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

      APPEAL OF                              DOCKET NO. CF210126RO

                                          :  DISTRICT RENT OFFICE
           Michael Herman and Marton Lob,    DOCKET NO. K3101738R/T
                                             TENANT: Jeanette Chervoni        
                               PETITIONER : 


      On June 13, 1988, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on May 13, 1988, by the 
      Rent Administrator concerning the housing accommodations known as 1031 
      Lorimer Street, Brooklyn, New York, Apartment No. 16, wherein the Rent 
      Administrator determined that the tenant had been overcharged.

      The Commissioner has reviewed all of the evidence in the record and has 
      carefully considered that portion of the record relevant to the issues 
      raised by the administrative appeal.  

      This proceeding was commenced by the filing of a fair market rent appeal 
      and a rent overcharge complaint by the tenant on March 31, 1984 with the 
      New York City Conciliation and Appeals Board, one of the predecessor 
      agencies to the DHCR. 

      On September 19, 1985, the owner submitted the following documents, 
      among other things, in response to the tenant's fair market rent appeal: 
      his statement of the rental history of the subject apartment; a rent 
      ledger for the period January, 1977 through April, 1978, which indicates 
      a vacancy in June,1977 and a prior stabilized tenancy commencing in July 
      or August, 1977, at a rental of $200.00 per month.  (It is unclear 
      whether the July, 1977 notation refers to rent for that month or 
      security paid.)

      In response to a DHCR request for additional information, the owner, on 
      September 22, 1986, resubmitted the statement of the apartment's rental 

      On March 31, 1988, the owner was sent a fair market rent appeal package.  
      In response submitted on April 26, 1988, the owner again submitted a 
      rent history and submitted a copy of the tenant's lease commencing June 


      1, 1978 and expiring May 31, 1980 at a monthly rent of $225.00.  

      In Order Number 33,372, the Administrator found the tenant ineligible to 
      file a fair market rent appeal since she was not the first tenant to 
      occupy the apartment following vacancy decontrol.  The Administrator    
      also found that since the owner had failed to submit a complete rental 
      history, the legal regulated rent would be established by using the 
      DHCR's Section 42A default rent computation.  The Administrator 
      established the lawful regulated rent as of June 1, 1983 at $248.97 per 
      month, and computed total overcharges in the amount of $2062.61 
      including excess security and accrued interest from April 1, 1984.

      In its petition for administrative review, the owner alleges that the 
      tenant requested a two-year lease commencing June 1, 1978, and that he 
      specially reduced the rent for the first year of that lease to $210.00, 
      because of the tenant's hardship.  The owner submits a rental history 
      along with the following documents: leases for the complainant tenant 
      for the following periods: June 1, 1978 to May 31, 1980; February 1, 
      1980 to January 31, 1983; February 1, 1986 to January 31, 1988; and 
      February 1, 1988 to January 31, 1990; and the lease of the prior tenant 
      from June 15, 1977 to June 14, 1978 at $200.00 per month.  The owner 
      contends that due to a fire his lease for the period February 1, 1983 to 
      January 31, 1986 was lost and that the tenant has a copy of that lease.

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

      Section 25(a) of the Rent Stabilization Code provides that a fair market 
      rent appeal application may be filed by the tenant of an apartment which 
      was subject to rent control or rent stabilization prior to July 1, 1971 
      and was vacated between January 1, 1974 and June 30, 1974, both dates 
      inclusive, or of an apartment which was subject to rent control on June 
      30, 1974 and vacated thereafter.

      The rent ledger for 1977 and 1978, submitted by the owner during the 
      proceeding before the Administrator, indicates a prior stabilized 
      tenancy commencing shortly after a June, 1977 vacancy.  The lease 
      submitted of the prior stabilized tenant (submitted for the first time 
      at PAR) for the period June 15, 1977 through June 14, 1978 corroborates 
      that tenancy.  DHCR records, of which the DHCR is deemed to be on 
      notice, indicate the filing of a decontrol report in December, 1977 for 
      a tenancy commencing in August 1977.  Based on the rent ledger and DHCR 
      records which were available to the Administrator, a fair market rent 
      appeal would have been appropriate.

      Pursuant to Special Guideline No. 8, which is applicable to leases 
      commencing between July 1, 1976 and June 30, 1977, the 1976 Maximum Base 
      Rent of $193.36 multiplied by 15% results in a fair market rent of 
      $222.36.  Since the prior tenant's rent does not exceed the fair market 
      rent, it is the lawful base rent for the next tenant.  (It is noted that 
      the result would be the same, that is, the initial stabilized rent would 
      be found to be lawful, even if the prior tenant's tenancy commenced in 


      July or August rather than June of 1977.)  The lawful stabilized rent is 
      recalculated on the attached rent calculation chart, which is hereby 
      made a part of this order.  The Commissioner notes that although the 
      initial stabilized rent was lawful, $80.00 excess rent (reflected in the 
      rent chart appended hereto) resulted from the owner's improperly 
      increasing the tenant's renewal lease rent for the instant housing 
      accommodation on February 1, 1980, prior to the expiration of the lease 
      term June 1, 1978 to May 31, 1980.

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

      THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

      ORDERED, that this petition be, and the same hereby is granted; and that 
      the Administrator's order be, and the same hereby is, modified in 
      accordance with this order and opinion.  


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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