STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. DH410449RO
: DISTRICT RENT OFFICE
Stahl Associates, DOCKET NO. TA012466/TC080838G/
TENANT: Shakrokh Nikkhah
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE APPEAL
On August 30, 1989, the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on July 31, 1989 by
the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the housing accommodations known as 360 East 55th Street,
apartment 6A, New York, New York, wherein the Administrator established
the Fair Market Rent and directed the owner to refund to the tenant
excess rent in the amount of $55,386.83.
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 when the tenant filed three Fair Market
Rent Appeals between December 23, 1983 and March 4, 1984 which were
consolidated under Docket Number TC079617G by Order dated September 26,
1986. The tenant stated that he had moved into the subject apartment on
November 1, 1982 at a monthly rent of $1500.00, that the rent controlled
rent was $140.00 and that he had not been served with a Notice of
Initial Legal Regulated Rent (hereafter DC-2 form).
In answer to the complaint, the owner asserted that the tenant was not
entitled to file the complaint since he was not the initial rent
stabilized tenant and that the initial rent stabilized tenant had been
served with a DC-2 form but had not challenged the initial stabilized
In reply, the tenant disputed that the prior tenant had been served with
a DC-2 notice and submitted a letter allegedly from the prior tenant
denying receipt of a DC-2 form.
The owner submitted an undated certified mail receipt addressed to the
prior tenant and a return receipt card signed by the doormen as well as
the doorman's affidavit that he had forwarded it to the prior tenant.
Subsequently, at a hearing conducted to determine whether the prior
tenant had been served with the DC-2 form, it was found that the owner
was unable to establish that the first rent stabilized tenant had been
served with the DC-2 form and that the complainant's Fair Market Rent
Appeal had been timely filed.
In the subsequent processing of the proceeding the owner was afforded an
opportunity to submit for the comparability study, one of two criteria
which may be considered in establishing the Fair Market Rent, either
June 30, 1974 free market rents or rental history data for apartments
recently rented on the post - ETPA "Free Market" (updated comparables).
The owner was unable to submit updated comparables but did submit
comparable rents of other decontrolled apartments on June 30, 1974,
three of which were usable in the comparability study.
In the order here under appeal, the Administrator granted the tenant's
Fair Market Rent Adjustment application and adjusted the fair market
rent to $782.95 effective June 1, 1982 through May 31, 1983. The
Administrator directed the owner to refund excess rent of $55,386.83 for
the period from November 1, 1982 through August 31, 1988.
In its appeal, the owner contends that the order should be reversed for
the following reasons:
1) the Agency erred in concluding that the initial rent stabilized
tenant had not been served with a DC-2 notice;
2) the finding reduces the rent below a reasonable market level and
is contrary to Section 2502.3(2) which require that the rent
adjustment not result in a rent substantially different from the
rents generally prevailing in the same area; The owner submitted
additional comparability data along with its appeal.
3) the Administrator failed to consider the cost of repairs made to
the subject apartment before the tenant moved in, 1/40th of which
should be included in the rent.
The Commissioner is of the opinion that this petition should be denied.
The record reveals that the Administrator based its finding on the
tenant's eligibility to file a Fair Market Rent Appeal upon credible
evidence and upon the recommendation of the Administrative Law Judge
after a hearing was held on January 7, 1987. The owner has not
presented any cause to question the finding. Accordingly, the
Commissioner affirms the Administrator's determination to process the
tenant's Fair Market Rent Appeal on the merits.
An apartment's fair market rent is determined on the basis of two
criteria: 1) a special guidelines order used solely in the determination
of Fair Market Rents and 2) rents generally prevailing in the same area
for substantially similar housing accommodations, commonly known as the
comparability test. The results of each of these two criteria are
averaged to determine the fair market rent. If no usable comparability
data is available, the special guidelines alone will be used. For Fair
Market Rent Appeals filed before April 1, 1984, comparability will be
determined on the basis of either the average of June 30, 1974
comparability data increased by one year standard guidelines and vacancy
allowance for the tenant's initial lease term or updated comparability -
stabilized rents commencing with in a period one year before or one
year after the initial stabilized renting of the subject apartment.
The record reveals that the owner submitted June 30, 1974 rents for a
line of apartments at 405 East 54th Street, a building similar to the
subject building; the data of three apartments was suitable for the
study. The owner also cited the subject line of apartment in the
subject premises but all these apartments were subject to rent control
on June 30, 1974. The record further discloses that the owner stated,
in response to the opportunity to submit updated comparables that it had
no further comparability data available. As a review of the record
reveals that the owner had full and fair opportunity to submit all
relevant comparability data and the scope of review is limited to facts
and evidence before the Administrator, the Commissioner rejects the
owner's request for consideration of additional data submitted with the
Similarly, with respect to the owner's claim for additional rent for
repairs, the Commissioner notes that an administrative appeal is not de
novo and is limited to facts and evidence as presented to the
Administrator for consideration unless the petitioner establishes that
certain facts or evidence could not reasonably have been offered prior
to the issuance of the order being appealed.
The owner's statement that its managing agent had prepared the
documentation for the proceeding below whereas it was preparing the
documentation for the appeal does not establish that a claim for repairs
(which the owner admits was not submitted to the Administrator) could
not reasonably have been offered in the proceeding below. Accordingly,
the Administrator did not err in failing to consider such claim.
The record indicates that the complainant has moved from the subject
accommodations; a copy of this order and opinion is being sent to the
current tenant in occupancy.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, denied and that
the Rent Administrator's order be, and the same hereby is, affirmed.
JOSEPH A. D'AGOSTA