CD 410039 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.: CD 410039 RO
DISTRICT RENT OFFICE
John Kapetanos, DOCKET NO.: 56525
TENANT: R. Kavaliuskas;
PETITIONER A. Ross; C. Balchin
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
It is acknowledged that one of the tenants herein is employed by DHCR.
On April 1, 1988, the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on March 8, 1988, by
the Rent Administrator, 10 Columbus Circle,
New York, New York, concerning the housing accommodations known as 89
MacDougal Street, New York, Apartment No. 5B, wherein the Rent
Administrator determined the fair market rent pursuant to special fair
market rent guidelines promulgated by the New York City Rent Guidelines
Board for use in calculating fair market rent appeals.
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 of an objection
to the apartment registration including a fair market rent appeal. The
tenants took occupancy pursuant to a lease commencing February 17, 1985
and expiring February 16, 1986 at a monthly rent of $979.50.
The owner was served with a copy of the objection and on October 20,
1987 was requested to provide the rents in effect on June 30, 1974 for
comparable apartments and to submit evidence of any improvements or new
equipment. The owner responded by sending, on November 17, 1987, a
photocopy of the Landlord's Report of Statutory Decontrol (Form R-42)
indicating vacancy decontrol in October, 1984.
On June 20, 1986 the owner was served with a copy of the tenant's
complaint, and was instructed to provide complete copies of all leases
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for the subject apartment since April 1, 1980, together with proof (paid
bills, cancelled checks, etc.) to substantiate any improvements that
would affect the legal rent. On September 24, 1987, the Administrator,
in Final Notice of Pending Default, again afforded the owner the
opportunity to submit that information. On October 20, 1987 the owner
was afforded a final opportunity to submit the paid bills, cancelled
checks, etc. for any new equipment that he installed. In response to
these requests, the owner, on November 17, 1987, submitted only a
photocopy of the Landlord's Report of Statutory Decontrol (Form R-42)
indicating vacancy decontrol in October 1984.
In the order herein appealed, the Rent Administrator adjusted the
initial legal regulated rent by establishing a fair market rent of
$319.40 effective February 17, 1985, the commencement date of the
initial rent stabilized lease, and directed the owner to refund to the
tenants excess rent in the amount of $25,061.94 including excess
security.
In this petition, the owner contends that the Rent Administrator's Order
is incorrect and should be modified because it was determined based upon
Special Guidelines Order No. 16 and not on the rent for substantially
similar housing accommodations (comparables).
In support of its petition, the owner submits a photocopy of the initial
apartment registration for Apartment 4B, a comparable apartment, and
proof of service thereof upon the tenant. No objection to that
registration has been filed.
The owner further alleges, for the first time on appeal, that a rent
increase was warranted to reimburse him for new equipment and vacancy
improvements in the subject apartment, totalling $12,500., and submits
a copy of the contract and a contractor's affidavit that the work was
paid in full, in support of his allegation.
In answer to this petition, the tenants contend that the Administrator
was correct in utilizing the special guidelines because the owner failed
to submit any comparability data; that the petitioner has failed to
submit required documentation throughout the proceeding and has offered
no reasonable excuse for that failure; that the vacancy improvements
should not be considered for the first time on appeal.
The tenants further contend, among other things, that the vacancy
improvements, if they were completed at all, exhibited poor workmanship.
The tenants submit current photographs of the kitchen cabinets in
support of their assertion.
The Commissioner is of the opinion that this petition should be granted
in part.
Pursuant to Sections 2522.3(e) and (f) of the Rent Stabilization Code
effective May 1, 1987, for fair market rent appeals filed after April 1,
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1984, comparability will be determined based on the following:
(e)...(1) Legal regulated rents, for which the time
to file a Fair Market Rent Appeal has
expired and no Fair Market Rent Appeal is
then pending, or the Fair Market Rent
Appeal has been finally determined,
charged pursuant to a lease commencing
within a 4 year period prior to, or a one
year period subsequent to, the
commencement date of the initial lease
for the housing accommodations involved;
and
(f) Where the rents of the comparable housing
accommodations being considered are legal
regulated rents, for which the time to
file a Fair Market Rent Appeal has
expired, and such rents are charged
pursuant to a lease ending more than 1
year prior to the commencement date of
the initial lease for the subject housing
accommodation, such rents shall be
updated by guidelines increases for 1
year renewal leases, commencing with the
expiration of the initial lease for the
comparable housing accommodations to a
date within 12 months prior to the
renting of the housing accommodation
involved.
