DOCKET NO.: BK 410146 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.: BK 410146.RO
Arnold & Anne Gumowitz DRO DOCKET NO.:
CDR 31,574
TENANT: Janet Fletcher
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On November 9, 1987, the above-named petitioner filed a Petition
for Administrative Review against an order issued on October 9,
1987 by the Rent Administrator, 10 Columbus Circle, New York, New
York concerning the housing accommodation known as 10 Sheridan
Square, New York, New York, apartment 11A wherein the Administrator
determined that an overcharge had occurred and directed the owner
to refund $10,346.84 inclusive of excess security and interest on
the overcharge occurring on or after April 1, 1984.
The Commissioner has reviewed all of the evidence of record and has
carefully considered that portion of the record relevant to the
issues raised in the administrative appeal.
This proceeding was commenced on March 30, 1984 when the tenant
filed an overcharge complaint with the former New York City
Conciliation and Appeals Board, a predecessor agency to the DHCR.
The tenant stated she had taken occupancy of the subject apartment
on August 1, 1977 pursuant to a two year lease expiring on July 31,
1979 at a monthly rent of $450.00.
A copy of the complaint along with answer forms was served on the
prior and current owners.
In response, the current owner submitted a rental history from
August 1, 1977, the alleged base date, a copy of a Notice of
Maximum Collectible Rent (form N-26), and a lease history for the
period August 1, 1977 through July 31, 1987. The owner did not
submit substantiating documentation of the base rent date.
Pursuant to a Final Notice of Pending Default, the owner was
advised that its failure to substantiate the base rent date would
result in the determination of the legal stabilized rent in accord
with established default procedures.
DOCKET NO.: BK 410146 RO
In the order issued on October 9, 1987, the Administrator
determined that the owner had defaulted in providing a full rental
history, established the lawful stabilized rent at $576.09 as of
August 1, 1985 through July 31, 1987, and directed the owner to
refund overcharges of $10,346.84 inclusive of excess security and
interest on the overcharge occurring or after April 1, 1984.
In the appeal, the owner requests that the order be reversed. The
owner contends that the Administrator erred 1) in applying
Guidelines Order Number 9 to establish the first stabilized rent.
The Administrator should have applied the Special Guidelines rate
of 20% to the greater of the MCR (Maximum Collectible Rent) or the
MBR (Maximum Base Rent) to establish the base rent; 2) in
defaulting the owner because the owner had timely responded and
submitted required data which clearly substantiated the legality of
the rent being collected; and 3) in permitting the tenant to file
two separate overcharge complaints.
Although given the opportunity to do so, the tenant did not reply
to the petition.
The Commissioner is of the opinion that this petition should be
granted.
The evidence of record indicates that the tenant herein has
occupied the subject apartment since August 1, 1977 and may be the
first stabilized tenant. The owner has submitted some evidence,
i.e. form N-26, the notice of Maximum Collectible Rent: Effective
January 1, 1977, of the subject apartment's rent and rent
controlled status preceding the tenant's occupancy. However, the
owner did not submit proof of having served or filed a landlord's
Report of Statutory Decontrol (R-42) or of having served a DC-2
notice, either of which would have notified the tenant of the prior
rent controlled status of the apartment and of her right to
challenge the rent being charged. Accordingly, the overcharge
complaint correctly should have been processed as a fair market
rent appeal, thereby affording the tenant the opportunity to
challenge the fair market rent and the owner the opportunity to
prove the legality of the rent as being in compliance with fair
market directives.
The fair market rent is determined on the basis of two criteria: 1)
a special guideline order promulgated by the Rent Guideline Board,
and 2) rents generally prevailing in the same area for
substantially similar housing accommodations. The fair market
rent of the subject apartment is governed by Special Fair Market
Rent Guidelines Order Number 9 which permitted a 20% increase above
1976 Maximum Rents for apartments vacancy decontrolled between July
1, 1977 and June 30, 1978. The evidence of record reveals that the
DOCKET NO.: BK 410146 RO
1976 MBR was $417.76. An increase of 20% equals a total of
$501.31. Since the initial rent charged is less than could have
been charged with the use of only one criterion, it is unnecessary
to consider the comparability test to determine the legal rent.
The Commissioner notes that where the rent charged is less than the
amount that could have been charged, the rent charged is the legal
stabilized rent. Therefore, the commissioner finds that the
initial legal stabilization rent for the period August 1, 1977
through July 31, 1979 should be $450.00 and that there was no
overcharge.
The Commissioner notes that the owner suffered no adverse effect by
the filing of two complaints and that the overcharge complaint
filed in conjunction with the registration objection was dismissed.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is
ORDERED, that the legal stabilization rent as of August 1, 1977
through July 31, 1979 be established, and hereby is, at $450.00;
and, it is
FURTHER ORDERED, that this petition be, and the same hereby is,
granted, and the Rent Administrator's order be revoked.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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