DJ 110173 RO

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

          APPEAL OF                              DOCKET NO. DJ 110173 RO
                                              :  DRO DOCKET NO.Q-312245-RT
                                                          JONATHAN TAPLEY
                                PETITIONER    : 

               On October 19, 1989, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          September 19, 1989, by the Rent Administrator, Gertz Plaza, Queens, 
          New York, concerning the housing accommodations known as 36-05 
          Vernon Blvd., Queens, New York, Apartment No. 3R, wherein the Rent 
          Administrator determined the fair market rent pursuant to 
          the special fair market rent guideline promulgated by the New York 
          City Rent Guidelines Board for use in calculating fair market rent 

          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 warranted.

          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 fair market rent adjustment application by the 
          tenant who took occupancy of the subject apartment on December 1, 
          1983, at a rental of $600.00 per month.

          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 comparability data for determining the fair market rent 

          DJ 110173 RO
          of the subject apartment and to submit proof of any improvements 
          made in the subject apartment.

          In response, the owner stated in substance that it made 
          extensive renovations in the subject apartment and was entitled to 
          charge a fair market rent of $600.00.  As comparables, the owner 
          cited 1983 rents for apartments 1R, 2R, 4R, 1L, 2L, 3L and 4L, but 
          did not submit proof of service of the Initial Legal Regulated 
          Rent Notice (hereafter DC-2 Notice) with respect to any of the 
          above cited apartments or state when such apartments first became 
          subject to rent stabilization although directed to do so.  The 
          owner did submit bills and cancelled checks showing it made 
          expenditures totalling $5764.54 for renovations, improvements and 
          maintenance work made in the subject apartment immediately prior 
          to occupancy by the tenant herein.

          In Order Number Q-3122245-RT, the Rent Administrator adjusted 
          the initial legal regulated rent by establishing a fair market 
          rent of $459.71 (including an allowance of $121.61 for the 
          apartment improvements based on a total allowed cost of $4864.54) 
          effective December 1, 1983, the date of initial occupancy of the 
          tenant herein and directed the owner to refund $11,030.47 in 
          excess rent to the tenant.  Based on the failure to submit usable 
          June 30, 1974 or usable post June 30, 1974 comparability data, the 
          Rent Administrator determined the fair market rent using the 
          special fair market rent guidelines alone plus the allowance for 
          the improvements.

          In this petition, the owner contends in substance that the 
          total allowable cost for the improvements should have been 
          $5,964.43 plus $2,000 for the owner's labor as the general 
          contractor; that comparable rents of other apartments should have 
          been used; that the tenant has sublet the subject apartment to 
          others so that additional rent should be charged; that the subject 
          apartment underwent such extensive renovation it should be 
          considered as a newly created apartment; and that the issuance of 
          the Rent Administrator's order in 1989 deciding a tenant's 
          complaint filed in March, 1984, took too long and violates the 
          Statute of Limitations.

          The Commissioner if 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 in the 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 

          DJ 110173 RO
          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, 1974 to submit such data for 
          complete lines of apartments 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 submits 
          proof of service of a DC-2 Notice or apartment registration form 
          indicating that the rent is not subject to challenge.

          The records in this case indicate that the owner was afforded 
          an opportunity to submit June 30, 1974 and post June 30, 1974 
          comparability data as outlined above, but failed to submit usable 
          data.  The rental data submitted was incomplete as the owner did 
          not submit proof of service of the DC-2 Notice and did not 
          indicate when the apartments were rented to the first rent 
          stabilized tenants.  Accordingly, the Rent Administrator correctly 
          did not consider the comparability data in determining the fair 
          market rent of the subject apartment.

          With regard to the owner's contention that the allowance for 
          the improvements should have been based on a total cost of 
          $7,964.43, it is noted that the Rent Administrator properly found 
          a total allowable cost of $4864.54.  This was based on the owner's 
          bills for expenditures submitted at the Rent Administrator's level 
          which totalled $5764.54, $900.00 of which was attributed to 
          painting and properly disallowed as maintenance.  The owner never 
          claimed a $200.00 plumbing cost and a $2,000 labor cost for the 
          owner as a "general contractor" in the proceeding before the Rent 
          Administrator and these costs cannot properly be considered for 
          the first time on the review level.  Moreover the $200.00 for 
          plumbing appears to be for normal repairs and maintenance and the 
          $2,000 "general contractor" cost for the owner as general 
          contractor is totally unsubstantiated.

          The Commissioner is of the opinion that the renovation work 
          done in the subject apartment was not so extensive as to be 
          considered the creation of a new apartment warranting a first 
          rent.  Further, the owner's contention that the issuance of the 
          Rent Administrator's order in 1989 took too long and violates the 
          Statute of Limitations is without merit since there is no 
          restriction on the amount of time a Rent Administrator may take 
          to decide a tenant's complaint.  Finally the owner's allegation 
          that the tenants are subletting the subject apartment is not 
          relevant to the determination of the fair market rent.

          Because this determination concerns lawful rents only through 

          September 30, 1989, 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 adjustment.

          DJ 110173 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 tenant may credit the excess rent against the next 
          month(s) rent until fully offset.

          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.


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner



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