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

      APPEAL OF                                 ADMINISTRATIVE REVIEW
                                            :   DOCKET NO. BK 410149-RT
                FRANK HEFTER,                   DISTRICT RENT ADMINISTRATOR'S
                                            :   DOCKET NOS. 7MBC00332-M
                             PETITIONER                     (7M10569-M)


      On November 12, 1987, the above-named tenant timely filed a petition for 
      administrative review of an order issued on June 10, 1987 by a Rent 
      Administrator concerning the housing accommodation known as Apartment 3-B, 
      38 East 75th Street, New York, New York.

      This proceeding was initiated by the rent agency issuing an order on April 
      1, 1987, under Docket No. 7M10569-M, which denied the establishment of the 
      1986-1987 maximum base rents (MBR) for the subject building on the grounds 
      that the landlord, "failed to properly certify to the required expenditure 
      level for operation and maintenance of the subject building and maintenance 
      of essential services."

      On May 4, 1987, the subject landlord filed the required "Operation and 
      Maintenance and Essential Services Certification" for the 1986-1987 MBR, in 
      which the subject landlord listed the subject building as having nineteen 

      On June 10, 1987, the Administrator issued the order under review herein 
      which determined that the subject landlord "has met the prescribed violation 
      certification requirements for current MBR increases"; that the MBR 
      effective date was September 1, 1987, and that the rent agency's earlier 
      order, under Docket No. 7M10569-M, was revoked.  Attached to the order under 
      review herein was the "Final Computed Order of Eligibility - Maximum Base 
      Rent 1986 - 1987," which determined that the effective date of the order was 
      May 1, 1986; that "Failure to serve this Order and appropriate Notice with 
      attachments, if any, within 60 days of either the issue date of this Order 
      or of its effective date, whichever is later, causes this increase to be 
      collectible prospective only," and that the above-mentioned order of 
      eligibility listed the subject building as containing fifteen rooms, nine 
      apartments and five floors above street level for purposes of calculating 
      the 1986 - 1987 MBR for the subject building.


          DOCKET NO.: BK 410149-RT

      The tenant's petition asserts, among other things, that the subject tenant 
      did not receive the order under review herein, and the "Final Computed Order 
      of Eligibility," until October 13, 1987; that the subject tenant did not 
      receive prior notice that the landlord was applying for eligibility into the 
      MBR system or notice that the landlord was applying for an MBR increase; 
      that if the service of the aforementioned orders is deemed to be proper then 
      the MBR increase should be prospective only; that the subject building 
      contains eight apartments that are rented to tenants, and the landlord's 
      apartment which is either a duplex or a triplex; that there are no tenants' 
      apartments on the ground floor and the subject building has only four 
      floors; that there are no two-room apartments except for the landlord's 
      apartment; that all of the tenants' apartments contain only one room; that 
      the total room count of fifteen used in the "Final Computed Order of 
      Eligibility" to calculate the building's 1986-1987 MBR is incorrect; that 
      the subject tenant disputes the description of the "Annual Payroll" as 
      "normal" as the tenant alleges that there is no full-time janitor or 
      superintendent who lives in or near the building; that the tenant asserts 
      that there is a diminution of services in the subject building, and that the 
      tenant states that "since the room count and total apartment number are 
      falsely states, the derivative MBR figures for both 1986 - 1987 are 
      incorrect and no rent increases are warranted based upon this application by 
      the landlord."

      On January 6, 1988, the subject landlord filed his answer to the tenant's 
      petition, which asserts, among other things, that the aforementioned orders 
      were served on the subject tenant within sixty days of their issuance dates; 
      that the subject apartment and Apartment 4-B should have been listed as one- 
      room apartments and not two-room apartments, "thereby reducing the total 
      number of rooms from 15 to 13"; that the landlord asserts that his mistake 
      in calculating the room count does not affect his eligibility to collect MBR 
      increases; that there is no record of violations in the subject building; 
      that the subject building has five floors, and nine apartments, including 
      the landlord's apartment; that the landlord asserts that as the building's 
      Certificate of Occupancy lists nine apartments for the subject building and 
      both the landlord and the managing agent reside in the subject building, the 
      landlord is not required to provide a full-time resident superintendent; 
      that the landlord's payroll is a "normal payroll building," and that the 
      subject tenant has two air conditioners in his apartment and therefore an 
      additional $10.00 should be added to the tenant's rent.

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

      As the subject landlord and tenant both concede that the subject apartment 
      contains one room, the Commissioner finds that the subject apartment 
      contains one room.

      The Commissioner finds that in calculating the building's 1986-1987 MBR it 
      was proper for the Administrator to have counted the landlord's apartment in 
      determining the building's total number of apartment.  The Commissioner 
      notes that even if the landlord's apartment were a duplex or a triplex 
      apartment, as the tenant alleges, the landlord's apartment would still count 
      as only one apartment for the purpose of calculating the building's MBR.

      Accordingly, the Commissioner finds that for purposes of determining the 
      building's 1986-1987 MBR, the building contains nine apartments.

