CB 110155 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 ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: CB 110155 RO
NATHAN KATZ REALTY,
DRO DOCKET NO.: 042965
TENANTS: RAYMOND GARCIA
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On February 9, 1988, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
January 13, 1988 by the Rent Administrator, 10 Columbus Circle New
York New York, concerning the housing accommodations known as 37-06
81st Street, Queens, New York, Apartment No. 5G wherein the Rent
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 Administrative Appeal is being determined pursuant to the
provisions of Section 26-513 of the Rent Stabilization Law.
The issue here is whether the Rent Administrator's order was
warranted.
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 on September 5, 1984 by
the filing of a fair market rent adjustment application by the
tenant who took occupancy of the subject apartment on July 1, 1984
at a rental of $600.00 per month.
The owner was served with a copy of the tenant's application and
afforded an opportunity to submit comparability data determining
the fair market rent of the subject apartment and to submit proof
of any improvements made in the subject apartment.
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In response, the owner stated in substance that new equipment
totaling $1,080.06 was installed in the subject apartment and that
the owner was entitled to charge a fair market rent of $600.00. As
comparables, the owner cited June 30, 1974 rents for apartments in
the subject line but all apartments were subject to rent control on
that date. The owner submitted bills showing it made expenditures
totalling $1,080.06 in the subject apartment immediately prior to
occupancy by the tenant herein.
In Order Number 042965 the Rent Administrator adjusted the initial
legal regulated rent by establishing a fair market rent of $410.44
(including $24.94 for new equipment).
In this Petition, the owner contends in substance that the tenant
is precluded from filing a fair market rent appeal because the
tenant was served personally with a DC-2 Form (Notice of Initial
Legal Regulated Rent) and signed and dated it as proof of receipt.
Therefore, the fair market rent is the $600.00 lease rent.
Furthermore, the Rent Administrator miscalculated the Fair Market
Rent established in the order in the following ways:
1) miscalculated 1/40th of $1,080.06 as $24.94
for new equipment. The correct increase is
$27.00 ($1,080.06 divided by 40 = $27.00).
2) Miscalculated the Special Guideline No. 15
increase of 20% above the 1982 Maximum Base
Rent (MBR) of $321.28 as $385.50. The correct
calculation is $321.28 X 20% = $385.54.
The tenant failed to submit a response to the petition.
The Commissioner is of the opinion that this petition should be
granted in part.
Section 26-513 of the Rent Stabilization Law 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 New York City Rent Guidelines Board and by the
rents generally prevailing in the same area for substantially
similar housing accommodations.
An examination of the record in this case discloses that the owner
is correct in its contention that the Rent Administrator
miscalculated the increase due for new equipment and the increase
calculation under Special Guideline No. 15.
The Commissioner rejects the owner's contention that the tenant's
signature on the Notice of Initial Legal Regulated Rent is adequate
proof of service and that the tenant is precluded from challenging
the Initial Rent.
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Section 2522.3(a) provides in pertinent part that after service of
the notice required by Section 26 of the former Rent Stabilization
Code (Notice of Initial Legal Regulated Rent also designated as the
DC-2 Notice) on the first tenant taking occupancy of a formerly
rent controlled unit, the time within which such a tenant may file
a FMRA is limited to 90 days after such notice was mailed to the
tenant by the owner by certified mail.
In the instant case, the owner failed to show that the tenant was
served the notice by certified mail as requested.
Moreover, in the instant case, the tenant filed a tenant objection
to the rent within 90 days of personal service of the Notice and
therefore the challenge was timely.
Taking the aforementioned factors into account the Commissioner has
adjusted the initial legal regulated rent as established in the
order from $410.44 to $412.54 ($321.28 X 20% = $385.54 + $27.00 =
$412.54) and recalculated the amount of refund for the subject
apartment.
The lawful stabilization rent and amount of refund are set forth on
the amended Rent Calculation Chart attached hereto and made a part
hereof.
Because this determination concerns lawful rents only through June
30, 1985, the owner is cautioned to adjust subsequent rents to an
amount no greater than that determined by the Rent Administrator's
order plus any lawful increases, and to register any adjusted rents
with this order and opinion being given as the explanation for the
adjustment.
If the owner has already complied with the District Rent
Administrator's order and there are arrears due to the owner as a
result of the instant determination, the tenant shall be permitted
to pay off the arrears in twenty four equal monthly installments.
Should the tenant vacate after the issuance of this order or have
already vacated, said arrears shall be payable immediately.
If the owner does not take appropriate action to comply with this
order within sixty days from the date of issuance of this order,
the tenant may credit the excess rent against the next months(s)
rent until fully offset.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be, and the
same hereby is, granted in part and, that the order of the Rent
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Administrator be, and the same hereby is, modified in accordance
with this Order and Opinion.
The total amount of excess rent thorough June 30, 1985 is
$2,436.98.
ISSUED:
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JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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