CA 410178 RT
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          APPEAL OF                             DOCKET NOS.: CA 410178 RT/  
                                                             CA 410050-RT
                      DENNIS ELLISON
                     ADELE CIACCIO,             DRO DOCKET NO.: AF 410214-R


                                    ORDER AND OPINION

        On January 13, 1988 the above-named petitioner-tenants filed a 
        Petition for Administrative Review against an order issued on 
        December 22, 1987 by a Rent Administrator concerning housing 
        accommodations known as Apartment 2G at 41 West 72nd Street, New 
        York, New York wherein the Administrator determined that the owner 
        had not overcharged the tenant.

        The applicable sections of the Law are Section 26-516 of the Rent 
        Stabilization Law and Section 2526.1(a) of the current Rent 
        Stabilization Code.

        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 on June 27, 
        1986 of a rent overcharge complaint by the co-tenants in which they 
        stated that they had commenced occupancy in February, 1986 at a rent 
        of $1,033.05 per month.

        Complainants also stated that the prior tenant had paid $850.00 per 
        month, which they believed was excessive for the first tenancy after 
        the decontrol of the apartment.

        The owner was served with a copy of the complaint and directed to 
        submit a complete lease history from the base date to establish the 
        lawfulness of the rent being charged.  The owner submitted an answer 
        detailing the lease history commencing with the initial registered 

          CA 410178 RT

        rent in 1984 of $850.00 per month.

        Prior to the commencement of the present proceeding, the prior 
        tenant had, on March 30, 1984, filed an overcharge complaint.  The 
        prior tenant had assumed occupancy as the first stabilized tenant 
        pursuant to a two-year lease commencing on August 1, 1983 at a rent 
        of $850.00 per month.  The owner did not respond to the prior 
        tenant's complaint.

        On November 12, 1986, a Rent Administrator issued an order under 
        Docket No. L-3113356-R, wherein it was determined that the prior 
        tenant had been overcharged in the amount of $1,430.09, including 
        excess security and interest since April 1, 1984.  A lawful rent of 
        $817.31 per month was determined in accordance with default 
        procedures for the prior tenant's initial lease commencing on August 
        1, 1983.  Neither the prior tenant nor the owner filed a petition 
        for Administrative Review of this order.  Although the owner had 
        informed the Division of Housing and Community Renewal (DHCR) of its 
        change of address, the order was mailed by mistake to the owner's 
        former address.  The post office returned it, "addressee unknown".

        On December 22, 1987, the Rent Administrator issued an order in 
        determination of the present proceeding under Docket No. AF 410214- 
        R, wherein the current tenant's overcharge complaint was denied as 
        no overcharges were found.  Specifically, it was determined that the 
        initial legal registered rent in 1984 of $850.00 per month had been 
        lawfully increased in accordance with the allowances permitted under 
        the guidelines.

        In this petition, dated January 13, 1988, the tenants contend that 
        the Administrator's order was incorrect, firstly, because the rent 
        of the prior tenant was unlawful and that, furthermore, the prior 
        tenant was improperly denied a fair market rent appeal that she was 
        eligible for under the Rent Stabilization Code as the first 
        stabilized tenant.  As a result, the prior tenants and all tenants 
        after April 1, 1984 will suffer "serious and substantial costs."   
        The tenants argue that the prior tenant did not understand English 
        well, and thus did not know the difference between an "overcharge" 
        complaint and a fair market rent appeal.  Secondly, the tenants 
        contend that in any case their own initial rent should have been no 
        higher than $817.31, as established in the prior order.  Finally, 
        they contest the granting of the vacancy allowance in computing 
        their lease because the prior tenant did not leave voluntarily, but 
        was evicted.

        During the pendency of the PAR proceeding, the owner was sent a copy 
        of the Rent Administrator's order issued under docket no. L-3113356- 
        R and afforded an opportunity to appeal such order.  No response was 
        received from the owner.

        The Commissioner is of the opinion that this proceeding should be 
        remanded to the Administrator for a new determination.

          CA 410178 RT

        The Commissioner has consistently recognized the authority of the 
        DHCR to amend a complaint of general rent overcharge to a fair 
        market rent appeal in appropriate situations (Accord:  ART 08849-L, 
        ARL 02626-L,
        et al).  It is also beyond dispute that, had the Administrator who 
        processed the overcharge complaint of the initial stabilized tenant 
        so chosen, that proceeding would have been a proper one for such 
        alteration:  the tenant actually stated that she never received a 
        DC-2 notice and had no knowledge of the prior tenant's rent.  But we 
        have a different issue before us now.

        The Administrator instead processed the case as a simple overcharge 
        complaint and, upon the owner's default, determined the rent 
        according to standard default procedure.  An overcharge was found 
        and an order issued.  The instant appellate proceeding is one not 
        instigated by the complainant in that proceeding, but by the 
        subsequent tenants, who demand a fair market rent appeal.  They 
        contend that the Administrator improperly found that they had not 
        been overcharged, when in fact the owner had grossly inflated the 
        initial stabilized rent, and that they should be allowed to 
        challenge it.

        The Commissioner cannot recognize this claim.  Whatever basis the 
        first stabilized tenant may have used to appeal the order, the fact 
        remains that she never did.  Even if, as seems likely, she never 
        received the order, having vacated the premises some nine months 
        prior to its issuance, she never informed the DHCR of her new 
        address, thereby indicative that she had abandoned her rights.  
        There is no evidence that she had intentions to do otherwise.

        Insofar as the lawful rent had been adjusted in Administrative Order 
        No. L-3113356-R, issued on November 12, 1986, it was improper for 
        the Administrator to issue the subject-order finding no overcharges 
        without regard for the DHCR's prior determination of the lawful 
        rent.  The proceeding is therefore remanded to the Administrator for 
        a redetermination of the rent for the lease period included within 
        the scope of the instant proceeding, in accordance with the final 
        determination of the rent as stated in Administrative Order No.
        L-3113356-R.  In making this redetermination, the Administrator is 
        to afford all parties the opportunity to submit relevant data on the 
        lawfulness of all rent increases and, if necessary, whether 
        overcharges were willful.

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

        ORDERED, that the tenant's petition be, and the same hereby is, 

          CA 410178 RT

        granted to the extent of remanding this proceeding to the Rent 
        Administrator for further processing in accordance with this Order 
        and Opinion.


                                                JOSEPH A. D'AGOSTA
                                                Acting Deputy Commissioner

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