DG 410079 RO
                             STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEAL OF                              DOCKET NO. DG 410079 RO

                                          :  DISTRICT RENT OFFICE
           Irving Golden,                    DOCKET NO. L 3113076 R
                                             TENANT: William Hunsinger        
                            PETITIONER    : 


      On July 11, 1989, the above-named petitioner-owner timely refiled a 
      Petition for Administrative Review against an order issued on May 24, 
      1989, by the Rent Administrator, Gertz Plaza, Jamaica, New York, 
      concerning the housing accommodations known as 315 West 14th Street, 
      New York, New York, Apartment No. 4E, wherein the Rent Administrator 
      determined the fair market rent pursuant to the special fair market 
      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 Law.

      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 in March 1984 by the filing of 
      a complaint of rent overcharge by the tenant who took occupancy of the 
      subject apartment on August 22, 1983 at a rental of $300.00 per month.

      During the processing of the tenant's complaint, the tenant requested 
      the Rent Administrator to consider the complaint as a fair market Rent 
      Appeal (hereafter FMRA) because the first stabilized tenant (L. Parrish) 
      was never served a copy of the Notice of Initial Rent (hereafter DC-2).
      The owner was served with a copy of the tenant's application and 
      afforded an opportunity to submit June 30, 1974 or post June 30, 1974 

          DG 410079 RO

      comparability data for determining the fair market rent of the subject 
      apartment and to submit proof of any improvements made in the subject 

      In response, the owner stated in substance that a DC-2 Notice was served 
      on the prior tenant (L. Parrish) who was the first stabilized tenant in 
      the subject apartment and no challenge was filed within 90 days and 
      therefore the owner was entitled to charge a fair market rent of 

      The owner was requested by the Rent Administrator to submit proof of 
      service of the DC-2 form on the first stabilized tenant but failed to do 

      In Order Number ZL 3113076 R, the Rent Administrator adjusted the 
      initial legal rent by establishing a fair market rent of $196.50 
      effective September 8, 1982, the date of the first stabilized lease.

      In this petition, the owner contends in substance that only the first 
      stabilized tenant may file a FMRA and that the complainant was the 
      second stabilized tenant; that the Rent Administrator used an incorrect 
      1980 MBR as the basis of the Fair Market Rent and that the correct 1980 
      MBR was $218.30.  The owner submitted leases for the E line in the 
      subject building, proof of mailing of the RR1 forms for the E line and 
      an affidavit from the prior tenant (L. Parrish) acknowledging receipt of 
      the DC-2 form.

      In answer to the owner's petition, the tenant stated in substance that 
      the DC-2 notice was never served on the prior tenant (L. Parrish) and 
      submitted notarized statements from the prior tenant attesting to non- 
      receipt of the DC-2 notice and repudiating the affidavit in the owner's 

      The tenant's submission was served on the owner who was given an 
      opportunity to respond.

      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 int he 
      same area for substantially similar housing accommodations, it is DHCR's 
      procedure for fair market rent appeal cases filed prior to April 1, 1984 
      to allow owners' to submit June 30, 1974 fair market rental 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 apartment 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 submit 

          DG 410079 RO

      proof of service of a DC-2 Notice or apartment registration form 
      indicating that the rent is not subject to challenge.

      An examination of the records in this case discloses that in the 
      proceeding before the Rent Administrator, the owner did not submit 
      either comparables or proof of service of the DC-2 notice although 
      afforded an opportunity to do so and has not submitted a reasonable 
      excuse for its failure to do so.  Since this is not a de novo proceeding 
      the owner's contention with regard to service of the DC-2 notice and 
      comparability cannot be considered for the first time on appeal.

      A further examination of the record in this case discloses that the Rent 
      Administrator used the correct 1980 MBR as indicated in the rent control 
      records on file with agency in calculating the fair market rent.

      The Commissioner rejects the owner's contention that the complainant is 
      precluded from challenging the Initial Rent.

      Section 26 of the former Rent Stabilization Code provides in pertinent 
      part that after service of the Notice of Initial legal Regulated Rent 
      also designated as the DC-2 Notice) on the first tenant taking occupancy 
      of a formerly rent controlled unit, the time within which such a tenant 
      may file a FMRA is limited to 90 days after such notice was mailed to 
      the tenant by the owner by certified mail.

      In the instant case, the owner failed to show that the prior or 
      subsequent tenant was served the DC-2 notice by certified mail as 

      Accordingly, the Rent Administrator's order was warranted.

      During the Pendency of the Appeal, the prior tenant (L. Parrish) 
      submitted a request to be included as a party to the proceeding.

      The owner was served a copy of the prior tenant's request and given an 
      opportunity to respond.

      Section 2526.1C of the current Rent Stabilization Code provides for the 
      inclusion of any affected tenant in any proceeding commenced by DHCR.

      Accordingly, the Commissioner has calculated a refund of $1,138.50 which 
      is due the prior tenant for the 11 on this of his occupancy from 
      September 1, 1982 through July 31, 1983 ($300.00 minus $196.50 - $103.50 
      per month x 11 months = $1,138.50).

      The owner is directed to refund the excess rent to the prior tenant (L. 

      The Commissioner notes that the complainant has also vacated the subject 
      apartment but has forwarded a current address.

      Because this determination concerns lawful rents only through           
      November 22, 1988, the owner is cautioned to adjust subsequent rents to 
      an amount no greater than that determined by the Rent Administrator's 
      order plus any lawful increases, and to register any adjusted rents with 
      this order and opinion being given as the explanation for the 

          DG 410079 RO

      If the owner does not take appropriate action to comply with this order 
      within sixty days from the date of issuance of this order, the tenants 
      herein may bring an appropriate action in a court of competent 

      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.  A copy of the order is being served on 
      the current occupant of the subject apartment.


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner


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