STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: DL 410018-RO &
: DL 410005-RT
DRO DOCKET NO.: CG 410045-RP,
CLARENDON MANAGEMENT CORP. AND AG 110669-R
KERMIT S. IMBREY, PETITIONERS :
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ORDER AND OPINION GRANTING THE TENANT'S PETITION FOR ADMINISTRATIVE
IN PART, GRANTING THE OWNER'S PETITION FOR ADMINISTRATIVE REVIEW
AND REMANDING THE PROCEEDING TO THE DISTRICT RENT ADMINISTRATOR
The above-named petitioner-owner and petitioner-tenant filed Petitions for
Administrative Review of an order issued on November 3, 1989 by the
District Rent Administrator, Gertz Plaza, Jamaica, New York, concerning
housing accommodations known as Apartment 14B at 425 West 23rd Street, New
York, New York, wherein the District Rent Administrator determined the
fair market rent pursuant to a comparability study and the special fair
market rent guideline promulgated by the New York City Rent Guidelines
Board for use in calculating fair market rent appeals.
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the record relevant to the issues
raised by the administrative appeal.
This proceeding was originally commenced on July 21, 1986 by the filing of
a fair market rent appeal by the tenant on both a tenant's objection form
and an overcharge complaint form. The tenant took occupancy pursuant to a
lease commencing April 9, 1986 and expiring April 30, 1988 at a monthly
rent of $1275.00.
By letter dated October 31, 1986, both the tenant and his representative
advised that the parties had reached a settlement and that the tenant
wished to withdraw his fair market rent appeal.
By order issued February 6, 1987, the Administrator terminated the
proceeding based on the tenant's withdrawal of the fair market rent
appeal.
The tenant thereafter filed a petition for administrative review (Docket
Number BC 410014-RT) wherein the tenant requested reopening of the
proceeding , asserting that he was not properly advised of his rights and
was not represented by legal counsel and that after the settlement was
reached, he learned about a pending case for a similar apartment (14B at
445 W. 23rd St.) of which the owner did not advise the tenant and which
resulted in a reduced rent.
DOCKET NUMBER: DL 410018-RO AND DL 410005-RT
By order issued on July 8, 1988 the Commissioner granted the tenant's
petition, citing the fact that the settlement agreement was not so ordered
by a court of competent jurisdiction, and remanded the proceeding to the
Administrator for processing of the tenant's fair market rent appeal on
the merits.
By notice dated September 7, 1988, the Administrator reopened the
proceeding. The notice included a fair market rent appeal package and
afforded both parties an opportunity to submit any relevant evidence.
In answer the tenant cited as comparable apartments apartment 14B at 445
West 23rd Street at an adjusted rent of approximately $590.00 and
apartment 14A at 425 West 23rd Street at a rent of $444.93. The owner
cited and submitted documentation for apartments 16B at 425 West 23rd
Street, apartment 10B at 435 West 23rd Street, apartments 6E and 17E at
450 West 24th Street, and apartments 15B, 11E and 17E at 460 West 24th
Street.
By notice to the parties dated October 4, 1989, the owner was advised
that the owner was required to submit a complete rental history for all
apartments in the subject line.
By submission dated October 19, 1989, the owner stated that it was
submitting the required rental histories for all currently stabilized
apartments in the subject line. The owner submitted a rental history form
for apartment 2B indicating an adjustment rent of $596.58 effective May 1,
1982 and rental history forms for apartments 4B, 5B, 7B and 9B indicating
that those apartments were not rented to a first stabilized tenant within
a period 4 years before to 1 year after the renting of the subject
apartment to the applicant. The owner also resubmitted the documentation
for apartment 16B at 425 West 23rd Street and apartment 15B at 460 West
24th Street. The owner also submitted a floor plan for all apartments and
asserted that the A line apartments are not comparable to the B line
apartments and that apartment 14A at 425 West 23rd Street was vacancy
decontrolled in 1973.
In the order under appeal herein, the District Rent Administrator adjusted
the initial legal regulated rent by establishing a fair market rent of
$892.42 effective April 9, 1986, the commencement date of the initial rent
stabilized lease, and directed a refund of excess rent in the amount of
$9,564.00 to the tenant. The Administrator utilized comparability data
stated by the Administrator to have been submitted by the owner in the
comparability study, but did not utilize comparability data submitted by
the tenant.
