CC 410154 RT
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. CC 410154 RT
: DISTRICT RENT OFFICE
DOCKET NO. TC-048428-G/
Charles Olstein, CDR 32,709
OWNER: P & H Associates
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On March 3, 1988, the above-named petitioner-tenant filed a Petition for
Administrative Review against an order issued on February 22, 1988 by
the Rent Administrator, 10 Columbus Circle, New York, New York,
concerning the housing accommodations known as 201 East 87th Street,
apartment 6M, New York, New York, wherein the Rent Administrator
dismissed the tenant's overcharge complaint.
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 proceeding was commenced with the filing of an overcharge complaint
by the tenant on March 14, 1980, the tenant was asserted with that the
owner was charging a 2.2% rent increase despite housing waived such
increase in a duly executed lease agreement.
In response, the owner stated that a computation error had been made but
that the tenant had been notified of the error and of the correct rent
prior to the effective date of the lease. The owner further asserted
that it should be permitted to increase the rent pursuant to the terms
of the rider.
In the order issued on February 22, 1988, the Administrator, permitting
all annual 2.2% rent increases, found no overcharge and dismissed the
In his appeal, the tenant contends that the DHCR acted in excess of its
authority, that the owner's proper remedy was to seek reformation of the
lease in a court of competent jurisdiction. Therefore, the tenant
requests that the order be reversed and that the lease renewal be
enforced as executed.
CC 410154 RT
The Commissioner is of the opinion that this petition should be denied.
Buildings constructed pursuant to Section 421-a of the Real Property Tax
Law receive a tax exemption of a percentage appeal property taxes which
declines over a ten year period. In compensation for increased real
estate taxes, an owner of a 421a building is given a cumulative annual
2.2% rent increase for a period of ten years, for a total of nine
increases. Section 42C of the former Rent Stabilization Code makes
provision for the inclusion in a lease of a clause providing for such
annual or other periodic rent increase over the initial rent permitted
under the 421-a program rules and regulations. Section 42C further
provides that a lease containing such a clause shall also include a
rider with an endorsement signed by the tenant acknowledging the owner's
right to include such provision and to collect such rent increase for
the tax benefit period.
Review of the record reveals that the lease executed by the tenant
herein contains such a clause in a lease rider acknowledged and endorsed
by the tenant. This tax escalator clause permits an owner to modify the
rent stated in the lease at appropriate times without seeking
reformation of the lease or other judicial remedy. Moreover, the owner
notified the tenant of the increased rent prior to the effective date of
the lease and cannot be said to have waived the 2.2% rent increase.
The jurisdiction of the DHCR is rent regulation. The Commissioner finds
that the Administrator acted within his authority in finding no
overcharge and in dismissing the complaint.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, denied, and that
the Rent Administrator's order be, and the same hereby is, affirmed.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner