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 
          APPEAL OF                          ADMINISTRATIVE REVIEW
                                             DOCKET NO. BF-410195-RT
                    Lisa Cohen,              DISTRICT RENT ADMINISTRATOR'S
                                             DOCKET NO. L311154OR


                                   PETITIONER
          --------------------------------------x
           
          ORDER AND OPINION REMANDING PROCEEDING TO THE RENT ADMINISTRATOR

          The above-named tenant filed a petition for administrative review 
          ("PAR") of an order issued on April 24, 1987 by a  District  Rent
          Administrator concerning  the  housing  accommodations  known  as
          Apartment 8, 240 East 13th Street, New York,  New  York,  wherein
          the District Rent Administrator  determined  that  there  was  no
          overcharge.

          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 March 31, 1984, and the  issues  are  being  determined
          pursuant thereto.

          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 petition for review.

          On January 30, 1984, the subject  tenant,  Lisa  Cohen,  filed  a
          complaint of rent overcharge with the New York City  Conciliation
          and Appeals Board ("C.A.B."), the agency  formerly  charged  with
          enforcement of the  Rent  Stabilization  Law.   The  tenant  took
          occupancy on June 1, 1982 of an initial rent of $590.00.

          Docket No. BF-410195RT - 2 -              



          On April 1, 1984, responsibility for the administration  of  rent
          stabilization in New York City was transferred to the New York 






          State Division of Housing and Community Renewal.

          On October 31,  1984,  the  Division  of  Housing  and  Community
          Renewal served a copy of the tenant's complaint  upon  the  owner
          and demanded that the owner submit copies of all leases  or  rent
          ledgers in effect since the  apartment's  base  date  (i.e.,  the
          date that the apartment became subject to rent stabilization).

          The owner's answer, dated November 7,  1984,  asserted  that  the
          subject apartment was under rent control prior to the complaining 
          tenant's occupancy; that the complaining tenant was  served  with
          an R-42 form and  a  DC-2  form  on  July  15,  1982,  and  that,
          therefore, the time to challenge the rent had expired.  The owner 
          attached the above-mentioned R-42 and DC-2 forms to its answer.

          The owner also asserted that $4,343.25 was  spent  on  renovating
          the subject apartment.

          The tenant's response to the  owner's  answer,  dated  March  29,
          1985, alleged that an  illegal  "finder's  fee"  of  $885.00  was
          collected by the broker.  The reason  given  by  the  tenant  was
          that the broker and the landlord are married; that they share the 
          same office and telephone, and they  were  engaged  in  a  single
          business entity.

          On September 6, 1986 the Administrator mailed  to  the  tenant  a
          request for copies of the cancelled check  and  receipt  for  the
          finder's fee.

          In a letter dated December 2, 1986, the tenant  stated  that  she
          was not in possession of the check, because  it  was  written  by
          the complaining tenant's former co-tenant.   The  tenant  further
          stated that diligent efforts were being made to locate the check.

          In the order under review herein, the  Administrator  found  that
          there was no rent overcharge,  and  that  the  tenant  failed  to
          substantiate the collection of the broker's fee.

          In the petition for administrative review the tenant asserts that 
          the administrator failed to determine whether the initial rent of 
          $590.00 per month was the legal regulated rent  for  the  subject
          apartment, and that the Rent Administrator failed to  review  the
          rental  history  of  the   subject   apartment   prior   to   the
          complainant's  occupancy.   Also,  the  tenant   reiterates   her
          assertion that the owner  collected  an  illegal  "finder's  fee"
          because the owner and the broker are a single business entity.


          Docket No. BF410195RT         - 3 -

          The owner's answer, dated November 17,  1987,  asserts  that  the
          petition  should  be  dismissed  for  untimeliness,  because,  it
          asserts, it was  filed  more  than  thirty-five  days  after  the
          issuance of the Administrator's order.  The owner states that the 
          complainant was  the  first  stabilized  tenant  of  the  subject
          apartment at the commencement of her tenancy, on  June  1,  1982,
          and therefore D.H.C.R. cannot determine an  overcharge  complaint
          as to the initial regulated rent.  As to the  collection  of  the
          alleged illegal "finder's fee," the owner points out that it  did
          not own the building  at  the  time  the  tenant  initially  took






          occupancy, and therefore could not  have  collected  a  "finder's
          fee."  Additionally, the owner  asserts  that  the  tenant  never
          substantiated her allegation of paying a "finder's fee."

          With regard to the  issue  of  the  timeliness  of  the  tenant's
          petition, the rent agency, by letter  dated  February  28,  1991,
          requested that the tenant submit proof of the  timely  filing  of
          the petition.

