BH 410091 RO

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

          APPEAL OF                              DOCKET NO. BH 410091 RO
                                              :  DRO DOCKET NO.TC-65151-G
                                                          ASHER LEVINE
                                PETITIONER    : 

               On August 19, 1987, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on July 
          21, 1987, by the Rent Administrator, 10 Columbus Circle, New York, 
          New York, concerning the housing accommodations known as 400 East 
          55th Street, New York, New York, Apartment No. 5G, wherein the Rent 
          Administrator determined that the owner had overcharged the 

          The Commissioner notes that this proceeding was filed 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 2526.1 of the current Rent Stabilization 

          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 by the filing in 
          August 1982 of a rent overcharge complaint by the tenants who 
          stated that they first moved to the subject apartment on June 1, 
          1981 at a monthly rental of $603.87.  The tenants stated in their 
          complaint that prior tenant Paul Weissman entered into a two year 
          vacancy lease commencing on November 1, 1978 at a monthly rental 
          of $420.13; that the Weissman lease was then assigned to Linda 
          Green effective February 1, 1979 at a monthly rental of $441.14 
          which represented an illegal increase over Mr. Weissman's rent and 

          BH 410091 RO

          that Ms. Green then renewed her lease for a two year period 
          effective November 1, 1980, also at an illegal rent.

          In answer to the tenants' complaint, the owner submitted a 
          rental history for the subject apartment and stated in substance 
          that although it took a 5% rent increase upon the assignment of 
          the lease to Linda Green effective February 1, 1979, it did not 
          take a vacancy allowance when Ms. Green renewed the lease so that 
          no overcharge should be found for the current tenants.

          In Order Number CDR 30,958, the Rent Administrator determined 
          the lawful stabilization rent was $499.95 per month effective June 
          1, 1981 and further determined that the tenants had been 
          overcharged in the amount of $2598.00 through May 31, 1983 and 
          directed the owner to refund such overcharge to the tenants.  In 
          determining the amount of the rent overcharge, no assignment 
          allowance was permitted for the assignment to Ms. Green and no 
          vacancy allowance was permitted when Ms. Green renewed her lease.

          In this petition, the owner alleges in substance that upon 
          the initial occupancy by Mr. Weissman, it was entitled to an 11.5% 
          rent increase (6 1/2% + 5% vacancy allowance) for a two year 
          vacancy lease pursuant to Guideline 10, but took only a 10.5% rent 
          increase so that it is entitled to an additional 1% rent increase; 
          that although the owner was not entitled to a 5% allowance when 
          the Weissman lease was assigned to Ms. Green, it was entitled to a 
          5% vacancy allowance when Ms. Green signed the November 1, 1980 
          lease in her own name and the waiver of this vacancy allowance by 
          the owner corrected the owner's prior mistake in taking an 
          assignment allowance so that no overcharge in fact occurred.

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

          Regarding the owner's contention that it is now entitled to 
          an additional 1% rent increase which it failed to charge tenant 
          Weissman during the Guideline 10 period, it is noted that where 
          the actual rent charged is less than the rent with the maximum 
          permitted increases, the lawful stabilization rent is limited to 
          the rent charged and cannot be subsequently increased.

          Regarding the owner's contention that it was entitled to 
          charge a vacancy allowance when Ms. Green first signed a lease in 
          her own name effective November 1, 1980, it is noted that 
          effective February 1, 1979, the Weissman lease was assigned to Ms. 
          Green and any subsequent lease signed by Ms. Green is considered a 
          renewal lease and not a vacancy lease so that no vacancy allowance 
          was warranted when Ms. Green renewed the lease effective November 
          1, 1980.  Further, the Weissman lease which was assigned to Ms. 
          Green was a vacancy lease so that the owner obtained a vacancy 
          allowance upon the renting to Mr. Weissman effective November 1, 
          1978 and was not entitled to a second vacancy allowance when the 

          Weissman lease was assigned to Ms. Green.  Accordingly, the Rent 
          Administrator's order finding a rent overcharge was warranted.

          BH 410091 RO
          Because this determination concerns lawful rents only through 
          May 31, 1983, the owner is cautioned to adjust subsequent rents 
          to an amount no greater than that determined by the Rent 
          Administrator's order plus any lawful increases, and to register 
          any adjusted rents with this order and opinion being given as the 
          explanation for the adjustment.

          This order may upon the expiration of the period in which the 
          owner may institute a proceeding pursuant to Article 78 of the 
          Civil Practice Law and Rules, be filed and enforced as a judgment. 

          A copy of this order is being sent to the tenant now in 
          occupancy at the subject apartment since the owner indicated in 
          its petition that the tenants herein have now vacated the subject 

          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, denied, and, that the order of the Rent 
          Administrator be, and the same hereby is, affirmed.


                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner


          BH 410091 RO


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