CA 210162 RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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IN THE MATTER OF THE ADMINISTRATIVE
APPEAL OF ADMINISTRATIVE REVIEW
DOCKET NO.: CA 210162-RO
2269 REALTY COMPANY,
DRO DOCKET NO.: 51102
TENANT: STEVEN TALMUD
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND REMANDING PROCEEDING ON APPEAL
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
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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
following:
(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
owner
(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
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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
apartments.
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
remand.
CA 210162 RO
ISSUED:
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JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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