Docket Number: BC-410147-RT
                                 STATE OF NEW YORK
                           OFFICE OF RENT ADMINISTRATION
                                    GERTZ PLAZA
                              92-31 UNION HALL STREET
                              JAMAICA, NEW YORK 11433

        APPEAL OF                              DOCKET NO.: BC 410147-RT
             REGINA PAIDAS,                    DRO DOCKET NO.:  CDR#  28,861
                              PETITIONER    :  Other Party: 
        ------------------------------------X  Hudson Associates, Owner 

        On  March  17,  1987,  the  above-named  petitioner-tenant  filed  a
        Petition for  Administrative  Review  against  an  order  issued  on
        February 10, 1987, by the Rent Administrator at 10 Columbus  Circle,
        New York, New York, concerning the housing accommodations  known  as
        apartment 13 at 104 West 96th Street, New York,  New  York,  wherein
        the Administrator established the stabilized rent and dismissed  the
        tenant's rent overcharge complaint.

        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 record relevant to  the
        issues raised in the administrative appeal.

        This proceeding was originally commenced in October of 1983, by  the
        filing of a complaint of rent overcharge  with  the  New  York  City
        Conciliation and Appeals Board (CAB,  the  agency  formerly  charged
        with enforcing the Rent  Stabilization  Law)  by  the  tenant.   The
        tenant alleged that she had taken occupancy under a one year lease 
        (May 1, 1983 to April 30, 1984) at a monthly rental of $885.00.  The 
        tenant further alleged that prior to her occupancy the apartment had 
        been subject to rent control and that the Maximum  Base  Rent  (MBR)
        for 1972-73 had been $120.67.   The  tenant  subsequently  submitted
        what appears to be a redacted copy of a February 7,  1972  order  of
        Maximum Base Rent.  It shows a tenant named Gordon residing  at  the
        subject apartment and  it  states  that  the  MBR  for  1972-73  was
        $120.67.   The  tenant  also  made  an  allegation  as  to   certain
        improvements installed in  the  apartment,  but  the  allegation  is
        somewhat vague as to when the improvements were installed and 
        whether in fact she was confirming their installation.  The tenant 
        stated that "To the best of my knowledge the  following  renovations
        were being made:".  The tenant then listed the following items: 

             "Kitchen: new sink            Bathroom: new sink

          Docket Number: BC-410147-RT
                       new electric stove            new bathroom
                       new refrigerator               cabinets (2)
                       new cabinet                   new door
                       new linoleum floor

             Rest of Apartment:  new wooden floors (nailed on top
                                  of old one
                                 two new doors
                                 some walls being sheet rocked"

        In its answer to the  complaint,  the  owner  alleged  that  it  had
        purchased the subject building in November of 1982;  that  prior  to
        the tenant's occupancy, the  apartment  had  been  occupied  by  the
        superintendent from 1976 to 1983; that the  superintendent  paid  no
        rent;  and  that  prior  to  the  superintendent's  occupancy,   the
        apartment had been rent controlled.  The owner submitted a copy of a 
        Notice of Increase  In  1976-1977  Maximum  Base  Rent  and  Maximum
        Collectible Rent Computation (Short Form).  It was  addressed  to  a
        tenant named Gordon concerning the subject apartment  and  showed  a
        MBR  of  $159.73.   The  owner  further  alleged   that   when   the
        superintendent vacated the apartment it was totally renovated.   The
        owner submitted an unsigned, two page, inventory of work  under  the
        letterhead of a Monte's Construction Co.   This  document  does  not
        state where the described work was done (neither as to  the  address
        of the building nor  as  to  the  apartment).   This  document  (the
        Monte's document) indicates a total  cost  of  $14,500.00,  but  the
        total of the  separately  listed  items  therein  adds  up  to  only
        $13,950.00.  The owner also submitted what appears to be an  invoice
        from a Quero Construction Company for electrical work at the subject 
        apartment at a total cost of $1,000.00.  The  owner  also  submitted
        copies  of  six  checks  (the  front  only).   Four   name   Monte's
        Construction as payee and total $14,500.00.   None  of  the  Monte's
        checks bears any notation as  to  what  the  checks  were  given  in
        payment of.  The other two checks total $1,000.00.  One names  Quero
        ($600.00) as payee and the other  is  payable  to  a  David  Chirley
        ($400.00) who appears to have signed the  Quero  invoice.   Both  of
        these checks bear a notation as to  "elec"  at  apartment  13.   The
        owner also submitted a list of hardware items totalling  $47.19  and
        invoices for various miscellaneous amounts for hardware items.

        In the  appealed  order,  citing  CAB  Opinion  Number  23,243,  the
        Administrator determined that the tenant's initial rent was the base 
        rent for calculating all future Guidelines increases  and  that  the
        owner had not collected any  overcharges  from  the  tenant  through
        January 31, 1987.

        In her  Petition,  the  tenant  contends,  in  substance,  that  the
        Administrator erred as follows:


          Docket Number: BC-410147-RT

                  1. The Administrator's order cited and relied upon
             CAB Opinion Number 23,243.  That opinion was misapplied
             to the facts in this case since, here, according to the
             owner's documents, the apartment was subject to rent 
             control after June 30, 1974 and was occupied by the
             superintendent, on a temporary basis, starting sometime 
             in 1976 after having been subject to rent control.

