Docket Number: BH410368-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

        ------------------------------------X 
        IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
        APPEAL OF                              DOCKET NO.: BH 410368-RO
                                            :  
             241 REALTY ASSOCIATES,            DRO DOCKET NO.: U  3124291-RT
           
                              PETITIONER    : 
        ------------------------------------X                           
          
          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW, 
        IN PART AND REMANDING PROCEEDING TO THE DISTRICT RENT ADMINISTRATOR

        On  August  21,  1987,  the  above-named  petitioner-owner  filed  a
        Petition for Administrative Review against an order issued on  April
        1, 1987, by the District Rent Administrator, 10 Columbus Circle, New 
        York, New York, concerning housing accommodations known as Apartment 
        No. 44 at 241 West 110 Street,  New  York,  New  York,  wherein  the
        District Rent Administrator determined  that  the  tenant  had  been
        overcharged.

        The  record  in  this  case  indicates  that   the   copy   of   the
        Administrator's order which was sent to the owner  was  sent  to  an
        incorrect address and was returned to the DHCR by  the  post  office
        because of an insufficient address.  The owner states that it  first
        received a copy of the Administrator's order on July 29,  1987  from
        the tenant's attorney during the course of a court proceeding.   The
        Commissioner therefore finds  that  the  owner's  petition  will  be
        accepted as timely filed.

        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
        issue raised by the administrative appeal.

        This proceeding was originally commenced on March 14,  1984  by  the
        filing of a fair market rent appeal and a rent overcharge  complaint
        by the tenant with the New York City Conciliation and Appeals  Board
        (CAB), one of the predecessor agencies to the DHCR.  The tenant took 







          Docket Number: BH410368-RO
        occupancy pursuant to a lease commencing April 1, 1982 and  expiring
        May 31, 1985 at a monthly rent of $310.00.  The tenant stated in his 
        application that he had not  received  a  notice  of  initial  legal
        regulated rent (DC-2 notice) from the owner.

        The following notices were sent to the owner during  the  course  of
        the processing of this case:

                  1)  Notice dated March 23, 1984 from the CAB 
             advising the owner that an overcharge complaint had
             been filed by the tenant, that, after docketing of 
             the complaint, the owner would be mailed a copy of the 
             complaint and afforded an opportunity to respond 
             thereto and that rent records from the base date 
             would be required.
                                                                             
                  2)  Notice dated January 18, 1985 advising the
             owner that the tenant had filed a fair market rent
             appeal application and requesting proof of service
             of a DC-2 notice or apartment registration form.               

                  3)  Notice dated August 19, 1985 consisting of
             an owner's fair market rent appeal package.  This 
             notice was returned to the DHCR marked "moved-not
             forwardable."

                  4)  Notice dated August 27, 1986 advising the
             owner that the tenant had filed both a fair market
             rent appeal application and an overcharge complaint,
             requesting proof of service of a DC-2 notice, and
             advising the owner that if it failed to submit such
             notice and proof of service the DHCR would continue
             to process the tenant's fair market rent appeal.

                  5)  Final Notice of Pending Default dated 
             November 5, 1986 advising the owner that rent records
             from the base date, as well as documentation of the 
             base date if after September 1, 1984, were required;
             for the tenant's overcharge complaint.  The notice
             afforded the owner a final opportunity to comply and 
             advised the owner that failure to submit the required 
             records would result in the application of the default 
             procedure.  This notice was returned to the DHCR marked 
             "moved-left no address."

        In the order under appeal herein, the  District  Rent  Administrator
        determined the lawful stabilized rent using  the  default  procedure
        based on the owner's failure to submit the  required  rent  records,
        determined that the tenant had been overcharged  in  the  amount  of
        $16,391.13, including treble damages on  the  overcharges  collected
        after April 1, 1984, and directed the owner to  refund  said  amount
        to the tenant as well as to reduce the rent.







