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

      APPEAL OF                              DOCKET NO.: CC610341RO

                 Ronald Rettner,             DRO DOCKET NO.: AG610337R

                                             TENANT: Otilia Ramos             


      On March 21, 1988, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on February 26, 1988, by 
      the Rent Administrator, 92-31 Union Hall Street, Jamaica. New York, 
      concerning the housing accommodations known as 45 East Mosholu Parkway, 
      Bronx, New York, Apartment No. 3F, wherein the Rent Administrator 
      determined that the owner had overcharged the tenant.

      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 commenced by the filing of a rent overcharge 
      complaint on November 17, 1986.  The tenant had assumed occupancy of the 
      subject premises on March 1, 1983 pursuant to a 2 year lease at a 
      monthly rent of $400.00, the tenant stated that the previous tenant was 
      under rent control and paid rent of only $200.00 per month.

      The owner was served with the complaint and directed to submit a 
      complete rent history.  In answer to the complaint, the owner stated 
      that the subject apartment was decontrolled in April 1972 and that the 
      initial stabilized rent of $400.00 and all subsquent rents have been 
      below the actual legal rent as determined under the guidelines.  

      In Order Number AG610337-R, the Rent Administrator determined that the 
      tenant had been overcharged in the amount of $567.15 including excess 
      security and interest.  The order determined a lawful rent for the two 
      year renewal lease term commencing on March 1, 1986 of $451.56

      In this petition, the owner contends in substance that the Rent 
      Administrator erred in his calculations by omitting the rent increase 
      for an MCI that was approved by the DHCR in Docket Number OM5347, issued 
      on May 22, 1985.  The owner contends that all overcharges are eliminated 


      by including that increase, as documented in a rent calculations chart 
      it submitted with the petition.

      In response, the tenant agrees that the MCI should have been included, 
      but that his initial rent of $400.00 represents an overcharge over the 
      prior tenant's rent.

      The Commissioner is of the opinion that this petition should be granted.

      The owner correctly contends that the Administrator mistakenly 
      determined an overcharge because she failed to consider the MCI increase 
      that was granted by the DHCR in Order Number OM5347, issued on May 22, 
      1985.  Although the increase was made effective as of March 11, 1984, 
      the lease commencing on March 1, 1985 did not include it because the MCI 
      application was still pending.  The (retroactive) increase to the rent 
      on March 11, 1984 thereby increased the tenant's lawful rent to $418.48.  
      This amount was the lawful April 1, 1984 base rent.  As a result, the 
      overcharge found in the lease term commencing on March 1, 1986 is 
      eliminated, and the Commissioner finds that the lease rent of $472.42 
      was lawful.

      Accordingly, there was no rent overcharge.

      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 tenant is permitted to pay off the arrears in 24 
      equal monthly installments.  Should the tenant vacate after the issuance 
      of this order or have already vacated, said arrears shall be payable 

      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, that the order of the Rent Administrator be, and the 
      same hereby is, revoked, and it is found that no rent overcharge 


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner

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