BI 110151 RO
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
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BI 110151 RO
34-50 28th Realty, DRO DOCKET NO.: 59567
TENANT: Steven Baeck
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND REMANDING PROCEEDING TO THE DISTRICT RENT
ADMINISTRATOR
On September 9, 1987, the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on August 28, 1987 and
amended October 14, 1987, by the Rent Administrator, 10 Columbus Circle,
New York, New York, concerning the housing accommodations known as 34-50
28th Street, Queens, New York, Apartment No. 5N, wherein the District
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 appeals.
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 January 1987 by the filing
of a fair market rent appeal by the tenant. The tenant took occupancy
pursuant to a lease commencing November 1, 1986 and expiring October 31,
1987 at a monthly rent of $486.11.
In the order under appeal herein, the District Rent Administrator
adjusted the initial legal regulated rent by establishing a fair market
rent of $459.55 effective November 1, 1986 the commencement date of the
initial rent stabilized lease, and directed the owner to refund excess
rent and security in the amounts of $265.00 through August 31, 1987. In
the amended order the excess rent and security amount to be refunded was
increased to $318.72 to include the period through October 31, 1987.
In this petition, the owner contends in substance that the Rent
Administrator's formula for applying Special guideline 18 was contrary
to the method outlined in the language of the Special guidelines order
in that the Rent Administrator applied the 20% increase to the 1986 MBR
prior to adding the applicable Fuel cost adjustment rather than applying
the 20% increase to the sum of the 1986 MBR plus the applicable fuel
cost adjustment. In addition, the Rent Administrator failed to apply
the 6% Rent Guideline Board order increase for a 2 year lease.
Further, the owner cited the rent of apartment 6N plus real estate
brokers assessments of area rents to be considered for comparability.
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In answer to the owner's petition, the tenant states in substance that
the order was warranted; that the 6% increase was not applicable and the
owner should not be allowed to submit comparables on appeal.
The Commissioner is of the opinion that this petition should be granted
in part.
Pursuant to Sections 2522.3(e) and (f) the Rent Stabilization Code
effective May 1, 1987, for fair market rent appeals filed after April 1,
1984 comparability will be determined based on the following:
(e) (1) Legal regulated rents, for which the time to
file a Fair Market Rent Appeal has expired and no
Fair Market Rent Appeal is then pending, or the Fair
Market Rent Appeal has been finally determined,
charged pursuant to a lease commencing within a 4
year period prior to, or a one year period
subsequent to, the commencement date of the initial
lease for the housing accommodation involved; and
(2) At the owner's option, market rents in effect
for other comparable housing for the housing
accommodation involved as submitted by the owner
(f) Where the rents of the comparable housing
accommodations being considered are legal regulated
rents, for which the time to file a Fair Market Rent
Appeal has expired, and such rents are charged
pursuant to a lease ending more than 1 year prior to
the commencement date of the initial lease for the
subject housing accommodation, such rents shall be
updated be guidelines increases for 1 year renewal
leases, commencing with the expiration of the
initial lease for the comparable housing
accommodations to a date within 12 months prior to
the renting of the housing accommodations involved.
The Commissioner finds that in this case the owner was not afforded an
opportunity to submit comparability data pursuant to the requirements of
the current Rent Stabilization Code. Therefore, the Commissioner finds
that the proceeding should be remanded to the Administrator for further
processing in order to afford the owner an opportunity to submit
comparability data pursuant to the requirements of the current code.
Further, the Commissioner finds that the Rent Administrator incorrectly
utilized the formula for applying the special guideline increase by
applying the 20% increase to the 1986 MBR alone and then adding the fuel
cost adjustment. On remand, the Rent Administrator should recalculate
the special guideline portion of the fair market rent calculation by
applying the 20% increase to the sum of the 1986 MBR plus the applicable
fuel cost adjustment. In addition, all increases for new
equipment/improvements should be calculated after the establishment of
the fair market rent utilizing both criteria, if applicable.
The Commissioner rejects however the owner's addition of a 6% guideline
increase above the special guideline increase. The standard guideline
increase is applicable to previously stabilized apartments and is not
included in the special guideline utilized to establish first stabilized
BI 110151 RO
rents.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be and the same hereby is granted to the
extent of remanding this proceeding to the District Rent Administrator
for further processing in accordance with this order and opinion. The
automatic stay of so much of the District Rent Administrator's order as
directed a refund is hereby continued until a new order is issued upon
remand. However, the Administrator's determination as to the rent is
not stayed and shall remain in full force and effect, except for any
adjustments pursuant to lease renewals, until the Administrator issues
a new order upon remand.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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