In his petition, the tenant asserts that he never received a Summary
Notice and did not know what figures were to be used and was therefore
unable to challenge the owner's submission. The tenant also requests that
the owner be directed to submit rent ledgers and leases for all comparable
apartments. The tenant asserts that the buildings at 450 West 24th Street
and 460 West 24th Street are similar but not comparable to the subject
building because they face in the opposite direction and that the other
apartments listed (the E and G lines at 425 West 23rd Street and the E
line at 435 W. 23rd Steet) are not comparable to the subject apartment,
DOCKET NUMBER: DL 410018-RO AND DL 410005-RT
but that the B line apartments on West 23rd Street are comparable to the
subject apartment. The tenant asserts that apartment 14B at 445 West 23rd
Street, which was cited by the tenant and which was first rented to a
stabilized tenant pursuant to a lease commencing July 1, 1983 and had an
adjusted rent of $590.32 as of June 4, 1985, should have been used in the
comparability study. The tenant also asserts that the rent cited by the
owner for apartment 15B at 425 West 23rd Street is not correct that the
1974 Maximum Rent for the subject apartment indicated on the DC-2 form
which the owner sent to the tenant was $217.67, that the apartment
registration sent to the tenant indicated a rent control rent on April 1,
1984 of $402.64, and that it is evident from this information that the
tenant's initial rent exceeded the fair market rent. The tenant also
asserts that the settlement should be taken into account because the rent
established by the Administrator ($892.42) improperly exceeds the rent
actually paid by the tenant pursuant to the settlement ($775.00 effective
November 1, 1986).
In its petition, the owner asserts that the owner has continued to charge
the tenant rent consistent with the settlement agreement which was
abrograted by the tenant, that the rent charged is substantially less than
the lawful rent established by the Administrator, and that as a result of
the Administrator's order, the tenant owes the owner substantial
retroactive arrears. The owner requests that the Administrator's order be
modified to order repayment of any resulting arrears owed by the tenant to
the owner within a reasonable time period.
In answer to the owner's petition, the tenant asserts, among other things,
that modifying the Administrator's order as requested by the owner would
cause the tenant undue hardship as it calls for more rent than the tenant
has been paying.
In reply to the tenant's answer, the owner asserts that it was not
required to submit as a comparable apartment 14B at 445 West 23rd Street,
but that the owner met its obligations by duly submitting comparable
apartments within the subject building, including the subject line, and
the required supporting documentation. The owner further asserts that
exposure is not a criterion to be used in determining comparability, that
the E line is the mirror image of the B line and that the A line
apartments are not comparable to the subject line. The owner asserts that
the alleged misrepresentation cited by the tenant in fact resulted from
administrative errors by the DHCR in the instant order. The owner
requests that the DHCR declare that the settlement agreement is invalid
and unenforceable, that the parties are bound by the DHCR's order, and
reaffirm the owner's right to retroactively collect the higher rent
consistent with that order.
By subsequent correspondence dated April 25, 1990 the tenant asserts that
the owner was required to include all comparable apartments in the subject
line for the comparability period (April 1, 1982 to March 31, 1987). The
tenant requests that only the B line apartments be used and lists a number
of B line apartments in the subject building (apt 2B) and in other
buildings. By correspondence dated August 4, 1990, the tenant states,
among other things, that she settled the case in reliance on the owner's
statement that the rent set was lower than that for any other B apartment
and that he sought to reopen the case after learning of the lower adjusted
DOCKET NUMBER: DL 410018-RO AND DL 410005-RT
rent for apartment 14B at 445 West 23rd Street. By correspondence dated
July 8, 1991, the tenant reiterated the arguments previously raised. By
correspondence dated July 25, 1991, the tenant asserted that the rent of
the comparable apartments might be subject to challenge.
The Commissioner is of the opinion that the tenant's petition should be
granted in part and the owner's petition should be granted.
Pursuant to Sections 2522.3(e) and (f) the Rent Stabilization Code
effective May 1, 1987, for fair market rent appeals filed after April 1,
1984, comparability will be determined based on the following:
(e)...(1) Legal regulated rents, for which the time to file a
Fair Market Rent Appeal has expired and no Fair
Market Rent Appeal is then pending, or the Fair
Market Rent Appeal has been finally determined,
charged pursuant to a lease commencing within a 4
year period prior to, or a 1 year period
subsequent to, the commencement date of initial
lease for the housing accommodation involved; and
(2) At the owner's option, market rents in effect for
other comparable housing accommodations on the date
the initial lease for the housing accommodation
involved as submitted by the owner.
