DH 530372-RO;  EH 530100-RO

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

          ----------------------------------x     S.J.R. NOS.: 5360, 5362
          APPEAL OF                               DOCKET NOS.:             
                                                  DH 530372-RO
                 2461 AMSTERDAM COMPANY,          EH 530100-RO
                                                  RENT      ADMINISTRATOR'S
                                                  DOCKET NOS.: 
                                  PETITIONER      CE 530017-B 
          ----------------------------------x     DH 530210-OR

                                       IN PART

          The Commissioner has consolidated these petitions as they involve 
          common questions of law and fact.

          On August 25, 1989, the above-named owner filed  a  petition  for
          administrative review of an order issued on July 12, 1989,  by  a
          Rent Administrator concerning various housing  accommodations  in
          the premises known as 2461 Amsterdam Avenue, New York, New  York,
          wherein rent was reduced due to a diminution of services.

          On August 28, 1990, the Commissioner issued an order and  opinion
          granting the owner's petition in part and modifying the Re t  Ad-
          ministrator's order.

          Subsequent thereto, the  owner  sought  judicial  review  of  the
          Commissioner's August 28, 1990 order and opinion in  the  Supreme
          Court, County of New York pursuant to Article  78  of  the  Civil
          Practice Law and Rules.

          The court vacated the Commissioner's determination on the owner's 
          PAR and, remanded the proceeding to the Division of  Housing  and
          Community Renewal for reconsideration de novo.

          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 petition for  review.   Although  the
          petition was filed more than 35 days after the  issuance  of  the
          administrator's order, it is, nonetheless, deemed timely  due  to
          the administrator's failure to serve a copy of the order  on  the

          On March 17, 1988, various tenants of the subject building, filed 

          DH 530372-RO;  EH 530100-RO
          an application for rent reductions based on the  owner's  alleged
          failure to maintain services alleging, inter alia,  broken  front
          entrance steps, defective roof broken in need of tar, water leaks 
          to apartments on  fifth  floor,  defective  drainage  in  various
          apartments in the "A" line, and hallways and walls cracked and in 
          need of painting on floors 1, 2, 3 and 4.

          The tenants in their statement of complaint, provided the  admin-
          istrator with an incorrect  owner's  address.  In  reply  to  the
          administrator's request, the tenants on February  2,  1989,  sub-
          mitted the owner's correct address.  Service of the complaint  on
          the owner was effectuated on February 6, 1989.

          On March 24, 1989, the owner interposed an answer to the tenants' 
          complaint wherein it alleged that a  major  renovation  was  com-
          menced on August 23, 1988 and that work was still in progress.

          On April 6, 1989, a physical inspection of the  subject  building
          and certain apartments was carried out by the Division of Housing 
          and Community Renewal (DHCR).   The  inspector,  in  his  report,
          noted inter alia "that there was  no  evidence  of  broken  front
          entrance steps."  In regards to the roof  he  noted,  "there  are
          bubbles and patches in some areas.  Roof floor  appears  in  good
          to fair condition."  The inspector  confirmed  the  existence  of
          slow drainage in apartments 6-A and in the bathroom wash basin of 
          apartment 5-A.  In regard to the allegation regarding the hallway 
          walls on the first, second, third, and  fourth  floors,  the  in-
          spector stated that they had been patch plastered.  The inspector 
          noted peeling paint and plaster on the sixth floor. The remaining 
          items of complaint were found by  the  inspector  not  to  be  as
          alleged by the tenants.

          On July 12, 1989, the Rent Administrator issued  the  order  here
          under review finding that a diminution of services  had  occurred
          and reducing the tenants' rents to the levels in effect prior  to
          the last rent  guideline  increase  which  commenced  before  the
          effective date of the rent reduction, and reducing rents  of  the
          rent controlled apartments by eighteen dollars monthly.  The 

          items cited by the Rent  Administrator  as  bases  for  the  rent
          reduction were the following:

               1.    The  vestibule  steps  are  broken,  cracked   and
               2.   The roof is defective, requires repairs.
               3.   There is peeling paint and plaster  in  the  public
                    area hallways, walls and ceilings.
               4.   There is evidence of defective drainage  system  in
                    various apartments, wash basin stoppage.

          In its petition for  administrative  review  the  owner  requests
          reversal of  the  administrator's  order  alleging  that  it  was
          "arbitrary, capricious, and malicious," that it was never served
          with a copy of the decision, and that there was no verification
          of independent complaints.  Attached to the owner's petition  are
          a photocopy of the owner's answer, with proof of mailing,  copies
          of cancelled checks in payment of certain repairs and work on the 
          building, and copies of contractor's bills and contracts.

          DH 530372-RO;  EH 530100-RO

          In answer to the owner's petition the tenants allege, inter  alia
          that with the exception of the entrance steps, the complained  of
          conditions continue to exist.

          After careful consideration the Commissioner is  of  the  opinion
          that this petition should be granted in part and  that  the  Rent
          Administrator's order should be revoked as to all tenants  except
          the tenants of apartments 5-A and 6-A.  

          In regards to the four items cited as bases for the  rent  reduc-
          tions the Commissioner finds as follows:

            1. The vestibule steps were not  an  item  alleged  by  the
               tenants in the statement of complaint and the owner  was
               not on notice of this item.  Accordingly the finding  of
               the Rent Administrator was violative of due process  and
               can not be sustained.

