DK 410109 RO; DJ 410206 RT

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

      APPEAL OF                              DOCKET NO. DK 410109 RO
                                                        DJ 410206 RT

                                          :  DISTRICT RENT OFFICE
           Alfred Knobler,                   DOCKET NO. ZTA 12172/
                and                                     TC 082664 G
           Village Brokers, Inc.
           Victor Castelli, 
                                             TENANT: Victor Castelli     

                              PETITIONERS : 


      On November 8, 1989, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on October 3, 1989, by 
      the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 6 East 10th Street, 
      New York, New York, Apartment No. 4R, 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 appeals.

      On October 30, 1989, the above-named petitioner-tenant filed a petition 
      for administrative review against the aforementioned order.  These 
      petitions are being consolidated for disposition herein.

      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 Appeals are 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 

      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 appeals.  

      This proceeding was originally commenced in February 1984 by the filing 
      of a fair market rent adjustment application (hereafter FMRA) by the 

          DK 410109 RO; DJ 410206 RT

      tenant who took occupancy of the subject apartment on January 1, 1984 at 
      a rental of $781.32 per month.

      In addition, the tenant filed a complaint of rent overcharge on February 
      15, 1984.

      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 of the subject 
      apartment and to submit proof of any improvements made in the subject 

      The owner was also served a copy of the tenant's complaint of rent 

      By notice to both parties, the Rent Administrator consolidated the 
      tenant's complaints on December 31, 1987.

      In response, the owner submitted leases for the subject apartment in 
      effect from April 15, 1974.  The owner failed to submit either a copy of 
      the notice of Initial Legal Regulated Rent (DC-1 or DC-2) with proof of 
      service on the initial or a subsequent stabilized tenant nor comparable 
      apartments for consideration for comparability.

      In Order Number ZTA 12172/TC 082664G, the Rent Administrator adjusted 
      the initial legal regulated rent by establishing a fair market rent of 
      $283.22 (excluding comparability) effective April 15, 1974 and re- 
      computed the subsequent rents.

      In this petition, the owner contends in substance that the Rent 
      Administrator erred in requesting comparability data exceeding the 4 
      year limitation, in that the order contravenes the JRD decision limiting 
      rent history requests to 4 years as provided in Section 26-516(g) of the 
      Rent Stabilization Law; that there exists ambiguity due to the notices 
      sent for the tenant's multiple docket numbers for both the subject 
      apartment and another apartment in the building in which the tenant 
      resided prior to the subject apartment; that the owner was not afforded 
      sufficient time to respond because the order was issued on the last day 
      that the owner could have submitted evidence; that the owner should be 
      allowed to supplement its' petition to submit comparability; that 
      apartment 4R is unique because it is the only apartment in the building 
      with a terrace; and that the fact that the tenant ceased to pay rent in 
      January 1989 should be reflected in the order.

      In answer to the owner's petition, the tenant states in substance that 
      the owner's petition should be denied because the owner's contention 
      that it had insufficient time to respond is without merit; that the 
      owner who had held title to the subject building since 1969 was served 
      in early 1984 and subsequently in 1989 but never submitted 
      comparability data; that the owner's citation of JRD was in error and 
      that the Lavanant decision upheld DHCR's right to request rental records 
      beyond 4 years in cases filed prior to April 1, 1984; and that apartment 
      4R is not unique due to the terrace the tenant cited apartment 3R as 
      another terraced apartment in the building.  Further, the tenant 
      reiterates issues presented in his own petition.

      In his petition, the tenant contends in substance that the Rent 
      Administrator's order should be modified to address the issue of the 

          DK 410109 RO; DJ 410206 RT

      owner's failure to allow a two year lease option to the tenant when he 
      took occupancy of the subject apartment in January 1984 and to impose 
      treble damages.  The tenant submitted a copy of his letter dated 
      November 7, 1985 addressed to the Rent Administrator in which the tenant 
      raised the issue of the owner's failure to allow a two year vacancy 
      lease option. 

      In answer to the tenant's petition, the owner stated in substance that 
      the vacancy lease was negotiated to the tenant's benefit in being 
      allowed to transfer from apartment 5F to a larger terraced apartment 
      (4R); that the tenant never requested a two year option; and that the 
      owner had never seen the tenant's correspondence requesting a two year 
      The Commissioner is of the opinion that these petitions should be 

      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 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, 1984 to 
      submit such data for complete lines of apartment 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.

