CA 210162 RO

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

          APPEAL OF                               ADMINISTRATIVE REVIEW
                                                  DOCKET NO.:  CA 210162-RO

                  2269 REALTY COMPANY,
                                                  DRO DOCKET NO.: 51102
                                                  TENANT: STEVEN TALMUD


          On January 29, 1988 the above named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          December 30, 1987 by the District Rent Administrator,  10 Columbus 
          Circle, New York, New York concerning housing accommodations known 
          as Apartment 5H at 2263 84th Street, Brooklyn, New York wherein the 
          District Rent Administrator determined the tenant's Fair Market 
          Adjustment Application ("fair market rent appeal"), and found that 
          the owner had collected excess rent of $3,592.40 as of January 31, 
          1988.  In the order, the Administrator increased the 1982 Maximum 
          Base Rent (MBR) of $298.08 by 20% pursuant to Special Guidelines 
          Order 15, applicable to the tenant's occupancy which commenced July 
          1, 1984.  This resulted in a Fair Market Rent of $357.70, since the 
          owner had not submitted "comparability" data.

          In this petition, the owner contends in substance that the 1984, 
          rather than 1982, MBR should have been used to calculate the Fair 
          Market Rent, since Special Guidelines Order No. 15 took effect 
          October 1, 1983 and the tenant took occupancy on July 1, 1984; that 
          a fuel allowance of $26.61 should have been included; that an 
          increase of $23.30 should have been allowed for capital 
          improvements made just prior to the tenant taking occupancy; that 
          these would result in a Fair Market Rent of $448.92, compared to 
          the $437.00 actually paid by the tenant; and that the Administrator 
          should have considered the comparable Fair Market Rents of similar 
          apartments for lease periods beginning in 1984.

          With its petition the owner has enclosed a copy of a Notice of 
          Increase in 1984-1985 Maximum Base Rent and Maximum Collectible 
          Rent Computation, Docket No. 6M 7709, showing a Fuel Cost 
          Adjustment of $26.61; a June 22, 1984 invoice for $913.58 for a 
          refrigerator, a stove and a sink cabinet; and the first page of 

          CA 210162 RO

          three leases in the subject building, all in effect as of July 1, 
          1984, for rents of $401.25, $416.00 and $425.00.

          In answer, the tenant asserts in substance that the Special 
          Guidelines Order applicable to his initial tenancy provided for a 
          20% increase above the 1982-1983 MBR; that the owner should not be 
          allowed to submit new evidence for the first time on appeal; and 
          that in any event the comparability data submitted by the owner on 
          appeal would not have been sufficient.

          The Commissioner is of the opinion that this petition should be 
          granted in part and that the proceeding should be remanded to the 
          Rent Administrator.

          Pursuant to Sections 2522.3(e) and (f) of the Rent Stabilization 
          Code effective May 1, 1987, for fair market rent appeals filed 
          after April 1, 1984 comparability will be determined based on the 
                    (e)...(1)  Legal regulated rents, for which 
                    the time to file a Fair Market Rent Appeal has 
                    expired and no Fair Market Rent Appeal is then 
                    pending, or the Fair Market Rent Appeal has 
                    been finally determined, charged pursuant to a 
                    lease commencing within a 4 year period prior 
                    to, or a one year period subsequent to, the 
                    commencement date of the initial lease for the 
                    housing accommodation involved; and

               (2)  At the owner's option, market rents in effect 
                    for other comparable housing accommodations on 
                    the date of the initial lease for the housing 
                    accommodation involved as submitted by the 

               (f)  Where the rents of the comparable housing 
                    accommodations being considered are legal 
                    regulated rents, for which the time to file a 
                    Fair Market Rent Appeal has expired, and such 
                    rents are charged pursuant to a lease ending 
                    more than 1 year prior to the commencement 
                    date of the initial lease for the subject 
                    housing accommodation, such rent shall be 
                    updated by guidelines increases for 1 year 
                    renewal leases, commencing with the expiration 
                    of the initial lease for the comparable 
                    housing accommodations to a date within 12 
                    months prior to the renting of the housing 
                    accommodations involved.
          The Commissioner finds that in this case the owner was not afforded 
          an opportunity to submit comparability data pursuant to the 
          requirements of the current Rent Stabilization Code.  Therefore, 
          the Commissioner finds that the proceeding should be remanded to 

          CA 210162 RO

          the Administrator for further processing in order to afford the 
          owner an opportunity to submit comparability data pursuant to the 
          requirements of the current code.  It is noted that the owner 
          failed to submit with its comparability submission proof of service 
          of a DC-2 notice or apartment registration form for the comparable 

          Rent Guidelines Board Order No. 15, applicable to leases commencing 
          between October 1, 1983 and September 30, 1984 contained a Special 
          Guideline of 20% above the sum of the 1982-1983 MBR and the current 
          allowable fuel cost adjustment.  While the owner is incorrect in 
          asserting that the 1983-84 MBR should be used, the owner is 
          partially correct in its assertions that a fuel cost adjustment 
          should be included.  The owner submitted a fuel cost form with a 
          figure of $26.61.  However, that figure is not the correct one to 
          use in calculating the fair market rent.  That figure was listed in 
          the 1984-1985 MBR and MCR computation form submitted to the DHCR by 
          the owner on January 29, 1984.  At that time it was the most recent 
          official fuel cost figure available to the owner, having been 
          submitted nine months earlier on the 1983 Landlord's Report, 
          Certification and Notice of Fuel Cost Adjustment Eligibility.  On 
          March 23, 1984, three months after the owner submitted the 1984- 
          1985 MBR and MCR computation form with the figure of $26.61, the 
          owner submitted the 1984 fuel cost certification, with a figure of 
          $23.16 for the subject apartment.  This, rather than $26.61, was 
          the current fuel cost adjustment when the tenant commenced 
          occupancy on July 1, 1984.  Since the 20% Special Guideline applies 
          to the sum of that and the 1982-1983 MBR of $298.08, the Special 
          Guidelines results in a rent of $385.49 effective July 1, 1984.  If 
          the owner submits acceptable comparability data upon remand, the 
          resulting comparable rent figure should be averaged with $385.49 to 
          obtain the fair market rent.  Because the record does not contain 
          evidence that the owner was asked to submit evidence of its 
          entitlement to a rent increase for new equipment, the evidence 
          submitted by the owner on appeal should be considered, and any 
          allowable rent increase should be added to the fair market rent to 
          arrive at the Initial Legal Regulated Rent. 

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

          ORDERED, that this petition be, and the same hereby is, granted to 
          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 
          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 

          CA 210162 RO


                                                  JOSEPH A. D'AGOSTA
                                                  Acting Deputy Commissioner

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