CI120207RO
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.CI120207RO
: DRO DOCKET NO.Q3120975RT
RIDGE REALTY (MEADOW REALTY TENANT: ANNE MURRAY
MANAGEMENT)
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On September 27, 1988, the above-named petitioner-owner filed
a Petition for Administrative Review against an order issued on
August 23, 1988, by the Rent Administrator, 10 Columbus Circle, New
York, New York, concerning the housing accommodations known as 144-
25 33 Avenue, Queens, New York, Apartment No. 3D, 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.
The Commissioner notes that this proceeding was filed prior to
April 1, 1984. Sections 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 26-513 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order was
warranted.
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 on March 30, 1984, by
the filing of a rent overcharge complaint and a fair market rent
adjustment application by the tenant. In such complaint and
application, the tenant stated that she first moved to the subject
apartment on August 1, 1983 at a rental of $385.00 per month. In
the fair market rent adjustment application, the tenant checked off
the box which stated that she believed that the initial legal
regulated rent for her apartment exceeded the fair market rent.
Copies of the tenant's overcharge complaint and fair market
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rent adjustment application were served on the prior owner and the
owner herein. In addition the owner was afforded an opportunity to
prove that the tenant or a prior tenant was served with a copy of
the required Notice of Initial Legal Regulated Rent (hereafter DC-2
Notice). In a response dated December 15, 1986, the owner herein
stated that it took over management of the subject building in
September 1985, and was not provided with copies of any DC-2
Notices. Further, on March 16, 1988, the prior owner and the owner
herein were sent a letter (form RTP-22) directing the submission of
a complete rental history, stating that the tenant was challenging
the Initial Legal Regulated Rent and affording the owners the
opportunity to submit June 30, 1974, or post June 30, 1974
comparability data. On March 16, 1988, the owner herein was sent a
Notice affording an opportunity to submit additional evidence and a
copy of the tenant's reply to the owner's answer was sent along with
this Notice.
The owner submitted a response to the March 16, 1988 Notice,
but did not submit any comparability data.
In Order Number CDR 33,918, the Rent Administrator adjusted the
initial legal regulated rent by establishing a fair market rent of
$180.79 effective November 1, 1977, the commencement date of the
initial rent stabilized lease. Based on the failure to submit
comparability data, the Rent Administrator determined the fair
market rent using the special fair market rent guideline alone. The
Rent Administrator also directed that the owner refund excess rent
of $8,912.30 to the tenant covering the period from August 1, 1983
to August 31, 1988.
In this petition and a supplement to said petition, the owner
alleges in substance that the DHCR failed to give the owner proper
notice regarding the submission of comparability data and applied
incorrect statutory criteria; that the tenant did not sufficiently
support her allegation regarding fair market rent; and that the
owner should not have been required to produce rent records prior to
April 1, 1980 in accordance with the decision in J.R.D. Management
Corp. v. Eimicke,148 A.D. 2d 610, 539 N.Y.S. 2d 667 (App. Div. 2d
Dept., 1989).
The Commissioner is of the opinion that this petition should be
denied.
Section 26-513 of the Rent Stabilization Law provides in
pertinent 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
the 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
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appeal cases filed prior to April 1, 1984 to allow owners to submit
June 30, 1974 fair market rent 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.
In the instant case, the evidence of record discloses, contrary
to the owner's contention on appeal, that the owner was afforded an
opportunity to submit June 30, 1974 or post June 30, 1974
comparability data as outlined above. Further, contrary to the
owner's contention on appeal, the tenant's fair market rent
adjustment application met statutory criteria in that the tenant
contended that the initial legal regulated rent exceeded the fair
market rent. The tenant was not required to submit proof of this
contention.
Finally, the Commissioner is of the opinion that the JRD case
is not applicable in this proceeding. The change effected by
Section 14(g) of the Omnibus Housing Act and Section 26-516(g) of
the Rent Stabilization Law, as applied in the JRD case, only
involves rent overcharge proceedings, and does not apply to fair
market rent appeals. Section 26-513 of the Rent Stabilization Law,
which deals with fair market rent appeals, continues to provide for
determination of the fair market rent from the date of the initial
stabilized tenancy. Additionally, the owner was not required to
submit comparability data more than four years old, but had the
option to do so.
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. The
owner is further directed to adjust subsequent rents to an amount no
greater than that determined by this order plus any lawful
increases.
In the event the owner does not take appropriate action to
refund the excess rent of $8,912.30, as shown in the Rent
Administrator's order, within sixty days from the date of issuance
of this order, the tenant may credit the excess rent against the
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next month(s) rent until fully offset.
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, denied, and, that the order of the Rent
Administrator be, and the same hereby is, affirmed.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
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