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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.: BJ 410211 RO
41 FIFTH AVENUE ASSOCIATES-OWNER,
DRO DOCKET NO.: TC-082386-G/
CDR 31,192
TENANT: SHIRLEY M. ARBESFELD
PETITIONER
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ORDER AND OPINION REMANDING PROCEEDING FOR FURTHER
PROCESSING
On September 30, 1987, the above-named petitioner filed a
Petition for Administrative Review against an order issued on
August 26, 1987 by the Rent Administrator, 10 Columbus Circle,
New York, New York concerning the housing accommodations known as
41 Fifth Avenue, Apartment 7B, New York, New York, wherein the
Administrator established the lawful stabilization rent and
directed that overcharges in the amount of $27,479.71 be
refunded.
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 Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion of the record relevant
to the issues raised by the administrative appeal.
This proceeding was commenced by the filing in March 1984 of a
rent overcharge complaint by the tenant.
The owner was served with a copy of the complaint and was
directed to submit a complete rental history for the subject
apartment.
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In response, the owner submitted leases dating from July 1, 1979
and a copy of a 1978 notice of compensatory rent and labor cost
adjustment to indicate the prior rent controlled status of the
subject apartment. The owner stated that the base rent date was
July 1, 1979. In September 1986, the owner was sent a Notice of
Pending Default affording it an opportunity to submit a complete
rental history including documentation, either the DC-2 Notice
served on the first stabilized tenant with proof of service, or
the landlord's report of statutory decontrol, to substantiate the
Base Rent Date for the subject apartment.
In response the owner stated that the date of decontrol was not
at issue and referred the Administrator to the Division's own
records. The owner did not submit the requested proof of the
date of decontrol.
On June 30, 1987, the Division again requested documentation to
substantiate the Base Rent Date. The owner was notified that
failure to reply could result in a default.
On July 16, 1987, the owner reiterated the previous response and
did not submit the requested documentation.
In Order Number 31,192 the Administrator determined that due to
the owner's failure to submit a complete rental history, an
overcharge had been collected and directed the owners, present
and prior, to refund $27,479.71 inclusive of excess security and
interest on that portion of the overcharge occurring on and after
April 1, 1984.
In this petition, the owner contends in substance that it did
submit a complete rental history, that the Administrator was
obligated to search the Division's records prior to finding the
owner in default, that the present owner was prejudiced by the
Administrator's failure to serve the prior owner who presumably
would have submitted the required documentation, and that the
present owner obtained the subject building on March 16, 1983 and
therefore was not responsible for any overcharges occurring prior
to that date.
In reply to the petition, the tenant contends that the rent
overcharge was a wilful act and therefore the Administrator's
order should be affirmed.
The Commissioner is of the opinion that this petition should be
granted to the extent of remanding the proceeding for processing
as a Fair Market Rent Appeal.
Section 25 of the former Rent Stabilization Code provides, in
pertinent part, that an application to adjust the Initial Legal
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Regulated Rent on the grounds that it exceeds the Fair Market
Rent of a dwelling subject to rent control on June 30, 1974 and
vacated thereafter, may be made by the first tenant in occupancy
after such first vacancy. Proof of service of the notice of
initial legal regulated rent establishes the tenant's right to
appeal and the time limit within which such appeal must be filed.
The tenant must file the appeal, if at all, within ninety (90)
days of receipt of the notice of initial legal regulated rent
(DC-2 Notice). However, if an owner cannot prove service of the
DC-2 notice on a prior stabilized tenant, a subsequent stabilized
tenant can file a Fair Market Rent Appeal.
The evidence of record including the owner's submission of the
Notice of Compensatory Rent and Labor Cost Adjustment establishes
that the subject apartment was rent controlled prior to 1979 and
that the first rent stabilized tenant commenced occupancy on July
1, 1979.
However the owner herein incorrectly contends that since the
tenant concurred with the base date asserted by the owner, it was
not required to submit substantiating documentation. Despite the
complainant's apparent concurrence, it was incumbent upon the
owner to submit proof that a DC-2 notice was served on a prior
stabilized tenant. In the absence of such proof, the
Commissioner finds that this proceeding should be remanded for
processing as a Fair Market Rent Appeal.
The Commissioner notes that the issue of apportioning
responsibilities for the refund will be appropriately attended
to when the Fair Market Rent Appeal is determined.
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 Rent
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Administrator for further processing in accordance with this
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Order and Opinion. The automatic stay of so much of the Rent
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Administrator's order as directed a refund is hereby continued
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until a new order is, issued upon remand. However, the
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Administrator's determination as to the rent is not stayed and
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shall remain in effect except for any adjustments pursuant to
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lease renewals, until the Administrator issues a new order.
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ISSUED:
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JOSEPH A. D'AGOSTA
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Deputy Commissioner
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