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

     ------------------------------------X  SJR 4728
     APPEAL OF                              DOCKET NO.: DI 410298-RO
       A & V HOLDING CORP.                  DRO DOCKET NO.: L 3116962-RT

                           PETITIONER    : 


     The abovenamed petitioner owner filed a timely Petition for Administrative 
     Review  against  an  order  issued  on  August  15,  1989  by   the   Rent
     Administrator concerning the housing accommodation known as  98  Riverside
     Drive, Apartment 4B, Manhattan.

     The owner subsequently instituted an Article  78  proceeding  based  on  a
     "deemed denial" of the petition and the proceeding  was  remitted  by  the

     The tenant, Casper Schmidt, filed a complaint of  overcharge  and  a  fair
     market rent appeal on or  about  March  31,  1984  alleging,  among  other
     things, that he took occupancy on December 1, 1980 under a 2 year lease at 
     a rent of $900.00.  A full rental history was submitted.

     The herein appealed order of the Rent  Administrator  impliedly  dismissed
     the fair market rent appeal but found a total  overcharge  of  $41,981.12,
     including interest, through August 31, 1989.   The  Administrator  further
     found that the apartment had continually been occupied both  residentially
     and commercially (psychiatrist's office) and  is,  therefore,  subject  to

     The Administrator's finding as to residential occupancy was based  on  the
     allegations of the tenant (discussed more  fully  infra)  and  documentary
     evidence including income tax returns going back to 1980.

     The owner has urged throughout this proceeding that the  apartment  should
     be exempt from stabilization because it  was  rented  under  a  commercial
     lease as a psychiatrist's office and the original and all  renewal  leases
     contained specific provisions that it would not be used as a dwelling  and
     that the tenant's complaints are in bad faith as evidenced by his being in 
     occupancy for almost 4 years without prior complaints.

     The tenant alleged that his residential as well as professional use of the 
     apartment has always been open and notorious; that when he was first shown 
     the apartment by a Mr. and Mrs. Hank Sobel of West 79th Street  Realty  as
     the owner's "agents"  he  advised  them  of  his  intentions  to  use  the
     apartment  residentially  and  was,  in  fact,  accompanied  by  his   own
     contractor with whom he discussed various changes to make the apartment 

     more suitable for both purposes; that the apartment has always been freely 
     available for inspection and various repairmen employed by the owner  have

          DOCKET NUMBER: SJR 4728; DI 410298-RO
     observed his use of the apartment; that the owner never made any objection 
     to his use; that he is not a native New Yorker and was unsophisticated  in
     rent control and stabilization and only became aware of  his  rights  upon
     reading a 1984 New York  Times  article;  and  that  the  owner's  use  of
     commercial leases is a subterfuge.

     The owner alleges that the  abovenoted  Sobels  were  never  employees  or
     agents of the owner and any fee paid them must have been  by  the  tenant,
     not the owner; that the owner  never  had  any  occasion  to  inspect  the
     apartment and the superintendent never observed the tenant  using  it  for
     other  than  professional  purposes  (submitting  an  affidavit  from  the

     The owner  further  urges,  among  other  things,  that  the  evidence  of
     residential occupancy submitted by the tenant is all  self  serving;  that
     the overcharges should, at most, have been computed back only to when  the
     owner was notified of the proceeding before  this  agency;  and  that  the
     Commissioner should "apportion the rent" to reflect the commercial use  of
     the apartment.

     The Commissioner is of the opinion that the petition  should  be  remanded
     for further processing.

     The record contains conflicting allegations and contentions all  of  which
     presently appear consistent with the evidence thusfar in the record

     The Commissioner finds, therefore,  that  a  hearing,  on  notice  to  all
     parties, is necessary to ascertain the facts and circumstances surrounding 
     the renting and usage of the apartment including  the  actual  intentions,
     expectations and knowledge of the parties at all relevant times.

     The proceeding is being remanded for such purposes.

     THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

     ORDERED, that this petition be, and the same hereby  is,  granted  to  the
     extent of remanding this proceeding to the Rent Administrator for  further
     processing in accord  herewith.   The  order  of  the  Rent  Administrator
     remains in full force and effect  except  that  the  direction  to  refund
     overcharges is stayed until a new order is issued on remand.


                                          ELLIOT SANDER
                                        Deputy Commissioner


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