CA 110248 RO
                               STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

        APPEAL OF                             DOCKET NO.:  CA 110248 RO

                 GUPTA AND PRASAD             DRO DOCKET NO.: 30683
                 REALTY CORP.,
                                              TENANT: USHA TANEJA          


        On January 28, 1988, the above-named petitioner-owner filed a 
        Petition for Administrative Review against an order issued on 
        January 4, 1988, by a Rent Administrator, concerning the housing 
        accommodations known as 39-06 63rd Street, Woodside, New York, 
        Apartment No. 2C, wherein the Rent Administrator determined the 
        fair market rent pursuant to the special fair market rent guidelines 
        promulgated by the New York City Rent Guidelines Board for use in 
        calculating fair market rent appeals.

        The Administrative Appeal is being determined pursuant to the 
        provisions of Section 2522.3 of the Rent Stabilization Code.

        The issue herein is whether the Rent Administrator's order was 

        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 action commenced when the tenant filed an objection to the 
        initial stabilized rent on September 8, 1984.  The complaint stated 
        that the tenant took occupancy of the premises commencing April 1, 
        1981 at a rent of $275.00 per month under the Section 8 Program as 
        administered by the New York City Housing Authority.  The tenant 
        also stated that the owner has been charging her $325.00 per month, 
        which is $31.00 more than the Housing Authority assessment of 
        $294.00, as of April 1, 1984.  With the complaint, the tenant 
        submitted an authorization letter and renewal lease from the New 
        York City Housing Authority stating that her share of the rent was 
        being increased to $270.00 out of the total $294.25, effective 
        August 1, 1984.

        In its answer to the complaint, the owner stated that the subject 
        apartment was subject to rent control prior to the complaining 

          CA 110248 RO

        tenant's occupancy; that the tenant's original rent was $325.00 per 
        month; and that although the tenant's rent has been increased in 4 
        successive lease periods in accordance with the amounts promulgated 
        in the guidelines, the tenant has ignored these increases and 
        continues to pay a rent of $325.00 per month from her original 
        lease.  Enclosed with the owner's answer was the lease for $325.00 
        per month, signed by the tenant and the owner and dated March 8, 

        In the order under appeal herein, the Rent Administrator adjusted 
        the initial legal regulated rent by establishing a fair market rent 
        of $205.01, effective March 17, 1981, the commencement date of the 
        initial rent stabilized lease, and directed the owner to refund 
        excess rent in the amount of $9,135.12.  The Administrator stated 
        that the owner had failed to respond with the necessary data on the 
        rents of comparable apartments in the processing of a fair market 
        rent appeal and as a result, the initial fair market rent was 
        determined entirely on the basis of the special guidelines orders 
        promulgated by the Rent Guidelines Board.  In calculating the amount 
        of excess rent, the Administrator used the lease amounts cited by 
        the owner in its answer to the complainant as reflecting the amounts 
        paid by the tenant.

        In its petition the owner alleges that the calculation of overcharge 
        was incorrect as to the amounts collected by the owner and the 
        dates.  It also stated that the initial fair market rent had been 
        set by the Housing Authority.

        The tenant answers that he signed the original lease for a rent of 
        $325.00 with the understanding that it would be adjusted by the 
        Section 8 Program.  However, the owner refused to reduce the rent 
        to $275.00, which was the amount approved by the Housing Authority, 
        and insisted that the tenant pay the additional $50.00 per month.  
        The owner then continued to demand higher rents than what the 
        Housing Authority approved.  The tenant also acknowledged that he 
        never actually paid more than $325.00, and that the amount of excess 
        rent calculated by the Administrator was probably excessive.

        The Commissioner is of the considered opinion that the owner's 
        petition should be granted in part and the proceeding remanded to 
        the Rent Administrator for a new determination.

        Section 2522.3 of the current Rent Stabilization Code provides in 
        pertinent part that fair market rent adjustment applications are to 
        be determined by the use of special fair market rent guidelines 
        orders promulgated by the Rent Guidelines Board, and by a comparison 
        with the rents generally prevailing in the same area for 
        substantially similar housing accommodations.  In utilizing such 
        comparability data for fair market rent appeal cases filed after 
        April 1, 1984, it is the DHCR's procedure to accept, where 
        validated, (1) the legal regulated rents for which the time for 
        filing a Fair Market Rent Appeal has expired and no such appeal is 
        pending, or which has been determined pursuant to a Fair Market Rent 

          CA 110248 RO

        Appeal, as based on a lease commencing within a four-year period 
        prior to, or a one-year period subsequent to the commencement of the 
        initial lease period of the premises; or (2) at the owner's option, 
        the market rents in effect for comparable housing on the date of the 
        initial lease for the subject-premises.

        Although the owner states that the Administrator's determination of 
        the initial rent was improper because it ignored the fact that the 
        rent was set by the New York City Housing Authority, this in and of 
        itself does not make the order invalid.  There is nothing in the 
        record to show that the subject accommodations were rehabilitated 
        or in any other way placed under the aegis of another governmental 
        agency such as exempts otherwise rent stabilized accommodations from 
        a fair market rent appeal.  These exceptions are quite specific, and 
        are enumerated in Section 2521.1 of the Rent Stabilization Code.  
        Since the owner submits nothing to show that such an exemption 
        applies in this case, it was proper for the Administrator to process 
        a fair market rent appeal.

        Unfortunately, the record does not establish that it was properly 
        done.  The record indicates that the owner was never notified that 
        the complaint was to be processed as a fair market rent appeal and 
        was not afforded an opportunity to submit comparability data 
        pursuant to the requirements of the current Rent Stabilization Code.  
        Accordingly, the proceeding must be remanded to the Rent 
        Administrator for a redetermination of the fair market rent wherein 
        the owner will be fully advised of the requirements for suitable 
        comparables, and be afforded an opportunity to submit such data.

        Additionally, both the petitioner and tenant, in his answer, state 
        that the tenant did not pay as much rent as stated on the 
        calculations chart.  The record is also insufficient on this matter, 
        and on remand the Administrator must obtain sufficient documentation 
        of rental payments to establish the amount of excess rent, if any.
        It is noted that in answer to a petition for administrative review 
        filed by the tenant under Docket Number GE 110137 RT involving a 
        complaint of lease renewal violation the owner submitted a rental 
        history indicating the rental amounts paid by the tenant and 
        indicating that the Section 8 subsidy continued until March 31, 
        1988. On remand this submission should be considered by the 
        Administrator and a copy of said submission should be forwarded to 
        the tenant for comment.

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

        ORDERED, that the owner's petition be, and the same hereby is, 
        granted to the extent of remanding this proceeding 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 

          CA 110248 RO

        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. 


                                        JOSEPH A. D'AGOSTA
                                        Acting Deputy Commissioner


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