DK410168RO, DK410381RT
                             STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEALS OF                             DOCKET NO. DK410168RO

                                          :  DISTRICT RENT OFFICE
           Alfred Knobler,                   DOCKET NO. ZTA012319 
           Village Brokers, Inc.
           Victor Castelli, 
                                             TENANT: Victor Castelli     

                              PETITIONERS : 


      On November 21, 1989, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on October 18, 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. 5F, 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 November 13, 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 
      tenant who took occupancy of the subject apartment on January 1, 1981 at 

          DK410168RO, DK410381RT

      a rental of $571.29 per month.

      The tenant vacated the subject apartment on December 31, 1983 and 
      relocated to apartment 4R in the subject building.

      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 

      In Order Number ZTA012319, the Rent Administrator adjusted the initial 
      legal regulated rent by establishing a fair market rent of $406.04 
      (excluding comparability) effective July 15, 1981.

      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 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; and that the owner should be allowed to 
      supplement its petition to submit comparability.

      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.  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 
      owner's failure to allow a three year lease option to the tenant when he 
      took occupancy of the subject apartment in July 1981 and failed to 
      assess interest.  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 three year vacancy 
      lease option. 

      In response to the tenant's petition, the owner stated in substance that 
      the tenant's original complaint did not raise the issue of lease option 
      and that a similar argument by the tenant was rejected by the 
      Commissioner in orders DK410109RO and DJ410206RT issued on November 12, 
      1992 for the tenant's current apartment (4R).
      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 

          DK410168RO, DK410381RT

      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.

      The record in this case indicates that the owner was served with the 
      tenant's application and the FMRA package on May 4, 1984, September 18, 
      1984, 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 the 20 day period.

      Moreover, the owner has failed 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.

      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 3 year option for his vacancy lease but coerced him to 
      execute a one year vacancy lease, the Commissioner notes that issue was 
      not part of the original application filed on February 15, 1984 which 
      was served on the owner and cannot properly be considered for the first 

          DK410168RO, DK410381RT

      time on appeal.

      Section 2527.10 of the RSC 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 

      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 application 
      filed on February 15, 1984 and therefore the Rent Administrator was not 
      obligated to consider the ancillary complaint.

      Moreover, Section 48 of Chapter 403, Laws of 1983 amended the Rent 
      Stabilization Law to allow the tenant the option of the lease term (one 
      or two years) in vacancy leases as well as in renewal leases.  This 
      change was effective for leases commencing on or after October 1, 1983 
      and therefore the owner was not obliged to offer the tenant the option 
      of a three year vacancy lease term in July, 1981.

      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 
      assessment of interest, the Commissioner rejects the tenant's contention 
      because Section 2526.1(a) of the Rent Stabilization Code which provides 
      for the imposition of interest, specifically excludes fair market rent 
      appeals, as well as overcharges collected prior to April 1, 1984.

      Accordingly, the Rent Administrator's order was warranted.

      Because this determination concerns lawful rents only through           
      December 31, 1983, the owner is directed to reflect the findings and 
      determinations made in this order on all future registration statements, 
      including those for the current year if not already filed, citing this 
      order as the basis for the change.  Registration statements already on 
      file, however, should not be amended to reflect the findings and 
      determinations made in this order.  The owner is further directed to 
      adjust subsequent rents to an amount no greater than that determined by 
      this order plus any lawful increases.

      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 
      herein may seek to entrance this order by filing an appropriate action 
      in a court of competent jurisdiction.

      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.

      A copy of this order is being served on the current occupant of the 

          DK410168RO, DK410381RT

      subject apartment.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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