Adm. Rev. Docket No.: CG420045RO

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

          APPEAL OF                              DOCKET NO.: CG420045RO  
              WALTER M. EBERHART, JR.            DRO DOCKET NOS:     
                                PETITIONER    :                             
                                                 TENANTS: HAROLD ROSENTHAL


          On July 22, 1988, the above-named petitioner-owner filed a Petition 
          for Administrative Review (PAR) against an order issued on July 20, 
          1988, by the District Rent Administrator at Gertz Plaza, Jamaica, 
          Queens, New York, concerning the housing accommodations known as 
          Apartment 4FE at 314 East 82 Street, New York, New York, wherein 
          the Administrator determined the maximum collectible rent for the 
          subject Rent Controlled housing accommodation as of January 1, 
          1985, 1986 and 1987.

          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 PAR.

          The proceeding below was commenced by the tenant's filing of a 
          complaint of a rent overcharge. 

          On the whole, the Commissioner finds that the basic facts herein 
          are not in dispute and are, in substance, as follows. When the 
          tenant took occupancy, the apartment consisted of four rooms and 
          the use of a separate toilet-closet off of the public hallway. The 
          kitchen in the apartment contained a washbasin and bathtub. The 
          tenant was approached by management and asked to consent to 
          discontinuing the use of the hallway toilet and the installation of 
          a new bathroom; to be installed within the interior dimensions of 
          his original four room apartment. Said installation was completed 
          and the owner sought no increase in rent based thereon. 

          The tenant's rent overcharge complaint is based on the theory that 

          Adm. Rev. Docket No.: CG420045RO

          after the new bathroom was put in, he had a three room apartment 
          (bathrooms generally not being counted as a room for most purposes) 
          but continued to be charged rent at the same rate that had been set 
          for a four room apartment.

          The owner responded to this theory, in substance, by asserting that 
          the amount of space lost was insignificant; that it was nothing 
          more than the space taken up by the water closet in the hall; which 
          the owner alleges contained 11.35 square feet: only 2.69% of the 
          space originally let to the tenant.

          In the appealed order, the Administrator determined that the 
          maximum collectible rent effective January 1, 1985 was $213.74 per 
          month; the maximum collectible rent effective January 1, 1986 was 
          $229.77 per month; and $240.19 per month effective January 1, 1987. 
          The Administrator's order also contained the following statements:

                  This notice is without prejudice to the owner's filing
               under section 2202.22 (formerly Sec. 36) of the 
               Regulations for adjustments based on Major Capital 
               improvement and increases in services or equipment to 
               subject building or apartment.

                  Regarding the room count the tenant may file a 
               Challenge to the Maximum Base Rent Order of Eligibility 
               or to the Fuel Cost Adjustment Report as set forth on 
               said order or report when they are issued.

          In the PAR, the owner challenges the Administrator's order, in 
          substance, on the following grounds. The order does not contain a 
          rationale for the calculation of the rents determined therein; the 
          bathroom was installed in 1986, yet the 1985 rent is adjusted in 
          the order.

          In answer to the PAR, the tenant, in substance, asserts the 
          following. The events in question occurred in 1985, not 1986 and 
          the water closet was needed by the owner for another apartment. It 
          was therefore for the owner's convenience that the reconfiguration 
          of the tenants's apartment was made and the tenant should be 
          compensated for the loss of the room he suffered as a result of 
          this adjustment in his living space.

          The Commissioner is of the opinion that the PAR should be granted 
          to the extent of remanding this proceeding to the Administrator.

          The Commissioner finds that the appealed order, in effect, implies 
          that the rent adjustments contained in it have nothing to do with 
          the tenant's loss of a room and were calculated without any 
          consideration of whether the installation of the subject bathroom 
          in any way constituted an increase in services. The Commissioner 
          therefore finds that as the order contains neither a statement  of 
          the rationale upon which the Administrator determined that rent 

          Adm. Rev. Docket No.: CG420045RO

          adjustments were warranted nor a description of the methodology 
          used to calculate the adjusted rents, this matter must be remanded 
          to the Administrator for reconsideration of this order and the 
          issuance of a more expository order thereupon.

          Mindful of the fact that there have been intervening Maximum Base 
          Rent Orders issued during the pendency of this appeal and in order 
          to avoid unnecessary confusion as to the rent to be paid following 
          the issuance of this order and opinion, the Commissioner has not 
          revoked the appealed order; it being the intention and direction of 
          the Commissioner that, barring other proper adjustments that may be 
          warranted for reasons unrelated to the issues in this proceeding, 
          the maximum base rent and the maximum collectible rent as 
          determined by the last order of eligibility issued by the 
          Administrator (with regard to this apartment) shall remain in 
          effect until the Administrator issues a further order on remand. 

          THEREFORE, in accordance with the provisions of all of the 
          applicable laws and regulations, it is

          ORDERED, that this Petition be, and the same hereby is granted to 
          the extent that this proceeding is remanded to the Administrator 
          for reconsideration of the appealed order in accordance with the 
          terms of this order and opinion.


                                               JOSEPH A. D'AGOSTA
                                               Deputy Commissioner



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