BI 410118 RO

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

          APPEAL OF                              DOCKET NO. BI 410118 RO
                                              :  DRO DOCKET NO.T/C-080193-G
               316 REALTY CO.                    TENANTS: MAREK AND YESSMAN

                                PETITIONER    : 

               On September 18, 1987, the above-named petitioner-owner filed 
          a Petition for Administrative Review against an order issued on 
          August 13, 1987, by the Rent Administrator, 10 Columbus Circle, New 
          York, New York, concerning the housing accommodations known as 316 
          West 94th Street, New York, New York, Apartment No. 1C, wherein the 
          Rent Administrator determined that the tenants had 
          been overcharged.

          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 Rent Stabilization Code.

          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 in February, 1984, 
          by the filing of a rent overcharge complaint by the tenants who 
          took occupancy pursuant to a lease commencing April 1, 1983 at a 
          monthly rent of $620.00.  In answer to the tenants' complaint, the 
          owner submitted a complete rental history as required.

          In Order Number CDR 31,076, the Rent Administrator determined 
          that the tenants had been overcharged in the amount of $15,375.47 
          including interest on the amount of the overcharge occurring on 
          and after April 1, 1984 and directed the owner to refund the 

          BI 410118 RO
          overcharge to the tenants.

          In this petition, the owner contends in substance that the 
          Rent Administrator's order is incorrect and should be modified 
          because there was no overcharge during the period from June 15, 
          1983 to August 31, 1983 because the tenants were subletting the 
          subject apartment during this period and received the rent money 
          from the subtenant and that the monthly lawful stabilization rents 
          were incorrectly set at $402.48 effective April 1, 1984, and 
          $428.64 effective April 1, 1986, rather than at $406.28 effective 
          April 1, 1984, and $432.69 effective April 1, 1986.

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

          With regard to the owner's contention that no overcharge 
          should have been found during the period of subletting, it is 
          noted that although the tenants received $650.00 per month from 
          the subtenant during such period, they also paid $650.00 per month 
          to the owner.  Accordingly the owner was still collecting a rent 
          overcharge during the period of the subletting and must refund 
          such overcharge to the tenants.  The tenants should then refund 
          this portion of the overcharge to the subtenant.  It is noted 
          however that the owner is under no obligation to refund any 
          overcharge to the subtenant.

          With regard to the owner's contention that the April 1, 1984 
          monthly lawful stabilization rent should have been set at $406.28 
          and that the April 1, 1986 monthly lawful stabilization rent 
          should have been set at $432.69, it is noted that the March 31, 
          1984 monthly lawful stabilization rent was $379.70 and that the 
          owner was then entitled to a 6% increase pursuant to Guideline 15 
          (7% minus 1% electrical inclusion) for a two year renewal lease 
          thus making the April 1, 1984 monthly lawful stabilization rent 
          $402.48 as determined by the Rent Administrator.  Unfortunately, 
          the Rent Administrator incorrectly listed this rent increase as 7% 
          rather than the 6% actually used to determine the increase.  
          Accordingly, the Rent Administrator's order is hereby modified to 
          show a 6% Guideline 15 increase rather than the 7% listed.  In 
          addition, the April 1, 1986 monthly lawful stabilization rent was 
          correctly listed by the Rent Administrator as $428.64 - the March 
          31, 1986 monthly lawful stabilization rent of $402.48 increased by 
          6 1/2% pursuant to Guideline 17 for a two year renewal lease.

          Because this determination concerns lawful rents only through 
          July 31, 1987, 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 
          or not in excess of twenty percent per month of the overcharge may 
          be offset against any rent thereafter due the owner.

          BI 410118 RO

          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 as modified in 
          accordance with this order and opinion.  The total amount of the 
          rent overcharge through July 31, 1987 is $15,375.47.


                                          ELLIOT SANDER
                                          Deputy Commissioner



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