DH410449RO
                             STATE OF NEW YORK
                    DIVISION OF HOUSING AND COMMUNITY RENEWAL
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      ------------------------------------X 
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. DH410449RO

                                          :  DISTRICT RENT OFFICE
           Stahl Associates,                 DOCKET NO. TA012466/TC080838G/
                                                        TC079617G
                                            
                                             TENANT: Shakrokh Nikkhah        

                            PETITIONER    : 
      ------------------------------------X                             

           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 
      rent.

      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 







          DH410449RO

      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 


          DH410449RO

      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 
      appeal.

      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.


      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner





    

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