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STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X SJR 6560
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: CE 410134 RO
DRO DOCKET NO.: L 3118189 RT
John Kapetanos, CDR 33, 158
TENANT: Medhat Negm
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On May 10, 1988, the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on April 14, 1988, by the
Rent Administrator, 10 Columbus Circle, New York, New York, concerning
the housing accommodations known as 89 MacDougal Street, New York,
New York, Apartment No. 2A, 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.
Subsequent thereto, the tenant, filed a petition in the Supreme Court
pursuant to Article 78 of the Civil Practice Law and Rules, in the
nature of mandamus, for a judgment directing the Division to render a
determination of the petitioner's administrative appeal.
The Commissioner notes that this proceeding was filed prior to April 1,
1984. Section 2526.1(a)(4) and 2521.1(d) of the Rent Stabilization Code
(effective May 1, 1987) governing rent overcharge and fair market rent
proceedings provide that determination of these matters be based upon
the law or code provisions in effect on March 31, 1984. Therefore,
unless otherwise indicated, reference to Sections of the Rent
Stabilization Code (Code) contained herein are to the Code in effect on
April 30, 1987.
The Administrative Appeal is being determined pursuant to the provisions
of Section 2526.1 of the Rent Stabilization Code.
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 originally commenced in March 1984 by the filing of
a fair market rent adjustment application and a complaint of rent
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overcharge by the tenant who took occupancy of the subject apartment on
June 1, 1982 at a rental of $500.00 per month.
The owner was served with a copy of the tenant's application and
afforded an opportunity to submit June 30, 1974 or post June 30, 1974
comparability data for determining the fair market rent of the subject
apartment and to submit proof of any improvements made in the subject
In addition, the tenant had filed a complaint of rent overcharge in
January 1984 under docket L 3115122 R which was consolidated with docket
L 3118189 RT by notice to all parties on July 17, 1987.
In response to the tenant's complaints, the owner submitted a bill for
a new stove and refrigerator dated July 23, 1986 at a total cost of
$617.25 with a copy of the signed consent of the tenant. The owner
failed to submit a notice of initial rent with proof of service,
comparability data or documentation for any improvements or new
equipment prior to the complainant's occupancy.
In Order Number CDR 33,158, the Rent Administrator adjusted the legal
regulated rent by establishing a fair market rent of $212.59 effective
June 1, 1982 utilizing the special guidelines only.
In this petition, the owner contends in substance that the Rent
Administrator erred in requesting comparability data exceeding the 4
year limitation imposed by Section 26-516(g) of the Rent Stabilization
Law; that the owner was not notified of the tenant's Fair Market Rent
Appeal until 1987 and therefore the legal rent is the $500.00 charged on
April 1, 1984; that the comparability should be based on the April 1,
1984 registered rents of the subject line which are being submitted
herein and that the Rent Administrator should also consider the
improvements done prior to the tenant's occupancy totaling $7750.00.
Along with his petition the owner submitted a bill dated January 17,
1982 for new windows; 2 new doors; ceramic tile; fixing walls and
ceiling; scraping; painting and plastering at a total cost of $7750.00;
an affidavit dated May 2, 1988 attesting to full payment by the owner
herein signed by the contractor; and the initial apartment registrations
for apartments 3A, 2C and 1B.
In addition, the owner resubmitted the bill dated July 23, 1986 for a
refrigerator and stove and the tenant's consent form dated July 23, 1986
attesting to receipt of the new equipment which had been previously
submitted to the Rent Administrator.
In answer to the owner's petition, the tenant stated in substance that
the Rent Administrator order should be upheld because the owner failed
to submit comparability data or the April 1982 bill to the Rent
Administrator; that Section 26-516(g) doesn't apply to the instant case
which was filed prior to April 1, 1984 and that the items listed on the
April 1982 bill constitute primarily repairs and maintenance for which
the owner's proof of payment is suspect. The tenant conceded that a
stove and refrigerator were installed in August 1986 as the owner
The Commissioner is of the opinion that this petition should be granted
Section 26-513 of the Rent Stabilization Law provides, in pertinent
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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 rents generally
prevailing in the same area for substantially similar housing
accommodations. In order to determine rents generally prevailing in the
same area for substantially similar housing accommodations, it is DHCR's
procedure for fair market rent appeal cases filed prior to April 1, 1984
to allow owners to submit June 30, 1974 fair market rental data for
complete lines of apartments, beginning with the subject line. The
average of such comparable rentals will then be updated by annual
guidelines increases. Alternatively, DHCR procedure allows owners to
have comparability determined on the basis of rents charged after June
30, 1974. In order to use this method, owners were required prior to
November 1, 1984 to submit rental history data for all stabilized
apartments in the subject premises and subsequent to November 1, 1984 to
submit such data for complete lines of apartments beginning with the
subject line. Post June 30, 1974 rent data will be utilized if the
comparable apartment was rented to a first stabilized tenant within one
year of the renting of the subject apartment and if the owner submits
proof of service of a DC-2 Notice or apartment registration form
indicating that the rent is not subject to challenge.
An examination of the records in this case discloses that the complaint
was filed prior to April 1, 1984 and that the prior management agent was
advised on March 28, 1984 of the pending complaints and of the
requirement to preserve rental records; the prior management was first
served on October 9, 1984 with the overcharge complaint; the fair market
package was served on the prior managing agent May 20, 1986; July 30,
1987, December 3, 1987 and the current owner was served on December 8,
1987; and a summary notice with additional requests for documentation of
improvements was sent on January 12, 1987.
In the proceeding before the Rent Administrator, the owner did not
submit documentation for improvements to the subject apartment completed
in April 1982 nor comparability data although afforded opportunities to
do so. Since this is not a de novo proceeding, the owner's contention
that it should be allowed to submit comparability data and documentation
for increases to the initial rent cannot be considered for the first
time on appeal.
Furthermore, the comparability data submitted by the owner in its appeal
does not meet the criteria for usable comparables as cited above for
fair market rent appeals filed prior to April 1, 1984.
The Commissioner rejects the owner's contention that Section 26-516(g)
precluded the Rent Administrator from requesting comparability data
beyond the 4 year limitation period. Section 26-516(g) was promulgated
for overcharge cases filed after April 1, 1984 and specifically excludes
fair market rent appeals, therefore it is not applicable to the instant
case. Moreover the owner was not required to submit comparability data
and had the option of submitting post June 30, 1974 comparability data.
The owner is correct however in its contention that the Rent
Administrator failed to allow increases to the subsequent rent for a new
stove and refrigerator installed in July 1986 for which the owner in the
proceeding before the Rent Administrator did provide documentation of
cost and the tenant's consent. Further, it is undisputed by the tenant
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that a new refrigerator and stove were installed as the owner contends.
Taking the above factors into account, the Commissioner has recalculated
the lawful stabilization rents and amount of refund for the subject
apartment, to include an increase of $15.43 (1/40th of $617.25)
effective August 1, 1986 for the new stove and refrigerator which were
installed with the tenant's consent.
The lawful stabilization rents and amount of excess rent are set forth
on the amended rent calculation chart attached hereto and made a part
Because this determination concerns lawful rents only through May 31,
1987, the owner is cautioned to adjust subsequent rents to an amount no
greater than that determined by this 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 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 month(s) rent until fully
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
Administrator be, and the same hereby is, modified in accordance with
this order and opinion. The lawful stabilization rents and the amount
of the rent refund are established on the attached chart which is fully
made a part of this order. The amount of the rent refund through May
31, 1987 is $18,210.28.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner