CF 110097-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
                                
                                
----------------------------------x     S.J.R. NO. 5816 (Mandamus)
IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW
APPEAL OF                               DOCKET NO.
                                        CF 110097-RO
       M.J. RAYNES, INC.,
                                        DRO DOCKET NOS.
Q-3120392-R/T
                        PETITIONER      CDR 29937 As Amended
----------------------------------x     TENANT: HOWARD KIRSCHNER


        ORDER AND OPINION REMANDING PROCEEDING ON APPEAL
                                
                                
On  June  3,  1988  the  above-named  petitioner-owner  filed   a
Peti-tion  for Administrative Review against an order  issued  on
April  29,  1988 by the District Rent Administrator, 10  Columbus
Circle,  New  York,  New  York concerning housing  accommodations
known as Apartment 1707 at 125-10 Queens Boulevard, Kew Gardens,
New  York wherein the District Rent Administrator determined that
the owner had overcharged the tenant.

The   issue   in  this  appeal  is  whether  the  District   Rent
Adminis-trator's order was warranted.

The applicable sections of the Law are Section 26-516 of the Rent
Stabilization  Law, Sections 2520.6(r)(4) and  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 March,
1984  of  a rent overcharge complaint by the tenant, in which  he
stated that he had commenced occupancy on July 1, 1974 at a  rent
of  $500.00 per month.  He also contended that the parking garage
was  rent  stabilized, and that the increase of the rent  of  his
space  from  $20.00  to  $100.00  was  unlawful.  He  later  made
conten-tions about a 2nd garage space and a $500.00 broker's fee.



In  answer, the owner asserted that garage rent was not  included
in  the apartment lease, and that the garage was always under the
management  of  a concessionaire and not the building  owner,  so
that   the   garage  space  rental  was  not  subject   to   rent
stabilization.

The  tenant enclosed various cancelled checks made out to several
garage operators.  Some of the dates, payees and endorsers are as
follows:

                                                          Check
         Payee                       Endorser              Date

Park-Swift Parking Corp.      Park-Swift Parking Corp.   01/03/68
                                                            *

Park-Swift Parking Co.        Park-Swift Parking Co.     01/02/76

Silver Tower Garage Corp.     Silver Towers Garage       02/01/76
Corp., pay to the order
                              of Lerner Parking Sys-
                              tems Mgmt., Inc.

Lerner Parking System         Lerner Parking Systems     03/05/77
Management, Inc.              Management, Inc. pay to
                              the order of Silver
                              Towers Garage Corp.

Silver Tower Garage Corp.     Silver Towers Garage       03/03/80
                              Corp.

Kinney Parking Sys.           Kinney System, Inc.        04/02/80


The  tenant contended that Kinney System was the first lessee  of
the  garage, and that all previous operators had been  agents  of
the  owner.  Rent checks for the apartment were made out to,  and
cashed  by,  Silver Tower Management Co. from 1967  (for  another
apartment in the same building) through December, 1974.




----------
   Note:   *  The tenant was living at another apartment in  that
building.



In  response, the owner submitted a lease for Kinney System, Inc.
to rent the garage and ramp space underlying the subject building
for  12  years commencing April 1, 1980.  The owner  also  stated
that  the  lease had been assigned to Silver Tower Associates  in
connection with their purchase of the property in August, 1985;
that  the  property has now been converted to a condominium;  and
that the garage unit is now owner by Silver Tower Associates. The
owner  later  submitted  a lease wherein  233  East  70th  Street
Corporation  leased the parking garage from Silver Tower  Manage-
ment Company for 10 years commencing August 1, 1974.

In   an  order  issued  on  April  29,  1988  the  District  Rent
Adminis-trator  found  that, because "the evidence  in  the  file
indicates that the garage was managed by various agents  for  the
same   owner,"   the   garage  spaces  were   subject   to   rent
stabilization. Because no written leases had been  furnished  for
the  spaces, the Administrator deemed maximum-length  leases  for
the spaces, finding an overcharge of $2,537.02 for one space from
the  base date through June 30, 1987, and of $159.78 from  August
1, 1983 (after establishing a default rent) through September 30,
1987.  The order also directed the owner to offer renewal  leases
for  the  spaces,  and  stated that the  allegation  regarding  a
broker's  fee  for exchanging apartments could not be  considered
since  the cancelled check did not indicate that the $500.00  was
for a broker's fee.

In  this petition, the owner contends in substance that there was
no  evidence  in  the record to support a rational  determination
that the parking charges were subject to rent stabilization; that
the  tenant's allegations that the garage owners were  agents  of
the   owner  of  the  building  were  unsubstantiated;  that  the
Adminis-trator's  determination  was  apparently  based  on   the
similarity of the name of the independent contractor Silver Tower
Garage  Corpo-ration  to  the names of Silver  Towers  Management
Corporation  and  Silver Towers Associates;  that  Silver  Towers
Garage  Corporation actually has no affiliation with  the  latter
two  entities, but is truly an independent contractor; that  this
is  shown  by  the  enclosed February 25, 1976  "Application  for
Garage  or  Parking  Lot License" filed with the  New  York  City
Department  of  Consumer  Affairs wherein  Silver  Towers  Garage
Corporation, when asked whether it owned or re-leased the  garage
space,  clearly wrote "lease"; and that the 1980 lease  agreement
between  Kinney Parking and a prior owner clearly indicated  that
the  garage  fees were not subject to rent stabilization,  as  it
provided  that  tenants  of  the  building  would  receive  first
preference  for  spaces  at  "a rate  not  more  than  the  rates
prevailing in the neighborhood in similar buildings, and  similar
operations."


In  answer,  the  tenant  asserts in substance  that  all  garage
oper-ators  prior to Kinney managed the garage on behalf  of  the
owners  on  a fixed-fee-for-service basis, collecting the  income
from the garage tenants as agents for the owners and remitting it
to  the  owners  minus a management fee; that one of  the  former
garage operators, Jack Lerner, has provided a letter stating this
to  be  true;  that Mr. Lerner's response on the Application  for
Garage  or  Parking  Lot License was "leases"  only  because  the
question  did not permit the more correct response of "agent  for
the  owners"; that the owner should have to submit the  purported
leases  of the garage operators prior to Kinney; that the  garage
premises have been sold to a new owner as a condominium; and that
a  further inquiry would show that the $500.00 broker's  fee  was
paid to the on-site managing agent of the owner.  With his answer
the tenant has enclosed a letter stating:

    "Please be advised that Silvertowers Garage Corp. was
     the management company for the garage located at 125-10
     Queens  Blvd., Kew Gardens.  Silvertowers Garage  Corp.
     never had a lease at any time from the landlord Century
     Operating  Corp.  Each month Silvertowers Garage  Corp.
     turned  over the garage proceeds to the landlord  minus
     its monthly management fee."
     
                                        Very truly yours,
                                        Jack Lerner, Pres.

The  signature of "Jack Lerner, Pres." appears to be in the  same
handwriting as the signature of the Jack Lerner who applied for a
garage license as President of Silver Towers Garage Corp.

The Commissioner is of the opinion that this proceeding should be
remanded to the Rent Administrator.

As  noted  by  the owner, Section 2520.6(r)(4)(xi)  of  the  Rent
Sta-bilization Code provides in pertinent part that:

     A  service  as defined in paragraph (3) of this  subdi-
     vision  for  which  there is or was a separate  charge,
     shall  not  be subject to the provisions of  this  Code
     where no common ownership between the operator of
     such  service  and the owner exists or existed  on  the
     applicable   base  date,  or  at  any  time  subsequent
     thereto,  and  such service is or was provided  on  the
     applicable base date and at all times thereafter by
     an  independent contractor pursuant to  a  contract  or
     agreement with the owner.  Where, however, on the ap-
     
     
     plicable  base date or at any time subsequent  thereto,
     thee  is or was a separate charge, and there is or  was
     common  ownership, directly or indirectly, between  the
     operator of such service and the owner, or the ser-
     vice was provided by the owner, any increase, other
     than  the charge provided in the initial agreement with
     a  tenant to lease, rent or pay for such service, shall
     conform to the applicable rent guidelines rate.
     
The  tenant alleged common ownership at an earlier point, and the
owner disputed that allegation.  An October 21, 1987 entry on the
Rent  Examiner  Progress  Report in  the  proceeding  before  the
Administrator  states  that  "tenant submitted  cancelled  checks
indicating Silver Tower & Park Swift (one and the same owner)  as
owner".   The  Administrator's  determination  that  the  parking
garage  was  actually being operated on behalf of the  owner  was
therefore  apparently based only on the similarity  of  the  name
"Silver Towers Garage Corporation" to the name Silver Tower  Man-
agement  Company",  to which the tenant paid his  apartment  rent
(for the subject apartment and another apartment in the building)
from  at  least  1967  through 1974.   This  similarity  was  not
suffi-cient  to  warrant  the Administrator's  determination.  In
addition,  the  owner  submitted a lease of  the  parking  garage
spaces to 233 East 70th Street Corporation for 10 years beginning
in  1974. However, beginning by at least 1976 the tenant's checks
for  parking  spaces, made out to Park-Swift Parking  Corporation
from  1968  through January, 1976, were made out  from  February,
1976 through March, 1980 to Lerner Parking Systems Management  or
Silver  Towers  Garage Corporation, which were  related  to  each
other  as  shown by the fact that each endorsed over checks  made
out  to  the  other.  On appeal the owner has  submitted  a  1976
garage license application by Jack Lerner of Silver Towers Garage
Corporation stating that the garage was being leased.  The
unnotarized  letter by Jack Lerner, submitted by  the  tenant  in
answer to the owner's petition, stating that Silver Towers Garage
Corporation never had a lease and turned the garage proceeds over
to  the owner after withholding its management fee, is suggestive
but  not  sufficient  in  itself to resolve  the  question  still
existing  as  to whether the owner of the subject apartment  ever
furnished parking service in such a manner that the provision and
rent of parking spaces became subject to rent stabilization. This
proceeding  is  being  remanded for a  further  inquiry  and  new
determination in the matter.  A hearing may be held if necessary.

Regarding the contention in the tenant's answer about the alleged
broker's  fee:  this could be considered only if the  tenant  had
filed his own Petition for Administrative Review objecting to


the  Administrator's determination, rather than raising the issue
only in answer to the owner's petition, which did not mention it.

The Commissioner notes that the 1985 apartment registration lists
the complainant in occupancy pursuant to a lease expiring
June 30, 1985; that the 1986 registration lists the apartment  as
stabilized but vacant; and that the 1987 registration lists the
apartment as exempt from stabilization as of December 23, 1986 by
virtue of cooperative or condominium  conversion.  However, as of
May 15, 1987 the tenant was still giving the subject apartment as
his  mailing  address, and he has submitted  an  August  1,  1988
garage space invoice billing him at the subject apartment. If the
complainant  is still a stabilized tenant then the  registrations
will  need  to  be amended; if he is an owner-occupant  then  his
garage  rent is no longer subject to stabilization and the  over-
charges; if any, found upon remand may not be calculated past the
time that the tenant stopped being a stabilized tenant.


THEREFORE,  in  accordance with the Rent  Stabilization  Law  and
Code, it is

ORDERED,  that this petition be, and the same hereby is,  granted
to  the extent of remanding this proceeding to the District  Rent
Administrator  for  further processing in  accordance  with  this
order  and  opinion.  The automatic stay of so much of  the  Dis-
trict  Rent Administrator's order as directed a refund is  hereby
continued until a new order is issued upon remand.  However,  the
Administrator's determination as to the rent is  not  stayed  and
shall  remain in effect, except for any adjustments  pursuant  to
lease  renewals, until the Administrator issues a new Order  upon
remand.


ISSUED:




ELLIOT SANDER
                                         Deputy Commissioner
    

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