CC 410154 RT

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

      APPEAL OF                              DOCKET NO. CC 410154 RT

                                          :  DISTRICT RENT OFFICE
                                             DOCKET NO. TC-048428-G/
           Charles Olstein,                             CDR 32,709
                                             OWNER: P & H Associates          

                            PETITIONER    : 


      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


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