      An examination of the record in this case discloses that the complaints 
      were filed prior to April 1, 1984 and the owner was advised on March 7, 
      1984 of the pending complaints and of the requirement to preserve rental 
      records.  Additionally, the owner was directed on August 10, 1984, July 
      21, 1986 and October 27, 1988 to submit all leases from the base date 
      and the owner complied with the directive by the submission of complete 
      leases for the subject apartment from April 15, 1974 to October 25, 

      Further, the owner was served the tenant's application and the FMRA 
      package on May 7, 1984, September 18, 1984, October 27, 1988 and 
      September 12, 1989 which advised the owner of the above cited 
      requirements for comparability submissions and which listed the subject 
      apartment and correct docket numbers.  The Rent Administrator's order 
      was issued in a timely fashion and not prior to the 21st day from the 
      date of mailing of the last notice to the owner in which the owner was 
      advised that all submissions must be made within a 20 day period.

          DK 410109 RO; DJ 410206 RT

      Moreover, the owner has fail to submit comparability data either below 
      or on appeal.

      The Commissioner, therefore, rejects the owner's contention that it had 
      insufficient time to submit comparability data as without merit.

      The Commissioner rejects the owner's contention that Section 26-516(g) 
      precluded the Rent Administrator from requesting comparability data 
      beyond the 4 year limitation period.  Section 26-516(g) was promulgated 
      for cases filed after 1984 and specifically excludes FMRA, therefore it 
      is not applicable to the instant case.  Moreover, the owner's reliance 
      on the JRD decision is misplaced as that decision is determinative for 
      overcharge cases filed for dwelling units located in the Second 
      Department and does not apply to FMRA proceedings.  In addition, the 
      owner was not required to submit comparability data, but had the option 
      to do so.

      With regard to the owner's contention that it be permitted to supplement 
      its petition to submit comparability data, the Commissioner notes that 
      since this is not a de novo proceeding, it would be inappropriate to 
      consider any comparability submission for the first time on appeal.  
      Moreover, the owner filed its' petition in 1989 and as of September 1992 
      has failed to file any supplement to its petition.

      The Rent Administrator's order calculated the lawful stabilization rent 
      and amount of refund only through December 31, 1988 and, therefore, that 
      portion of the owner's petition seeking to amend the order to reflect 
      that the tenant ceased to pay rent on January 1989 is rejected as being 
      without merit.

      With regard to the tenant's contention that the Rent Administrator 
      failed to address the tenant's ancillary complaint that the owner did 
      not allow him a 2 year option for his vacancy lease but coerced him to 
      execute a one year vacancy lease, the Commissioner notes that that issue 
      was not part of the original complaints filed on February 1, 1984 and 
      February 15, 1984 which were served on the owner.  Although Section 
      2527.10 of the Rent Stabilization Code provides in pertinent part that 
      an applicant or complainant shall have the right to amend the 
      application or complaint in writing prior to the time within which an 
      answer may be filed, it is noted that in the instant case, the tenant 
      first raised the issue of the owner's failure to allow the tenant the 
      option of more than a one year vacancy lease in a letter to the Rent 
      Administrator dated November 7, 1985.  This was in excess of the time 
      period in which to amend the complaints filed February 1, 1984 and 
      February 15, 1984 and therefore the Rent Administrator was not obligated 
      to consider the ancillary complaint.

      Accordingly the Commissioner rejects the tenant's contention that the 
      Rent Administrator erred in failing to consider the ancillary complaint 
      and adjust his vacancy lease term.

      With regard to that portion of the tenant's petition requesting the 
      imposition of treble damages, the Commissioner notes that Section 
      2526.1(a) of the Rent Stabilization Code which provides for the 
      imposition of treble damages specifically excludes FMRA.

      Accordingly, the Rent Administrator's order was warranted.

          DK 410109 RO; DJ 410206 RT

      Because this determination concerns lawful rents only through           
      December 31, 1988, 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 

      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 

      THEREFORE, in accordance with the provisions of the Rent Stabilization 
      Law and Code, it is

      ORDERED, that these petitions for administrative review be, and the same 
      hereby are, 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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