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

      APPEAL OF                              DOCKET NO. DF210392RO

                                          :  DRO DOCKET NO. 46789
           Jac Bay Inc.,
                                             TENANT: Diane Anderson           

                            PETITIONER    : 


      On June 30, 1989, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on May 26, 1989, by the 
      Rent Administrator concerning the housing accommodations known as 345 
      86th Street, Brooklyn, New York, Apartment No. 111, 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 originally commenced by the tenant in August, 1984 
      by filing of an objection to rent registration including a rent 
      overcharge complaint.

      The owner was served with a copy of the tenant's complaint, and was 
      requested to submit rent records from April 1, 1980 to prove the 
      lawfulness of the rent being charged.  The owner failed to submit the 
      requested information.

      Under Docket Number 46789, the Rent Administrator determined that due to 
      the owner's failure to submit a complete rental history, the tenant had 
      been overcharged in the amount of $5,231.28 including treble damages on 
      the overcharge occurring on and after April 1, 1984 and directed the 
      owner to refund such overcharge to the tenant as well as to reduce the 

      In this petition, the owner alleges that no overcharge exists and that 
      he was unable to provide a rental history during the proceeding before 


      the Administrator because of ongoing treatment for illness.  With his 
      petition, the owner submitted leases from 1978, a letter from his 
      physician, and a photocopy of N.Y.C. Conciliation and Appeals Board 
      Order No. 21,907 granting him an increase in rent due to a major capital 
      improvement, effective November 1981, along with a paid invoice for a 
      new stove and refrigerator for the subject apartment.

      In answer to the owner's petition, the tenant states, among other 
      things, that there had been no improvements made to her apartment. 

      The Commissioner is of the opinion that this petition should be denied. 
      Section 26-516 of the Rent Stabilization Law, effective April 1, 1984, 
      limited an owner's obligation to provide rent records by providing that 
      an owner may not be required to maintain or to produce rent records for 
      more than four (4) years prior to the most recent registration, and 
      concomitantly, established a four year limitation on the calculation of 
      rent overcharges.

      Section 2529.6 of the Rent Stabilization Code states, in pertinent part, 
      that review pursuant to that part shall be limited to facts or evidence 
      before a Rent Administrator as raised on the petition.  Since the leases 
      from the base date were not submitted in the proceeding before the 
      Administrator, they may not be considered on appeal.  The owner's 
      explanation of his failure to provide the requisite documents does not 
      negate the default, nor does it overcome the presumption of willfulness.

      With regard to the Major Capital Improvement (NY. C.A.B. Order No. 
      21,907), the Commissioner notes that the increase became effective 
      November 14, 1981.  Since the Administrator's default rent computation 
      was based on 1984 rents, the owner, in that default rent computation, 
      should have obtained the benefit of his increase for a major capital 
      improvement, and would not be entitled to additional credit for it.  
      Moreover, it is noted that even if an increase for a major capital 
      improvement were warranted there were errors in processing, including 
      not utilizing the lowest rent but rather the average of the stabilized 
      rents to compute the default rent, and failure to freeze the rent on 
      default, and application of the correct processing procedure would more 
      than negate any benefit to the owner based on the owner's MCI claim.  As 
      such, and in the absence of a timely petition for administrative review 
      by the tenant, the Commissioner finds it appropriate to deny this 
      portion of the appeal.

      Concerning the invoice for equipment, the Commissioner notes that since 
      it had not been submitted during the proceeding before the 
      Administrator, it may not be submitted for the first time on appeal.

      Based on the foregoing, a total overcharge of $5,231.28 occurred from   
      December 15, 1982 to December 31, 1985 including treble damages on the 
      overcharge occurring on and after April 1, 1984 and excess security.

      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 determination 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 

      This order may, upon the expiration of the period in which the owner may 
      institute a proceeding pursuant to Article 78 of the Civil Practice Law 
      and Rules, be filed and enforced in the same manner as a judgment or not 
      in excess of twenty percent per month thereof may be offset against any 
      rent thereafter due the owner.

      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.  The amount of the rent overcharge through  
      December 31, 1985 is $5,231.28.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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