OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          -------------------------------------X   ADMINISTRATIVE REVIEW
          APPEAL OF
                                                   RENT ADMINISTRATOR'S
                                                   DOCKET NO.:  UC00003OH



          On June 18, 1987 the above named petitioner-owner timely filed a 
          petition for administrative review (PAR) against an order issued on 
          May 15, 1987, by a Rent Administrator (Gertz Plaza) concerning the 
          housing accommodations known as 900 West 190th Street, New York, 
          New York, various apartments, wherein the Rent Administrator denied 
          the owner's application for rent increase pursuant to the 
          alternative hardship provisions of Section 26-511 c(6-a) of the 
          Rent Stabilization Law and Section 2522.4 of the Rent Stabilization 

          The order of the Rent Administrator, appealed herein, decreased 
          claimed operating expenses by $9,000.00 to correct a mathematical 
          error made in the application and increased the total claimed 
          rental income from rent stabilized apartments by $20,000.00.  These 
          adjustments resulted in a ratio of operating expenses to income of 
          93.67 percent which is below the 95 percent threshold to qualify 
          for an alternative hardship rent increase.

          In this administrative appeal the petitioner-owner contends, in 
          substance, that the Administrator's order is in error to the extent 
          that $20,000.00 was added to the owner's claimed rental income.

          Numerous tenants responded to the owner's petition objecting to the 
          proposed hardship increase and stating that the building had been 
          converted to a co-operative ownership on December 29, 1986; and 
          that the owner is deriving income from a garage operation and from 
          management fees received by its subsidiary.

          After a careful consideration of the entire evidence of record, the 
          Commissioner is of the opinion that this petition should be denied.

          ADMIN REVIEW DOCKET NO. BF-410426-RO

          In order for an owner to qualify for a rent increase pursuant to 
          the "Alternative Hardship" provisions of the Rent Stabilization Law 
          and Code, it is incumbent upon an owner to establish that the 
          standard rent guidelines adjustments are insufficient for the 
          property to maintain an annual gross income level which exceeds the 
          allowable annual operating expenses by an amount equal to at least 
          five percent of such annual income.  The Rent Administrator has the 
          inherent duty to ascertain the validity of the submissions made in 
          any application filed pursuant to Section 2522.4 of the Rent 
          Stabilization Code.

          In regard to the owner's petition, the Commissioner notes that in 
          the instant application the stabilized rental income for the 
          calendar year of 1984 claimed by the owner is $1,053,038.00.  The 
          Rent Administrator reviewed the financial statement submitted by 
          the owner from which the above mentioned figure was derived and 
          correctly adjusted the amount of the rent stabilized income to 
          include an additional $20,000.00.  The aforementioned financial 
          statement, Note E- Rent Stabilization Settlement provides that the 
          owner had refunded, to rent stabilized tenants a total of 
          $231,000.00 in excess rent and security deposits collected pursuant 
          to a settlement with the Office of the Attorney General of which 
          $20,000.00 was credited to stabilized tenants during the 1984 
          calendar year.  Section 2522.4(c) of the Rent Stabilization Code 
          states that the annual gross rental income collectible shall 
          consist of the actual income receivable per annum arising out of 
          the operation and ownership of the property including but not 
          limited to the rental income from housing accommodations.  In this 
          regard the Commissioner notes that rental income collected must be 
          consistent with lawful guideline levels; that refunds or credits of 
          excess rent or overcharges collected do not constitute a normal 
          recurring item qualifying as a deduction from rental income; and 
          that an owner may not receive the benefit of a hardship rent 
          increase as a consequence of having been required to refund or 
          credit monies collected in prior years in excess of the lawful 
          stabilized rent. 


          ADMIN REVIEW DOCKET NO. BF-410426-RO

          The Commissioner finds that the Administrator properly determined 
          that the applicable rent guideline increases established under the 
          Rent Stabilization Law are sufficient to maintain an annual gross 
          rental income collectible from the subject premises by an amount 
          that exceeds the annual operating expenses equal to at least five 
          percent of such annual income.  

          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          it is 

          ORDERED, that this petition be, and the same hereby is, denied; and 
          that the Rent Administrator's order be, and the same hereby is, 


                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner



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