          The tenant's response, dated March  15,  1991,  states  that  the
          petition was mailed on May 29, 1987, which was  thirty-five  days
          after the issuance of the  Administrator's  order,  and  that  it
          therefore was filed timely.   The  tenant  points  out  that  May
          29th, 1987 was the Friday before the  Memorial  Day  weekend  and
          suggests that that is the reason why D.H.C.R.  noted  receipt  of
          the PAR in June of 1987.

          In a letter to  the  owner  dated  May  15,  1991,  the  D.H.C.R.
          attached a copy of the tenant's response, and afforded the  owner
          ten days from the date of the letter to submit a reply.

          The owner did not submit a reply.  

          On  June  25,  1991,  D.H.C.R.  mailed  a  letter  to  the  owner
          requesting  proof  of  service  of  the  DC-2   form   upon   the
          complainant.

          The owner submitted an affidavit by Jane Mark, President  of  Jed
          Management Corporation, which owned the subject premises  at  the
          time of the complainant's initial  occupancy,  stating  that  she
          personally served the tenant the DC-2 form, and attached the DC-2 
          form to her affidavit.

          The tenant submitted her response to the affidavit  on  September
          3, 1991.  The complainant states that she was not served  with  a
          DC-2 form, nor did she sign or initial a DC-2 form.  Furthermore, 
          the tenant points out that the owner did not submit  a  certified
          mail receipt or any  document  with  her  initials  or  signature
          indicating receipt of the DC-2 form.



               Docket NO. BF410195RT    - 4 -

          After careful consideration, the Commissioner is of  the  opinion
          that this proceeding should be remanded to the Rent Administrator 
          for further processing.

          The Commissioner finds  that  the  tenant's  petition  was  filed
          timely.  In view of the fact that the tenant  has  asserted  that
          the petition  was  mailed  on  the  thirty-fifth  day  after  the
          issuance of the Administrator's order; that  the  owner  has  not
          submitted any evidence to the contrary; and that the post-mark on 
          the envelope, in which the  petition  was  mailed,  is  partially
          illegible, the Commissioner is of the  opinion  that  the  tenant
          mailed the petition on May 29, 1987 (thirty-five days  after  the
          issuance of the Administrator's order), and was therefore timely.

          The Commissioner notes that the subject apartment had been  under
          rent control immediately prior to  the  complainant's  occupancy.






          As  the  complainant  is  the  initial  stabilized  tenant,   the
          Commissioner is of the opinion that  this  proceeding  is  to  be
          processed as a fair market rent appeal (F.M.R.A.).

          Section 25 of the former Rent Stabilization Code provides that  a
          fair market rent appeal application must be filed within 90  days
          of receipt of the  initial  legal  regulated  rent  notice  (DC-2
          notice). Section 26 of the former Code provides that  the  notice
          shall be served by the owner on the tenant by certified mail.

          The Commissioner finds that the owner failed to meet  its  burden
          of proof in establishing that the DC-2 notice was served  on  the
          tenant.

          The owner has not submitted adequate proof of service of the DC-2 
          form on the tenant.  The former owner's  affidavit  asserts  that
          the DC-2 form was personally served on the tenant rather than  by
          the means set forth in the code.   However,  the  owner  did  not
          produce further evidence of personal service, e.g., a signed DC-2 
          form by the tenant indicating receipt.  As the tenant has  denied
          receiving the DC-2 notice, and the owner  has  failed  to  submit
          sufficient additional evidence that the former owner  served  the
          tenant, the Commissioner finds that the  tenant  was  not  served
          with a DC-2 notice.  The Commissioner further finds that t e  90-
          day statutory time period for filing the appeal never started  to
          run and that the tenant is  entitled  to  challenge  the  initial
          legal regulated rent.   

          As the Administrator did not determine whether the  complainant's
          initial rent exceeded the fair market rent, the  Commissioner  is
          of the opinion that this proceeding should  be  remanded  to  the
          Administrator for a determination of this issue.

          In  addition,  the  Commissioner  is  of  the  opinion  that  the
          Administrator is to give the  tenant  a  further  opportunity  to
          produce the alleged cancel check  and  receipt  for  the  alleged
          Docket No.BF-410195-RT        - 5 -

          "finders's fee," and the issue of the collection  of  an  illegal
          "finder's fee" may also be determined by the Administrator  

          Therefore,  in  accordance  with  the  provisions  of  the   Rent
          Stabilization Law and Code, it is 

          ORDERED, that  this  proceeding  be,  and  the  same  hereby  is,
          remanded to the Rent Administrator to process this case as a Fair 
          Market Rent Appeal.  The previously issued order remains in  full
          force and effect until a new order is issued on remand.

          Issued:
                                                                          
                                             Elliot Sander
                                             Deputy Commissioner 
    

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