BI 410289 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

          ------------------------------------X 
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO. BI 410289 RO
                                              :  DRO DOCKET NO.L-3116376-R
               CLAIRE FRIEDLANDER                TENANT: JEFFREY SEELY

                                PETITIONER    : 
          ------------------------------------X                             
          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART


               On September 15, 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 251 
          West 92nd Street, New York, New York, Apartment No. 6D, 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 appeals.

          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 26-513 of the Rent Stabilization Law

          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 January, 1984, by 
          the filing of a complaint in which the tenant questioned the 
          initial legal regulated rent of the subject apartment.  The tenant 
          stated that he had sublet the subject apartment on May 10, 1981, 
          but had never met the prime tenant and that the entire transaction 
          was handled by the superintendent.  A hearing was held on May 20, 
          1986 and based on the testimony adduced at the hearing, the 



          hearing officer determined that the prime tenant never occupied 







          BI 410289 RO
          the subject apartment and that the tenant herein was the first 
          rent stabilized tenant of the subject apartment.

          The owner was afforded an opportunity to submit June 30, 1974 
          or post June 30, 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 indicated that all apartments in the 
          subject line were rent controlled on June 30, 1974, cited 
          apartments 11D decontrolled in 1975, 10D decontrolled in 1975, 9D 
          decontrolled in 1975 and 1D decontrolled in 1978.  All of the 
          aforementioned apartments are in the subject premises. The owner 
          also cited the following apartments at 490 West End Avenue - 5C 
          decontrolled in 1971, 1C decontrolled in 1971, 6C decontrolled in 
          1979, 8C decontrolled in 1975, 12C decontrolled in 1974, and 9C 
          decontrolled in 1981.  The owner did not submit proof of service 
          of the Initial Legal Regulated Rent Notice (hereafter DC-2 Notice) 
          with respect to any of the above apartments although requested to 
          do so for those where vacancy decontrol occurred after June 30, 
          1974.  The owner submitted proof in the form of copies of bills 
          and a cancelled check showing it installed a new refrigerator and 
          gas range in the subject apartment in April 1981 at a total cost 
          of $708.48.

          In Order Number CDR 31,087, the Rent Administrator adjusted 
          the initial legal regulated rent by establishing a fair market 
          rent of $564.42 effective May 10, 1981, the date of the initial 
          occupancy of the tenant herein and directed the owner to refund 
          $20,298.07 in excess rent to the tenant.  Based on the failure to 
          submit usable June 30, 1974 or usable post June 30, 1974 
          comparability data, the Rent Administrator determined the fair 
          market rent using the special fair market rent guidelines alone.  
          In addition no allowance was given for any improvements made in 
          the subject apartment.

          In this petition, the owner contends in substance that the 
          improvements made in the subject apartment should have been 
          considered and that the comparable apartment rents submitted by 
          the owner should also have been considered.

          The Commissioner is of the opinion that this petition should 
          be granted in part. 

          Section 26-513 of the Rent Stabilization Law provides, in 
          pertinent part, that fair market rent adjustment applications are 
          to be determined by the use of special fair market rent guidelines 
          orders promulgated by the New York City Rent Guidelines Board and 
          by the rents generally prevailing in the same area for 
          substantially similar housing accommodations.  In order to 
          determine rents generally prevailing in the same area for 
          substantially similar housing accommodations, it is DHCR's 



          procedure for fair market rent appeal cases filed prior to April 
          1, 1984 to allow owners to submit June 30, 1974 free market rental 
          data for complete lines of apartments, beginning with the subject 
          line. The average of such comparable rentals will then be updated 


          BI 410289 RO
          by annual guidelines increases.  Alternatively, DHCR procedure 
          allows owners to have comparability determined on the basis of 
          rents charged after June 30, 1974.  In order to use this method, 
          owners were required prior to November 1, 1984, to submit rental 
          history data for all stabilized apartments in the subject premises 
          and subsequent to November 1, 1984 to submit such data for 
          complete lines of apartments beginning with the subject line.  
          Post June 30, 1974 rent data will be utilized if the comparable 
          apartment was rented to a first stabilized tenant within one year 
          of the renting of the subject apartment and if the owner submits 
          proof of service of a DC-2 Notice or apartment registration form 
          indicating that the rent is not subject to challenge.

          The record in this case indicates that the owner was afforded 
          an opportunity to submit June 30, 1974 and post June 30, 1974 
          comparability data as outlined above but failed to submit usable 
          data.  The June 30, 1974 data submitted was incomplete as 
          apartments cited were still subject to rent control on June 30, 
          1974 or complete lines of apartments were not submitted.  The post 
          June 30, 1974 data submitted was either for apartments not rented 
          to a first stabilized tenant within one year of the renting of the 
          subject apartment to the tenant herein (May 10, 1981) or the owner 
          did not submit the required DC-2 Notice although directed to do 
          so or complete lines of apartments were not submitted.  
          Accordingly, the Rent Administrator correctly did not consider the 
          comparability data in determining the fair market rent of the 
          subject apartment.

          However, the Commissioner notes that a rent increase of 
          1/40th of the cost of the new equipment - $17.71 (1/40th of 
          $708.48) should have been added to the initial legal regulated 
          rent of $564.42 making the initial legal regulated rent $582.13 
          effective May 10, 1981 to June 30, 1983.  The owner is then 
          entitled to a 10% Guideline 14 increase for a three year renewal 
          lease making the lawful stabilization rent $640.34 effective July 
          1, 1983 to June 30, 1986.  The total amount of excess rent 
          through January 1, 1985 (when the tenant stopped paying rent) 
          based on the foregoing is $19,472.80 including excess security of 
          $459.61.  The Rent Administrator's order is hereby modified to 
          reflect these findings.

          Because this determination concerns lawful rents only through 
          June 30, 1986, the owner is cautioned to adjust subsequent rents 
          to an amount no greater than that determined by this order plus 
          any lawful increases and to register any adjusted rents with this 
          order and opinion being given as the explanation for the 
          adjustment.

          If the owner has already complied with the Administrator's 



          order and there are arrears due to the owner as a result of the 
          instant determination, the tenant is permitted to pay off the 
          arrears in six equal monthly installments.  Should the tenant 
          vacate after issuance of this order or already have vacated, said 
          arrears shall be payable immediately.

          If the owner does not take appropriate action to comply with 







          BI 410289 RO
          this order within sixty days from the date of issuance of this 
          order, the tenant may credit the excess rent against the next 
          month(s) rent until fully offset.

          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, granted in part, and, that the order of the 
          Rent Administrator be, and the same hereby is, modified in 
          accordance with this order and opinion.  The total amount of 
          excess rent through January 1, 1985 is $19,472.80.

          ISSUED



                                                                        
                                          ELLIOT SANDER
                                          Deputy Commissioner




                     































    

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