BH 110124 RT

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

          APPEAL OF                              DOCKET NO.:  BH 110124 RT

                                                 DRO DOCKET NO.: TA 9732
                     LINDA APPELBAUM,                            CDR 30,917

                                                 TENANT:  LINDA APPELBAUM


          On August 17, 1987, the above-named petitioner-tenant filed a 
          Petition for Administrative Review against an order issued on July 
          17, 1987 by the Rent Administrator, 10 Columbus Circle New York New 
          York, concerning the housing accommodations known as 72-38 113th 
          Street Queens, New York, Apartment No. 2C wherein the Rent 
          Administrator determined the fair market rent pursuant to the 
          special fair market rent guideline promulgated by the New York City 
          Rent Guidelines Board for use in calculating fair market rent 

          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 Administrative Appeal is being determined pursuant to the 
          provisions of Section 26-513 of the Rent Stabilization Law.

          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 in June 1981 by the filing 
          of a fair market rent adjustment application by the tenant who took 
          occupancy of the subject apartment on March 1, 1981 at a rental of 
          $450.00 per month.

          The owner was served with a copy of the tenant's application and 
          afforded an opportunity to submit June 30, 1974 or post June 30, 

          BH 110124 RT

          1974 comparability data for determining the fair market rent of the 
          subject apartment and to submit proof of any improvements made in 
          the subject apartment.

          In response, the owner stated in substance that due to new 
          equipment installed in the subject apartment it was entitled to 
          charge a fair market rent of $450.00.  As comparables, the owner 
          cited updated rents for apartment 6J and submitted proof of service 
          of the Initial Legal Regulated Rent Notice (hereafter DC-2 Notice) 
          with respect to the above cited apartment.  The owner also 
          submitted bills and cancelled checks showing it made expenditures 
          totalling $1,889.36 in the subject apartment immediately prior to 
          occupancy by the tenant herein.

          In Order Number CDR 30,917, the Rent Administrator dismissed the 
          tenant's Fair Market Application by establishing that the tenant's 
          initial rent of $450.00 did not exceed the fair market rent charged 
          to the tenant.  The Rent Administrator considered both the owner's 
          improvements at 1/40th of the total costs, as well as averaging the 
          rent of comparable Apt. 6J in establishing the Fair Rent of the 
          subject apartment.

          In this petition, the tenant contends in substance that the rent 
          Administrator miscalculated the Fair Market Rent by averaging the 
          comparable rent of Apt. 6J ($500.00) with the Fair Market rent of 
          the subject apartment $(308.81) exclusive of improvements ($47.23) 
          and adding the improvements to the averaged rent resulting in the 
          dismissal of the tenant's Fair Market Application.

          The tenant contends that the amount of the improvements should have 
          been added to the Fair Market Rent of the subject apartment prior 
          to averaging with the comparable rent of apartment 6J which would 
          result in a fair market rent of $428.02 and an adjustment of the 
          initial rent charged by the owner.

          In answer to the tenant's petition, the owner stated in substance 
          that the Rent Administrator's application of the second statutory 
          criteria has been upheld by the courts and the order was correct as 

          The Commissioner is of the opinion that this petition should be 

          An examination of the records in this case discloses that there was 
          no irregularity in the method of calculating the fair market rent 
          for the subject apartment.  The Rent Administrator correctly 
          utilized the standard formula in averaging the rent of the 
          comparable apartment with the rent based on the special guideline 
          prior to adding the increase for new equipment.

          There is no requirement that any rent increase due to apartment 
          improvements should be subtracted from the rent of a comparable 
          apartment before rent averaging.

          Accordingly, the Rent Administrator's order was warranted.

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

          BH 110124 RT

          ORDERED, that this petition for administrative review be, and the 
          same hereby is, denied, and that the order of the Rent 
          Administrator be, and the same hereby is, affirmed.


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner


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