BH130260RO
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. BH130260RO
: DRO DOCKET NO.Q3121481RT
BRIGHTON PROPERTIES TENANT: R. & A. ROMEO
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN
PART
On August 18, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on July
24, 1987, by the Rent Administrator, 10 Columbus Circle, New York,
New York, concerning the housing accommodations known as 70-11 108th
Street, Queens, New York, Apartment No. 4F, wherein the Rent
Administrator determined the fair market rent pursuant to an
apartment comparability study and the special fair market rent
guideline promulgated by the New York City Rent Guidelines Board for
use in calculating fair market rent appeals.
The Commissioner notes that this proceeding was filed 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 Administrative Appeal is being determined pursuant to the
provisions of Section 25 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order was
warranted.
The Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion of the record relevant to
the issue raised by the administrative appeal.
This proceeding was originally commenced in March, 1984 by the
tenants' filing of a fair market rent adjustment application and a
rent overcharge complaint. The tenants stated that they first moved
to the subject apartment on October 1, 1983 at a rental of $625.00
per month.
In response to the tenants' complaints, the owner stated that
the subject apartment was rent controlled immediately prior to
occupancy by the tenants herein.
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The owner was served with a fair market rent answer package and
afforded an opportunity to submit June 30, 1974 or post June 30,
1974 comparability data for determining the fair market rent of the
subject apartment. The owner was also informed that if the lease in
effect on June 30, 1974 for a comparable apartment was a vacancy
lease which began on or after January 1, 1974 proof of service on a
DC-1 Notice (Notice of Initial Legal Regulated Rent ) on the vacancy
tenant was required.
In answer, the owner indicated that apartments 3E, 6J, 2A, 5A,
5M, 2E, 6E, 3A, and 6L were not subject to rent control on June 30,
1974, and submitted June 30, 1974 rental data for the apartments in
the subject "F" line as well as for the E, H. I, J, A, B, L, and M
lines. The owner submitted Reports of Statutory Decontrol for eight
of the nine apartments not subject to rent control on June 30, 1974,
but did not submit DC-1 Notices for any of the apartments. The
owner also submitted a copy of the Forest Hills New York Times
classified adds for June 30, 1974 showing what the owner considered
comparable apartments.
In Order Number Q3121481RT, the Rent Administrator adjusted the
initial legal regulated rent by establishing a fair market rent of
$447.12 effective October 1, 1983. The fair market rent was
determined on the basis of the special fair market rent guideline
plus the average of the comparable apartments 3E, 6J, 2A, 5A, and
5M. In addition a $22.11 rent increase for improvements was
allowed. Apartments 2E, 6E, 3A, and 6L were excluded from the
comparability study because the owner had not submitted the required
proof of service of the DC-1 Notice. In addition, the Rent
Administrator found that the tenant had paid excess rent totalling
$8,626.47 and directed the owner to refund such excess rent to the
tenant.
In this petition, the owner alleges in substance that the
subject apartment is more desirable than some of the comparables
used because it is a front apartment and consideration should have
been given to this factor; that apartments 2E, 6E, 3A and 6L should
not have been rejected as comparables since the owner submitted
Reports of Statutory Decontrol for such apartments; that the New
York Times classified listings submitted by the owner should have
been taken into account in determining the fair market rent; and
that consideration should have been given to an affidavit submitted
by a local leasing corporation representative to the effect that the
amount charged the tenant herein was a fair rent.
The Commissioner is of the opinion that this petition should be
granted in part.
Section 25 of the Rent Stabilization Code provides in pertinent
part that a fair market rent appeal may be filed by the tenant of a
dwelling unit which was subject to the City Rent Law prior to July
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1, 1971 and was vacated between January 1, 1974 and June 30, 1974,
both dates inclusive.
Section 26 of the Rent Stabilization Code provides in pertinent
part that all tenants who are entitled to file a fair market rent
appeal pursuant to Section 25 shall be entitled to receive notice of
such rent together with a statement as to the right of appeal. Such
notice shall be served by the owner upon every such tenant by
certified mail.
In the instant case, the Reports of Statutory Decontrol
disclose that apartments 3A and 6E became vacant in November, 1973
and were not rerented until January, 1974. Accordingly, these
apartments do not meet the criteria for the filing of fair market
rent appeals pursuant to Section 25 since they were not vacated
between January 1, 1974 and June 30, 1974. Therefore the owner was
not required to serve DC-1 Notices and these apartments should have
been considered in the comparability study. As to apartments 2E and
6L, utilizing the June 30, 1974 rents for those apartments will
result in a lower average comparable rent so that these apartments
also should have been included in the comparability study. The
inclusion of these additional four apartments in the comparability
study makes the average rent of the comparable apartments on June
30, 1974 $215.97 rather than $214.60 as determined by the Rent
Administrator. This figure has been updated by annual guideline
increases up to the date of the tenant's initial lease term plus a
full allowance for the tenant's initial lease term resulting in a
current comparable rent of $504.21 rather than $500.94 as determined
by the Rent Administrator. The fair market rent is then determined
by averaging the result of the Special Guidelines test with the
result of the comparability study - $349.07(Special Guidelines) plus
$504.21 (comparability) divided by two equals $426.64 plus an
improvement increase of $22.11 resulting in a final fair market rent
of $448.75 rather than $447.12 as determined by the Rent
Administrator.
Taking these factors into account, the total excess rent
collected by the owner through July 31, 1987 is $8,547.33 rather
than $8626.47 as determined by the Rent Administrator. This amount
is determined as follows: Owner charged $625.00 from October 1, 1983
to September 30, 1985 when the initial legal rent was $448.75 - this
resulted in excess rent of $176.25 per month times 24 months equals
$4230. The owner charged $665.63 from October 1, 1985 through July
31, 1987 when the lawful stabilization rent was $477.92 (6 1/2
percent above $448.75 pursuant to a two year renewal lease under
Guideline 17) - this resulted in excess rent of $187.71 times 22
months equals $4129.62. Adding $4230 plus $4129.62 plus excess
security of $187.71 results in a total excess rent to be refunded to
the tenant of $8547.33.
With regard to the owner's other contentions, it is noted that
newspaper listings and affidavits from brokers cannot be used to
help determine the fair market rent of an apartment.
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If the owner does not take appropriate action to comply with
this order within sixty days from the date of issuance of this
order, the tenant may credit the excess rent against the next
month(s) rent until fully offset.
The owner is directed to reflect the findings and
determinations made in this order on all future registration
statements, including those for the current year if not already
filed, citing this order as the basis for the change. Registration
statements already on file, however, should not be amended to
reflect the findings and determinations made in this order. The
owner is further directed to adjust subsequent rents to an amount no
greater than that determined by this order plus any lawful
increases.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be, and
the same hereby is, granted in part, and, that the order of the Rent
Administrator be, and the same hereby is, modified in accordance
with this order and opinion. The total amount of excess rent
through July 31, 1987 is $$8547.33.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
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