          DOCKET NO.: BK 410149-RT

      As the subject building contains nine apartments, and it is undisputed by 
      the parties to this proceeding that the landlord resides in the subject 
      building, the Commissioner finds, pursuant to Section 83 of the Multiple 
      Dwelling Law , that the landlord is not required to have a superintendent 
      residing on the premises.

      Pursuant to Section 2201.4 of the Rent and Eviction Regulations, "a building 
      shall be deemed to be a 'normal payroll building' if the expenses for labor, 
      including wages and fringe benefits for all employees engaged in operation, 
      maintenance and service of the building, do not exceeds $300 per year times 
      the number of housing accommodations in the building."

      As the subject landlord had alleged on his "Operation & Maintenance and 
      Essential Services Certification" for the 1986-1987 Maximum Base Rents that 
      the subject building is a "Normal Payroll Building," and the subject tenant 
      has not submitted any evidence to the contrary, the Commissioner finds that 
      the subject building should be deemed to be a "normal payroll building."

      The Commissioner notes that the record reflects that the subject landlord 
      has met the prescribed violation certification requirements for the 
      building's 1986-1987 MBR cycle.

      As to the diminution of services alleged by the tenant, the Commissioner is 
      of the opinion that the tenant's remedy is to file a complaint with the rent 
      agency for a reduction of rent.

      Accordingly, the Commissioner finds that the Administrator's determination 
      that the subject landlord is eligible for an increase in the building's 
      1986-1987 MBR should not be disturbed.

      The Commissioner notes that on the aforementioned "Operation & Maintenance 
      and Essential Services Certification," the landlord listed the subject 
      building as having nineteen rooms, and on the aforementioned "Final Computed 
      Order of Eligibility," the subject building was listed as having fifteen 
      rooms.  Furthermore, the Commissioner notes that the subject landlord in his 
      answer to the tenant's petition asserts that in applying for his 1986-1987 
      MBR increase he mistakenly listed the subject tenant's apartment and 
      Apartment 4-B as having two rooms, and in this proceeding the subject tenant 
      and landlord admit that both of the above-mentioned apartments contains only 
      one room each.

      Accordingly, as there is a discrepancy in the record as to the number of 
      rooms in the subject building, the Commissioner finds that this proceeding 
      should be remanded to the Administrator for the purpose of determining the 
      number of rooms in the subject building.

      The Commissioner further notes that there is a dispute as to the number of 
      floors in the subject building, as the tenant asserts that the subject 
      building contains four floors, and the subject landlord asserts that the 
      subject building contains five floors.

      Accordingly, as there is a dispute as to the number of floors in the subject 
      building, the Commissioner finds that the Administrator should also 
      determine the number of floor in the subject building, and to determine 
      which floor the subject tenant resides on.

      The Commissioner is of the opinion that the Administrator should recalculate 
      the building's 1986-1987 operating and maintenance expenses, and the 

          DOCKET NO.: BK 410149-RT
      building's 1986-1987 MBR after the Administrator has determined the number 
      of rooms and floors in the subject building.

      The Commissioner notes that in the order under review herein, there are two 
      different dates listed for the MBR effective date, May 1, 1986, and 
      September 1, 1987.

      Accordingly, the Commissioner finds that as there were two conflicting 
      effective dates for the 1986-1987 MBR, the Administrator should determine 
      the effective date for the subject buildings's 1986-1987 MBR.

      The Commissioner notes that there is a dispute as to when the order under 
      review herein, and the "Final Computed Order of Eligibility" were served on 
      the tenant.

      Accordingly, the Commissioner finds that the Administrator should give the 
      parties to this proceeding an opportunity to submit evidence to substantiate 
      their allegations as to when the above-mentioned orders were served on the 
      subject tenant.

      Furthermore, after the Administrator determines the date when the subject 
      tenant was served with the aforementioned orders, the Commissioner finds 
      that the Administrator should, pursuant to the terms and conditions of the 
      "Final Computed Order of Eligibility," determine if the 1986-1987 MBR 
      increase is to be prospective from the date the tenant was served with the 
      aforementioned orders or is to take effect on the effective date of the 
      1986-1987 MBR.

      The Commissioner finds that the subject landlord was not required to serve 
      its application for an establishment of the 1986-1987 MBR on the subject 
      tenant as it was an ex parte proceeding between the landlord and the rent 

      As to the landlord's assertion that he is entitled to a monthly increase of 
      $10.00 as the subject apartment contains two air conditioners, the 
      Commissioner finds that the subject landlord may not apply for an increase 
      in the subject tenant's maximum rent in an answer to a petition for 
      administrative review, but must first file an application with the rent 

      THEREFORE, in accordance with the City Rent and Rehabilitation Law and the 
      Rent and Eviction Regulations, it is 


          DOCKET NO.: BK 410149-RT

      ORDERED, that this proceeding be, and the same hereby is, remanded to the 
      Rent Administrator to recalculate the 1986-1987 MBR for the subject 
      building, and for the issuance of a new determination resolving all issues.  
      The previously issued order remains in full force and effect until a new 
      order is issued on remand.


                                                       JOSEPH D'AGOSTA
                                                  Acting Deputy Commissioner


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