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

          APPEALS OF                              DOCKET NO.  BL410312RT
          KINGSWOOD MANAGEMENT CORP.          :  DRO DOCKET NO.  L3117595R/
          PETITIONERS                         :

               On January 4, 1988, the above-named petitioner-tenant timely 
          re- filed a Petition for Administrative Review against an order 
          issued on October 6, 1987, by the Rent Administrator, 10 Columbus 
          Circle, New York, NY concerning the housing accommodation known as 
          200 West 79th Street, New York, apartment 5K, wherein the 
          Administrator dismissed the tenant's complaint.  On February 1, 
          1988, the above named petitioner-owner filed a Petition for 
          Administrative Review against an order issued on December 28, 1987 
          by the Rent Administrator, 92-31 Union Hall Street, Jamaica, New 
          York.  These appeals have been consolidated herein as they involve 
          common issues and facts.  
               The issues herein is whether the Rent Administrators' orders 
          were warranted.

               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 administrative appeals.  

               This proceeding was originally commenced by the filing of  rent 
          overcharge complaints by the tenant on March 31, 1984 and on July 
          18, 1986.  The tenant stated that she had taken occupancy of the 
          subject apartment pursuant to a two year vacancy lease in March 1975 
          at a rent of $324.50.  The tenant alleged that the owner was 
          attempting to collect unwarranted rent increases based upon the 421- 
          a tax abatement program.  

               In response to the tenant's first complaint, the owner stated 
          in substance that there was no overcharge and submitted a complete 
          rental history including all 2.2% rent increases.  

               In the order  number CDR 31,495, the Administrator determined 
          that an overcharge had not occurred and dismissed the tenant's 


          complaint.  In order number ZAG 410422R, the Administrator 
          determined that the owner had not proved its eligibility for rent   
          increases based on RPTL's 421-a program and based thereon found that 
          the tenant had been overcharged.  
                In this appeal, the tenant contends that the Administrator 
          erred in allowing the owner an annual 2.2% rent increase for 1984-5 
          as the owner had waived that increase by failing to collect it in   
          1984.  Further, the owner was attempting to collect ten annual 
          increases when only nine increases are permitted by the regulations.
          Moreover, having failed to provide a properly executed lease, 
          effective April 1, 1986, the owner is not entitled to receive a rent 
          increase until such lease is provided.  

               In response to the tenant's appeal, the owner contends that 
          since the Rent Administrator's order is in accordance with 
          applicable law and was based upon the evidence of record, the order 
          is entitled to affirmance.  The owner also asserts that the tenant's 
          contentions regarding the cited lease have been litigated previously 
          and resolved under docket number ZAC410292RV.  The owner also states 
          that if an owner fails to collect the annual increase in any given 
          year, the owner may collect it prospectively at a later date.  The 
          owner further asserts that nine increases rather than ten offers 
          only partial compensation for the decreasing tax abatement, an 
          unjust result.   Therefore, the owner is entitled to ten increases 
          for full compensation.  

               In its own petition, the owner contends that the overcharge 
          order herein appealed must be reversed as the Administrator failed 
          to examine the Agency's records which would show that a certificate 
          of eligibility for 421-a benefits had been filed in another 
          proceeding and that a previous overcharge complaint had been 
          dismissed as the owner was entitled to collect 2.2% rent increases.

               After careful  consideration, the Commissioner believes that 
          the tenant's petition should be denied,  that the Rent 
          Administrator's order issued under docket no. L3117595R should be 
          modified, that the Rent Administrator's order issued under docket 
          number ZAG 410422R should be revoked and that the owner' s petition 
          should be granted. 

               Buildings constructed pursuant to  Section 421-a of the Real 
          Property Tax Law receive a tax abatement which declines normally 
          over a ten year period.  To compensate the owner for the increased 
          taxes caused by operation of Section 421-a, the Section provides in 
          pertinent part that an owner may receive cumulative annual rent 
          increases of 2.2% of the initial legal rent over a ten year period, 
          a total of 19.8%.    In the instant case, the owner failed to 
          collect the increase for 1984.  421-a increases which were never 
          collected are not permanently waived but may be recouped on a 
          prospective basis only.  The Administrator correctly included in the 
          rent calculation chart the 421-a increases, including partial 
          increases.   However, the Administrator erred in listing nine full 
          421-a increases plus a partial increase of  $1.12.  Accordingly, the 
          Commissioner herein corrects the rent calculation chart to include 
          only nine 421-a rent increases minus the partial increase of $1.12.  
          Since the record indicates that the tenant has not paid the extra 
          increase included in the rent chart, and that the final rent of 


          $536.13 (prior to the coop conversion) was less than the rent the 
          owner could have charged - $566.18 - $1.12 = $565.06  the 
          Commissioner finds that no overcharge occurred.  

               Since the record contains evidence of the 421-a status of the 
          subject building and the apartment here at issue, the Commissioner 
          finds that the Administrator erred in order number ZAG 410422R in 
          finding that an overcharge had occurred.  

               The Commissioner notes that the issue of the renewal lease was 
          not raised in the proceeding before the Rent Administrator.  Since 
          the scope of review is limited to those facts and evidence which 
          were raised in the proceeding below, that issue will not be 
          considered herein. 

               The Commissioner further notes that the subject building 
          underwent  a coop conversion and that the subject apartment is no 
          longer subject to the Rent Stabilization Law.
               THEREFORE, in accordance with the provisions of the Rent 
          Stabilization Law and Code, it is

               ORDERED, that the tenant's petition for administrative review 
          be, and the same hereby is, denied, and, that  order number CDR 
          31,495, L3117595R of the Rent  Administrator be, and the same hereby 
          is, modified in accordance with this order and opinion.  It is 

               Ordered that the Owner's Petition for Administrative Review be, 
          and the same hereby is, granted, and that Rent Administrator's order 
          number ZAG410422R be, and the same hereby is, revoked and that Rent 
          Administrastor's order number L3117595R, CDR 31,495 be, and the same 
          hereby is, modified in accordance with this order and opinion. 


                                          LULA M. ANDERSON
                                          Deputy Commissioner




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