December of 1984 while it still owned
Docket No. BB110076RO - 4 -
the subject premises, and that the prior owner ignored several
notices to submit comparability data. Accordingly, the prior
owner is hereby directed to refund to the tenant the excess rent
it collected from October 1, 1982 through May 31, 1985 -
$9825.76. If the prior owner fails to refund to the tenant the
excess rent of $9825.76, the tenant is advised to proceed against
the prior owner in a court of competent jurisdiction.
The current owner is directed to roll back the rent to the lawful
stabilized rents consistent with this decision and to refund or
fully credit against future rents over a period not exceeding
six months from the date of receipt of this order, the excess
rent collected by the current owner from June 1, 1985 through
January 31, 1987 - $2850.32.
In the event the current owner does not take appropriate action
to comply within sixty (60) current days from the date of this
order, the tenant may credit the excess rent ($2850.32) collected
by the current owner against the next months(s) rent until fully
offset.
Because this determination concerns lawful rents only through
January 31,1987, the current owner is cautioned to adjust
subsequent rents to an amount 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 explanation for the adjustment.
If the current owner has already complied with the Rent
Administrator's order and there are arrears due to the current
owner as a result of the instant determination, the tenant shall
be permitted to pay off the arrears in twenty four 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 the current owner's petition be, and the same
hereby is, denied, that the prior owner's petition be, and the
same hereby is, denied, and that the District Rent
Administrator's order be, and the same hereby is, modified in
accordance this order and opinion. The total amount of excess
rent owed to the tenant by the prior owner is $9825.76. The
total amount of excess rent owed to the tenant by the current
owner is $2850.32. The monthly lawful stabilization rent as of
February 1, 1987 is $306.51.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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