BJ 410211 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.: BJ 410211 RO

            41 FIFTH AVENUE ASSOCIATES-OWNER,
                                                  DRO DOCKET NO.: TC-082386-G/
                                                                  CDR 31,192

                                                  TENANT:  SHIRLEY M. ARBESFELD
                                  PETITIONER
          ----------------------------------X                                   


                 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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          BJ 410211 RO

          JOSEPH A. D'AGOSTA






          BJ 410211 RO

          Deputy Commissioner








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