            2. The roof was found to be in  "good  to  fair  condition"
               despite the bubbles and  patches  in  some  areas.   The
               gravamen of the tenants' complaint was that  the  apart-
               ment on the fifth floor  suffered  leaks.   The  inspec-
               tor's report and Rent Administrator's order  are  silent
               on the existence of fifth floor  apartment  leaks.   The
               Commissioner further notes that if a tenant's apartment
               has leak or water damage a tenant may obtain a re t  re-
               duction based thereon irrespective of causation  whether
               the source of the damage be faulty plumbing, a need for

               pointing, interstitial leakage, etc...  This  order  and
               opinion is issued  without  prejudice  to  the  tenants'
               rights to file complaints of decreased service in  their
               individual apartments due to leakage or water damage if
               the facts so warrant.  Hence, the Commissioner finds 
               that this item (2) - defective roof,  can  not  be  sus-
               tained as a basis for rent reductions.

            3. The tenants complained  of  cracked  walls  in  need  of
               painting on floors 1, 2,  3,  and  4.   The  inspector's
               report noted that these walls had been  patch  plastered
               and was silent on a  need  for  painting.   The  peeling
               paint and plaster condition cited  in  the  order  under
               review was based on the condition  found  on  the  sixth
               floor.  The tenants'  statement  of  complaint  did  not
               include any allegation of sixth floor damage, the  owner
               was not on notice of  the  condition  and,  accordingly,
               the Rent Administrator's  determination  regarding  this
               item was violative of due process and can  not  be  sus-
               tained as a basis for rent reductions.

            4. The Inspector's report cited evidence of  slow  drainage
               in apartments 5-A and 6-A. This item was alleged by  the
               tenants in their statement of complaint  and  the  owner
               was on notice of the complaint.  Hence, this  item,  the
               Commissioner finds, should be sustained as  modified  as
               a basis for rent reductions for the  tenants  of  apart-

          DH 530372-RO;  EH 530100-RO
          ments 5-A and 6-A; however, the drainage condition  does
               not pertain to any other tenants in  the  building.   As
               to the other tenants in  the  building  this  basis  for
               rent reductions can not be  sustained.   In  regards  to
               the tenants of apartments 5-A and 6-A  the  rent  reduc-
               tion  which  was  ordered  should  be   modified.    The
               Commissioner notes that the Rent Administrator made  the
               reductions effective July 2, 1988, but  that  the  owner
               was not served  with  a  copy  of  the  complaint  until
               February 6, 1989.  Since  the  owner  was  not  notified
               until February 6, 1989, the rent  reductions'  effective
               date should have been March  1,  1989,  the  first  rent
               payment date after  service  of  the  complaint  on  the
               owner. Accordingly,  the  Commissioner  finds  that  the
               administrator's order should be modified to  change  the
               effective date of the rent reductions from July 2,  1988
               to March 1, 1989.  The Commissioner further  notes  that
               the owner (in Docket No. DH 530210-OR) filed an

               application for rent  restoration on  November  2,  1989
               alleging inter alia that the  drainage  condition  cited
               herein had been  corrected  and  a  physical  inspection
               conducted   during   that   proceeding   revealed   that
               "drainage in all the apartments is in good worki g  con-
               tion."   Accordingly the  Commissioner  finds  that  the
               rents of apartments 5-A and 6-A should be  restored  ef-
               fective December 1, 1989.   (Therefore  rent  reductions
               are sustained for apartment 5-A and 6-A for  the  period
               March 1, 1989 through Novmber 30, 1989.)

          In regard to the owner's petition EH  530100-RO  which  has  been
          consolidated herein, the Commissioner finds that it  is  rendered
          moot by the issuance of this order and opinion and that it should 
          be terminated.   The  Rent  Administrator's  order  DH  530210-OR
          should be modified in accordance with the Commissioner's findings 
          herein cf. supra paragraph 4.

          Although by issuance of this order and opinion  the  Commissioner
          revokes all rent reductions with the exception of apartments  5-A
          and 6-A based upon lack of notice and a violation of due process, 
          the Commissioner notes that since the issuance of  Order  No.  CE
          530017-B on July 12, 1989 the owner has been  on  notice  of  the
          defective conditions which were  noted  by  the  DHCR  inspector.
          Accordingly, the owner is directed to  correct  these  conditions
          within thirty days of the issuance of this order and  opinion  if
          it has not already done so.  The tenants are  advised  to  notify
          the Compliance Bureau of this Division  in  the  event  that  the
          owner, at the expiration of this period, has failed to do so.

          If there are arrears due the owner as a result of the issuance of 
          this order and opinion the tenants may pay off  such  arrears  in
          twelve equal monthly installments beginning with the  first  rent
          payment date after the issuance of this order and opinion.

          DH 530372-RO;  EH 530100-RO
          THEREFORE, in accordance with  the  Rent  Stabilization  Law  and
          Code, it is

          ORDERED, that this petition  (DH  530372-RO)  be,  and  the  same
          hereby is, granted in part, and  that  the  Rent  Administrator's
          order (CE 530107-B) be, and the same hereby is revoked as to  all
          tenants except the tenants of apartments 5-A and 6-A for whom  it

          ORDERED, that Rent Administrator's order CE 530017-B be, and  the
          same hereby is, modified to the extent of granting rent  reduc-
          tions for the period March 1, 1989 through November 30, 1989  and
          it is further 

          ORDERED, that Rent Administrator's order DH 530210-OR be, and the 
          same hereby is revoked as to all tenants except  the  tenants  of
          apartments 5-A and 6-A for whom it is 

          ORDERED, that Rent Administrator's order DH 530210-OR be, and the 
          same hereby is modified to the extent of restoring rent effective 
          December 1, 1989, and it further

          ORDERED, that administrative review proceeding EH  530100-RO  be,
          and the same hereby is, terminated.


                                                ELLIOT SANDER
                                                Deputy Commissioner


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