          Docket Number: BH410368-RO
        In this petition,  the  owner  contends  that  the  only  notice  it
        received regarding this matter was the January 18, 1985 notice which 
        indicated solely that the  tenant  had  filed  a  fair  market  rent
        appeal; that the owner never received a request for prior leases  as
        stated by the Administrator in his order; that the owner was not  in
        default but filed an answer  to  the  January  18,  1985  notice  on
        February 11, 1985; that  the  owner  was  never  informed  that  the
        tenant's fair market rent appeal had been converted to an overcharge 
        complaint; that the Administrator had no basis  for  converting  the
        complaint or presuming that the owner was aware of  the  conversion;
        that had the owner been  notified  that  the  tenant  had  filed  an
        overcharge complaint and that it was required to  submit  copies  of
        prior leases, it would have complied; and that the  tenant  was  not
        overcharged and the tenant's complaint  should  be  dismissed.   The
        owner submits with its petition a copy  of  its  February  11,  1985
        answer and a signed certified mail receipt.  This answer listed  the
        owner's new address and indicated that the January 18,  1985  notice
        had been sent to the owner's old address.  The owner  enclosed  with
        the answer a copy of the 1984  apartment  registration  form  and  a
        certificate of  mailing  from  the  Rent  Stabilization  Association
        indicating mailing on June 29, 1984.  In its answer the  owner  also
        requested to be advised if any other data was required and indicated 
        that the tenant's challenge was improper because the  tenant  failed
        to allege that the rent was in excess of the fair market rent.   The
        owner also submits with its petition a copy of a  Landlord's  Report
        of Statutory Decontrol indicating that  the  subject  apartment  was
        vacated on May 1, 1981 and rented on June 6, 1981 and a copy of  the
        prior tenant's lease commencing June 1, 1981 and  expiring  June  5.
        1984 at a monthly rent of $275.00.

        The Commissioner is of the opinion  that  this  petition  should  be
        granted in part.

        The record in this case indicates that the owner submitted an answer 
        to the January 18,  1985  notice  which  was  not  received  by  the
        Administrator in which the owner advised the  Administrator  of  its
        new address.  The record further indicates that all notices  to  the
        owner in this case were mailed to  the  owner's  old  address.   The
        Final Notice of Pending Default dated November 5,  1986,  which  was
        the only notice to  the  owner  which  specifically  requested  rent
        records from the base date, was returned to the DHCR mark d  "moved-
        left  no  address."   The  Commissioner  therefore  finds  that  the
        application of the  default  procedure  was  inappropriate  and  the
        rental  history  documentation  submitted  by  the  owner  with  its
        petition as well as the owner's February 11, 1985 answer, should  be
        considered at this time.

        Section 25 of the Code provides  that  a  fair  market  rent  appeal
        application may be filed by the tenant of  an  apartment  which  was
        subject to rent stabilization or rent control prior to July 1,  1971
        and was vacated between January 1, 1974  and  June  30,  1974,  both
        dates inclusive, or of  an  apartment  which  was  subject  to  rent
        control on June 30, 1974 and vacated thereafter.







          Docket Number: BH410368-RO
        Section 25 of the Code further 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 Code provides that said notice shall be served by the  owner  on
        the tenant by certified mail.

        The rental documentation submitted by the owner,  which  includes  a
        Landlord's Report of Vacancy Decontrol which is corroborated by  the
        DHCR's rent control records, indicates that a prior tenant who  took
        occupancy on June 1, 1981 was the first rent  stabilized  tenant  to
        occupy the subject apartment after vacancy decontrol  and  that  the
        applicant was the next tenant to occupy the apartment thereafter.

        The Commissioner finds that the tenant's  fair  rent  market  appeal
        application is not materially  defective  because  of  the  tenant's
        failure to allege that the initial rent  exceeded  the  fair  market
        rent for the subject apartment.  Such allegation is implicit in  the
        filing of a fair market rent appeal.

        The tenant is his application stated that he did not receive a  DC-2
        notice from the owner and the owner has not alleged service of a 
        DC-2 notice on the tenant or the prior tenant.  It is noted that the 
        apartment registration form was served on the tenant after he  filed
        his fair market rent appeal application.  The Commissioner therefore 
        finds that the proceeding should be remanded  to  the  Administrator
        for processing of the tenant's fair market rent  appeal.   The  fair
        market rent appeal package which  was  sent  to  the  owner  by  the
        Administrator was returned to the  DHCR  by  the  post  office.   On
        remand, the Administrator should  reserve  the  owner  with  a  fair
        market rent appeal package at the owner's current address.

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

        ORDERED, that this petition be and the same hereby  is  granted  and
        the proceeding be and the same hereby is remanded  to  the  District
        Rent Administrator for further processing in  accordance  with  this
        order and opinion.  The automatic stay of so much  of  the  District
        Rent Administrator's order as directed a refund is hereby  continued
        until  a  new  order  is   issued   upon   remand.    However,   the
        Administrator's determination as to the rent is not stayed and shall 
        remain in effect, except  for  any  adjustments  pursuant  to  lease
        renewals, until the Administrator issues a new Order upon remand.

        ISSUED:




                                                                      
                                        ELLIOT SANDER
                                        Deputy Commissioner


                                                   
         
    

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