CC 410157 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                             JAMAICA, NEW YORK    11433

          APPEAL OF                               ADMINISTRATIVE REVIEW
                                                  DOCKET NO.: CC 410157-RO

                 H-O REALTY CORPORATION
              (MAURICE ABELSON, PRESIDENT),       D.R.O DOCKET NO.: ZAK-410119-R

                                                  ARTICLE 7-A                    
                                                  ADMINISTRATOR: MURRAY SCHACTMAN

                                                  TENANT: MICHAEL KRUG


          On March 11,  1988  the  above  named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          February 8, 1988 by the  Rent  Administrator,  92-31  Union  Hall
          Street, Jamaica, New York concerning housing accommodations known 
          as Apartment 36 at 68  West  10th  Street,  New  York,  New  York
          wherein the Rent Administrator determined that the tenant had not 
          been  overcharged,  and  that  the  lawful   stabilization   rent
          commencing September 1, 1986 was the $532.50 rent stated  in  the
          lease commencing that date.

          The issue in this appeal  is  whether  the  Rent  Administrator's
          order was warranted.

          The applicable sections of the Law  are  Section  26-516  of  the
          Rent  Stabilization  Law  and  Section  2526.1(a)  of  the   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 issue raised by the administrative appeal.

          This  proceeding  was  originally  commenced  by  the  filing  in
          November, 1986 of a rent overcharge complaint by the  tenant,  in
          which he stated that he had commenced occupancy on April 1,  1985
          at a rent of $500.00 per month.

          The owner was served with a copy of the complaint.  In answer, he 
          stated that the prior tenant had a lease from September  1,  1983
          to August 31, 1986 at a rent of $500.00; that it was assigned  to

          CC 410157 RO
          the complainant on  April  1,  1985  with  the  approval  of  the
          Article 7-A Administrator; that a renewal lease was  subsequently
          made commencing September 1, 1986; that a vacancy  allowance  was
          allowable so that the lawful rent was actually $570.00,  although
          the 7-A  Administrator  charged  only  a  Guideline  increase  to
          $532.50; and that C.A.B. Opinion  24518  [expelling  the  subject
          building from the Rent Stabilization Association] did  not  apply
          to the subject apartment.

          In an order issued on February 8,  1988  the  Rent  Administrator
          determined that there had been no overcharge as of the end of the 
          complainant's initial lease, and that  the  lawful  stabilization
          rent was the $532.50  stated  in  the  lease,  since  the  lawful
          stabilization rent is limited to the rent actually charged.

          In this petition, the owner contends in substance that the  court
          order appointing the Article 7-A Administrator  directed  him  to
          charge the maximum legal residential rents; that Item  No.  7  of
          that order provided that his fee [5% of the rents collected]  was
          subject to his compliance with the order and without prejudice to 
          the rights of any party; that since it has been  determined  that
          the maximum lawful stabilized rent for the subject  apartment  is
          $570.00 per month, then the lawful stabilization rent  should  be
          established at $570.00 per month.

          The Commissioner is of the opinion that this petition  should  be

          It has long been the Division of Housing and Community  Renewal's
          (DHCR's) policy that when the rent actually charged is less  than
          the  rent  with   maximum   permitted   increases,   the   lawful
          stabilization  rent  is  limited  to  the  rent   charged.    The
          petitioner is claiming that the court  order  [not  submitted  in
          this proceeding, although it was submitted in Docket No. 
          CJ 410042-RO, in which proceeding an order was issued on December 
          12, 1991 deciding the same issue of the  waiver  of  a  right  to
          rents not actually charged another tenant in the same  building],
          overrules that policy.  It is not necessary to decide whether the 
          Court had the power to do that in its order  appointing  the  7-A
          Administrator, because the Court  order  actually  did  not  even
          purport to do that, as can be seen by reading the ending of  Item
          7,  which  ending  was  omitted  by  the  petitioner.   The   7-A
          Administrator's fee was  authorized  "without  prejudice  to  the
          rights of any party hereto or the Administrator to move the Court 
          for a modification of said fee, either permanent  or  temporary."
          [Emphasis added  to  words  omitted  by  the  petitioner.]   This
          relates  only  to  the  7-A  Administrator's  fee,  not  to   any
          entitlement of the owner to lawfully charge a  higher  rent  than
          stated in the tenant's lease and charged the tenant.

          This determination is without prejudice to any rights  which  the
          owner may have against  the  7-A  Administrator  in  a  court  of
          competent jurisdiction.

          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

          CC 410157 RO
          is, affirmed.  The lawful stabilization rent is $532.50 per month 
          in the lease from September 1, 1986 to August 31, 1988.



                                                  JOSEPH A. D'AGOSTA
                                                  Deputy Commissioner

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