The record in this case indicates that the notices sent to the owner did
not afford him an opportunity to submit comparability data pursuant to
the above requirements of the current Rent Stabilization Code, which
changed the definition of comparability data to allow the owner to
submit rents of comparable apartments which became subject to rent
stabilization within four years prior to and one year subsequent to the
stabilization date. Therefore the Commissioner will consider the
comparability data submitted with the petition for administrative review
at this time.
The Commissioner finds that the comparability data submitted by the
owner concerning Apartment 4B is adequate under Section 2522.3(e) of the
Code. Division records confirm that all other apartments in the same
line were rent controlled until Apartment 2B was decontrolled in 1990,
beyond the statutory comparability period.
The owner submitted proof of service of the initial apartment
registration upon the tenant of Apartment 4B. Since that rental sum was
not challenged, and the time to file a fair market rent appeal had
passed, the initial legal regulated rent for Apartment 4B was $750.00.
Accordingly, the initial legal regulated rent of Apartment 5B is
recomputed as follows: the Special Guidelines amount of $319.40,
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averaged with the Apartment 4B comparable rent of $750.00, results in a
revised initial legal regulated rent of $534.70 per month for Apartment
5B.
The revised lawful stabilized rent is computed on the attached Rent
Calculation Chart, which is hereby made a part of this order. The
excess rents collected total $16,955.88.
Concerning the adjustment for vacancy improvements, the Commissioner
finds that this should be denied. Section 2529.6 of the Rent
Stabilization Code provides, in pertinent part, that "review pursuant to
this part shall be limited to facts or evidence before a Rent
Administrator as raised in the petition."
The record establishes that the owner, on three occasions during the
proceeding before the Administrator, was sent notices that set forth the
requirements for an increase for vacancy improvements. The owner failed
to submit the requisite documentation of improvements during the
proceeding before the Administrator. The owner may not submit such
documentation for the first time on appeal. Accord: 985 Fifth Avenue
Inc. v. DHCR, 171 AD2d 572, 567 N.Y.S.2d 657 (AD. 1Dept. 1991), In the
Matter of Lemle & Wolff, Inc. v. DHCR, Supreme Court, New York County,
Mc Cooe, J., Index Number 18903/91 (unreported), January 15,1992.
The owner is directed to roll back the rent to the lawful stabilized
rent consistent with this decision and to refund or fully credit against
future rents over a period not exceeding six months from the date of
receipt of this order, the excess rent collected by the owner.
In the event the owner does not take appropriate action to comply within
sixty (60) days from the date of this order, the tenants may credit the
excess rent collected by the owner against the next month(s) rent until
fully offset.
The owner is directed to reflect the findings and determinations made in
this order on all future registration statements, including those for
the current year if not already filed, citing this Order as the basis
for the change. Registration statements already on file, however,
should not be amended to reflect the findings and determinations made in
this order.
If the owner has already complied with the Rent Administrator's order
and there are arrears due to the owner as a result of the instant
determination, the tenants shall be permitted to pay off the arrears in
twenty four equal monthly installments. Should the tenants vacate after
the issuance of this order or have already vacated, said arrears shall
be payable immediately.
THEREFORE, in accordance with the provisions of the Rent Stabilization
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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
Administrator be, and the same hereby is, modified to the extent
hereinabove indicated. The total amount of excess rent owed to the
tenants is $16,955.88, and the monthly lawful stabilization rents are
$534.70 effective February 17, 1985 and $582.82 effective August 1,
1987.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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