                  2. The occupancy of the subject apartment by the
             superintendent, under all of the facts herein, does not
             fit within the definition of an exempt occupancy under
             Section 2(g)(4) of the Code in effect on April 30, 1987.
             The subject apartment is on the third floor.  The 
             logical location for a superintendent's apartment is 
             on the first floor or the basement level.  Within a few
             days of Hudson Associates' acquisition of the subject
             building in November of 1982, the superintendent was
             discharged and required to vacate the subject apartment.

                  3. According to the Code in effect on April 30, 
             1987, all that the  owner  was  entitled  to  in  terms  of  an
             increase, when the  tenant  took  occupancy,  was  15%  of  the
             previous rent plus 1/40th of the renovation costs.

                  4. Rents for identical non-renovated apartments in 
             this building on August 21, 1983 ranged from $196.51 to 
             $295.13 (Apts. 3, 8, 23 and 28) as evidenced by the    
             attached copy of the owner's application to increase
             rents based on the installation of Major Capital
             Improvements (MCIs).
        Although afforded the opportunity, the owner has not  interposed  an
        answer to the tenant's petition.

        The Commissioner is of  the  opinion  that  this  matter  should  be
        remanded to the Administrator for further, appropriate processing as 
        a Fair Market Rent Appeal (FMRA) and, in  conjunction  therewith,  a
        review of the owner's claim to a rent increase based on the  alleged
        improvements installed in the apartment.

        The Commissioner finds that it is undisputed that the tenant is  the
        first stabilized tenant to occupy the subject apartment after it was 
        vacancy decontrolled.  Moreover, the Commissioner notes  that  there
        is no indication in this record  that  the  owner  ever  served  the
        tenant with a Notice of Initial Legal Regulated Rent (also known  as
        a DC-2 form), although the Administrator requested the submission of 
        such proof.

        The tenant has raised some questions concerning the veracity of  the
        owner's allegations concerning the superintendent's occupancy of the 
        subject apartment.  However, the Commissioner finds that the  tenant
        has submitted no evidence to rebut the owner's allegations.


          Docket Number: BC-410147-RT

        Moreover, the Commissioner finds that if the subject  apartment  had
        in fact been occupied by the  superintendent  and,  therefore,  been
        exempt  from  regulation  between  the  vacancy  decontrol  of   the
        apartment in 1976 and the tenant's occupancy of  it,  commencing  in
        1983, the tenant would still be entitled to file a FMRA.

        Section 25A (3) of the Code in effect on April  30,  1987  reads  in
        pertinent part as follows:

                  A.  An application to adjust the Initial Legal
             Regulated Rent on the ground that it exceeds the Fair
             Market Rent for the dwelling unit may be filed with
             the CAB by the tenant of.

                                *     *     *     *     

                  (3)  a dwelling unit which was subject to 
             the City Rent Law on June 30, 1974 and was vacated
             thereafter, provided however, that this right is
             limited to the first tenant in occupancy after the
             first vacancy occurring subsequent to June 30, 

        The Commissioner finds that to deny the tenant the right to  a  FMRA
        simply because there was a period, between vacancy decontrol and the 
        tenant's occupancy as the first stabilized tenant, during which  the
        apartment may have been exempt from regulation would be contrary  to
        the language and intent of Section 25A (3) of the Code in effect  on
        April 30, 1987.

        The Commissioner notes that the superintendent may not be  deemed  a
        tenant within the meaning of Section 25A (3), as it is clear that as 
        used therein, the  term  tenant  meant  a  rent  stabilized  tenant.
        Moreover, according to the owner, the superintendent paid no rent.

        The Commissioner  finds  that  CAB  Opinion  Number  23,243  is  not
        controlling herein since it did not  deal  with  the  right  of  the
        tenant therein to a FMRA.  It held that  a  tenant  who  first  took
        occupancy on December 15, 1971 as the superintendent and so  resided
        in her apartment rent free, until November 1, 1977, when she  became
        a rent stabilized tenant of the apartment, had to use the first rent 
        paid under her initial  stabilized  lease,  as  the  base  rent  for
        computing future  Guidelines increases.  Although  the  question  of
        that tenant's right to a FMRA was not  discussed,  the  Commissioner
        notes that, based on the facts as set forth in  that  Opinion,  that
        tenant may very well not have been entitled to a FMRA, as it appears 
        that that apartment was not vacated between January 1, 1974 and June 
        30, 1974 (as required by Section 25A (1) and  (2))  and  it  appears
        that said apartment was not a dwelling unit subject to rent  control
        on June 30, 1974 (as required by Section 25A (3)).

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


          Docket Number: BC-410147-RT

        ORDERED, that this petition be, and the same hereby  is  granted  to
        the extent of remanding the proceeding  to  the  Rent  Administrator
        for processing in accordance with this order and opinion.


                                        ELLIOT SANDER
                                        Deputy Commissioner 

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