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

          APPEAL OF                               DOCKET NO.:  DJ430035RO
          301 REALTY CO.                          RENT
                                                  ADMINISTRATOR'S DOCKET 
                                                  NO.: CJ430139B


               On September 29, 1989 the above named petitioner-owner filed 
          a Petition for Administrative Review against an order of the Rent 
          Administrator issued August 30, 1989. The order concerned various 
          housing accommodations located at 301 East 38th Street, New York, 
          N.Y.  The Administrator directed restoration of services and 
          ordered a rent reduction for failure to maintain required services.  

               The Commissioner has reviewed the record and carefully 
          considered that portion relevant to the issues raised by this 

               This proceeding was commenced on October 25, 1988 when 87 of 
          the 154 tenants filed a Statement of Complaint of Decrease in 
          Building-Wide Services wherein they alleged that the owner was not 
          maintaining certain services including cracked sidewalks, courtyard 
          in poor condition, bulkheads and skylights in poor condition, 
          leaning vent stacks, exterior walls and public area windows in poor 
          condition, rusted fire escapes, discontinuation of storage space 
          and the fact that one passenger elevator is now being used as a 
          service elevator.

               The owner was served with a copy of the complaint and afforded 
          an opportunity to respond. The owner did not file a response.
               The Administrator ordered a physical inspection of the subject 
          building.  The inspection was conducted on May 4, 1989 and May 8, 
          1989. The inspector reported the following:

                    1.   Entire building undergoing extensive renovation 
                         including courtyard and exterior walls,


                    2.   Sidewalk cracked,

                    3.   Bulkheads and skylights in poor condition,

                    4.   Vent stacks leaning,

                    5.   Public area windows in poor condition,

                    6.   Rusted fire escapes,

                    7.   Discontinuation of storage space,

                    8.   One elevator being used as freight elevator.

          All other services complained of were found to be maintained. 

               The Administrator issued the order here under review on August 
          30, 1989.  With regard to rent controlled tenants, a rent reduction 
          of $27.00 per month was ordered.  Rent stabilized tenants were 
          granted a rent reduction of an amount equal to one guideline 

               On appeal the owner, as represented by counsel, states that 
          the tenants have used this rent reduction proceeding as a vehicle 
          to undermine the conversion to cooperative ownership that is taking 
          place in the building and that the building is undergoing extensive 
          renovations in conjunction with the conversion.  The owner then 
          presents a defense to each of the cited conditions in the order 
          here under review and requests that the order be revoked.  The 
          petition was served on the tenants on February 26, 1990.

               The tenants filed a detailed joint response on March 1, 1990 
          and stated, in sum, that the owner's petition is totally without 
          merit, that the owner was not maintaining services and that the 
          order here under review should be affirmed.  One individual tenant 
          filed a response on March 19, 1990 and stated, in relevant part, 
          that the storage space was not being provided to the tenants but, 
          rather, was being used by the owner for storage of renovation 
          material and debris.
               After careful review of the evidence in the record, the 
          Commissioner is of the opinion that the petition should be granted 
          in part and the order here under review should be affirmed as 

               With regard to all issues other than the Administrator's 
          findings regarding the courtyard and exterior walls, the 
          Commissioner notes that the scope of review in an administrative 
          appeal is limited to facts or evidence presented to the 
          Administrator unless it can be shown that such facts or evidence 


          could not be presented.   The owner was served with a copy of the 
          complaint and afforded an opportunity to respond.  The owner did 
          not file a response and has offered no explanation to excuse this 
          default.  Therefore, the Commissioner will not consider the 
          defenses the owner raises in the petition.

               With regard to the findings regarding the courtyard and 
          exterior walls, the Commissioner has reviewed the record and is of 
          the opinion that the inspector's report that the building is 
          undergoing extensive renovation does not constitute a failure to 
          maintain required or essential services for which a rent reduction 
          is warranted.  The inspector did not find that the courtyard or 
          exterior walls were defective in any way--only that they were being 
          renovated.  Accordingly, the Commissioner revokes these two 
          findings and the $6.00 per month in rent reduction ordered for rent 
          controlled tenants.  With regard to rent stabilized tenants, the 
          order here under review is modified to delete the two findings, the 
          rent reduction ordered for rent stabilized tenants is affirmed and 
          the automatic stay of the retroactive rent abatement that resulted 
          by the filing of this petition is vacated upon issuance of this 
          order and opinion.

               The Commissioner notes that the owner applied for rent 
          restoration.  The application, which was assigned Docket No. 
          DI430130OR, was granted in part for rent controlled tenants and 
          denied for rent stabilized tenants in an order issued on April 19, 
          1990.  The owner reapplied for rent restoration and said 
          application was granted in an order bearing Docket No. EE430008OR 
          which was issued on February 15, 1991.

               THEREFORE, pursuant to the Rent Stabilization Law and Code and 
          Rent and Eviction Regulations for New York City it is 

               ORDERED, that this petition be, and the same hereby is, 
          granted in part, and that the Rent Administrator's order be, and 
          the same hereby is, affirmed as modified herein.  Any rent 
          controlled tenant who owes arrears by reason of the Commissioner's 
          determination herein may pay off said arrears in installments of 
          $6.00 per month or immediately if the apartment is vacated.


                                             JOSEPH A. D'AGOSTA
                                             Deputy Commissioner


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