BL 610184 RO

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

                                    APPEAL OF                               
                                                  DOCKET NO.: BL 610184 RO

               NICK KALAJ,                        DRO DOCKET NO.: B3100080R


                                         IN PART

            On December 28, 1987 the above-named petitioner-owner filed a 
            Petition for Administrative Review of an order issued on November 
            25, 1987 by the District Rent Administrator, concerning housing 
            accommodations known as Apartment 6B, 529 East 235th Street, Bronx, 
            New York, wherein the Administrator determined the fair market rent 
            pursuant to 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 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 appeal.

            This proceeding was originally commenced by the filing of an 
            overcharge complaint form by the tenant with the New York City 
            Conciliation and Appeals Board, one of the predecessor agencies to 
            the Division of Housing and Community Renewal (DHCR).   The tenant 
            took occupancy pursuant to a lease commencing April 1, 1980 and 
            expiring March 31, 1982 at a monthly rent of $319.80.

            In answer, the owner stated that the complainant tenant was the 
            first stabilized tenant to take occupancy after the death of the 
            rent controlled tenant.  

          BL 610184 RO

            The owner submitted a copy of Landlord's Order of Maximum Base Rent 
            effective January 1, 1972, the 1979 Maximum Base Rent Master 
            Building Rent Schedule, and a rental history for the complaining 
            tenant from April 1, 1980 through the lease beginning April 1, 

            In the order herein appealed, the District Rent Administrator 
            adjusted the initial legal regulated rent by establishing a fair 
            market rent of $293.58 effective April 1, 1980, the commencement 
            date of the initial rent stabilized lease, and directed the owner 
            to refund to the tenant of excess rent in the amount of $655.50 
            through March 31, 1982.

            In this petition, the owner contends that the District Rent 
            Administrator's Order is incorrect and should be modified because 
            the 1978 Maximum Base Rent (MBR) was $245.89, and not $244.65 as 
            stated by the Administrator; the Administrator should have used the 
            1980 MBR which was effective February 1, 1980, two months before 
            the complaining tenant took occupancy; the 1972 MBR contained an 
            error in room count which affects the rent; and the owner could 
            have charged 12% in addition to the 20% "vacancy factor" in the 
            complaining tenant's initial lease.

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

            With regard to the owner's contention that the 1980 Maximum Base 
            Rent rather than the 1978 Maximum Base Rent should have been used 
            in calculating the fair market rent, Special Fair Market Guidelines 
            Order No.11 provides that for apartments rented between July 1, 
            1979 and June 30, 1980 to a first stabilized tenant after vacancy 
            decontrol, the 1978 Maximum Base Rent should be used in calculating 
            the fair market rent.   Since the subject apartment herein was 
            rented to the first stabilized tenant commencing April 1, 1980, the 
            Commissioner finds that it was proper to use the 1978 Maximum Base 
            Rent rather than the 1980 Maximum Base Rent in calculating the fair 
            market rent.

            The Commissioner further finds that the owner was not entitled to 
            a 12% increase in addition to the 20% special guideline for the 
            complaining tenant's initial lease.  Pursuant to Guideline 11 the 
            12% increase only applies to two year initial stabilized leases of 
            previously stabilized apartments or renewals thereof and has no 
            application in the establishing of the initial stabilized rent 
            after vacancy decontrol.

          BL 610184 RO

            The owner asserts that an error in room count in the 1972 MBR has 
            resulted in a lower Maximum Base Rent than it should be entitled 
            to.  However, the owner failed to file a challenge to the 1972 MBR 
            and may not do so in this proceeding.

            As for the owner's assertion that a 1978 MBR figure of $245.89 
            should have been used by the Administrator rather than $244.65, 
            review of DHCR rent control records indicates that the owner was 
            entitled to an adjustment to the MBR not considered by the 
            Administrator, resulting in a 1978 MBR of at least $245.89.  
            Recalculation of the fair market rent utilizing a 1978 MBR of 
            $245.89 results in a fair market rent of $295.07 ($245.89 increased 
            by 20% pursuant to Special Guidelines Order Number 11).

            The initial legal regulated rent is adjusted from $319.80 to 
            $295.07 effective April 1, 1980.  The commencement date of the  
            initial rent stabilized lease.  The total excess rent is $618.25 
            for the period from April 1, 1980 to March 31, 1982, including 
            excess security.

            The owner is directed to roll back the rent to the lawful 
            stabilized rent consistent with this decision and to refund or 
            fully credit against future rents over a period not exceeding six 
            months from the date of receipt of this order, the excess rent 
            collected by the owner.

            In the event the owner does not take appropriate action to comply 
            within sixty (60) days from the date of this order, the tenant may 
            credit the excess rent collected by the owner 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.

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

          BL 610184 RO

            ORDERED, that this petition be, and the same hereby is, granted in 
            part and that the District Rent Administrator's order be, and the 
            same hereby is, modified in accordance with this order and opinion.

                                                    JOSEPH A. D'AGOSTA
                                                    Deputy Commissioner

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