(f) Where the rents of the comparable housing accommodations
being considered are legal regulated rents, for which
the time to file a Fair Market Rent Appeal has
expired, and such rents are charged pursuant to a
lease ending more than 1 year prior to the
commencement date of the initial lease for the
subject housing accommodation, such rents shall be
updated by renewal leases, commencing with the
expiration of the initial lease for the comparable
housing accommodation to a date within 12 months
prior to the renting of the housing accommodation
involved.
Regarding the tenant's assertion that the Administrator utilized
incorrect rents for comparable apartments, a review of the record
indicates that the Administrator's order erroneously listed as comparable
apartments a number of apartments either not cited by the owner or at
rents not cited by the owner. It appears that the same apartments were
erroneously listed by the Administrator at the wrong address or at more
than one address at the wrong rent. The comparable apartments cited by
the owner for which the owner has provided adequate documentation are as
follows:
425 W. 23rd St. 2B 5/1/82 $596.58
425 W. 23rd St. 16B 8/17/84 $1200.00
435 W. 23rd St. 10B 3/12/86 $1250.00
450 W. 24th St. 6E 1/15/87 $1225.00
450 W. 24th St. 17E 8/1/86 $1300.00
460 W. 24th St. 15B 11/1/86 $1300.00
DOCKET NUMBER: DL 410018-RO AND DL 410005-RT
460 W. 24th St. 11E 8/15/85 $1200.00
460 W. 24th St. 17E 8/15/82 $975.00
The owner is required to submit data for complete lines of apartments
beginning with the subject line. The owner submitted rental history data
for the entire subject line of apartments, but did not submit complete
data for the other lines of apartments included in its comparability
submission. The Commissioner finds that, inasmuch as the Administrator's
notice of October 4, 1989 advised the owner to submit complete rental
history data only for the subject line, which the owner promptly
submitted, the proceeding should be remanded to the Administrator to
afford the owner an opportunity to submit complete rental history data for
the other lines of apartments included in the owner's comparability
submission. Any submission of comparability data made by the owner should
be forwarded to the tenant for comment. If the owner fails to submit the
rent history data for the other lines, then, of the owner's comparability
submission, only the apartments in the subject line (apts. 2B and 16B)
will be usable in the comparability study.
Regarding the tenant's assertion that the owner should be directed to
submit leases or rent ledgers for all comparable apartments, the owner is
required to document the initial stabilized rent and to document that the
initial rent is not subject to challenge by submitting either a DC-2
Notice or apartment registration form with proof of service on the tenant
or by indicating that the initial rent had been challenged. Additional
documentation in the form of leases or rent ledgers is not required. The
owner submitted the required documentation for the comparable apartments
listed above, including DC-2 notices or apartment registration forms with
proof of service, as well as Landlord's Reports of Statutory Decontrol.
In addition, the owner submitted a copy of a DHCR order for apartment 16B
at 425 W. 23rd Street affirming the initial rent of $1200.00 and indicated
that a CAB order had established an initial rent of $596.58 for apartment
2B at 425 W. 23rd Street. Therefore no further documentation is required
for those apartments.The Commissioner rejects the tenant's assertion that
the building at 450 West 24th Street and 460 West 24th Street are not
comparable to the subject building because they face in the opposite
direction and finds that the floor plans submitted by the owner indicate
that the E line apartments are comparable to the subject line. (It is
noted that the listing by the Administrator of a G line apartment at 425
West 23rd Street was an error.)
The Commissioner finds that the Administrator failed to consider apartment
14B at 445 West 23rd Street which was cited by the tenant. On remand, the
adjusted rent for that apartment should be considered by the Administrator
in the comparability study. Regarding the B line apartments in other
buildings cited by the tenant in his April 25, 1990 submission, the tenant
failed to cite those apartments during the proceeding before the
Administrator and may not do so for the first time on administrative
appeal.
It is noted that the major capital improvement increase under Docket
Number AI 430095-OM cited by the owner has an effective date of November
1, 1986 for rent stabilized tenants rather than November 1, 1988 as
stated by the Administrator.
DOCKET NUMBER: DL 410018-RO AND DL 410005-RT
It is further noted that DHCR records indicate that the 1984 Maximum Base
Rent (MBR) for the subject apartment was $404.9. This is calculated as
follows:
$326.27 1980 MBR
X 1.11
$362.16 1982 MBR
X 1.075
$389.32 1984 MBR
+ $6.81 Labor Cost Adjustment 10/6/81 2AOM30836
+ $2.00 Elevator Modernization 5/28/82 2A C415542
+ $6.79 Labor Cost adjustment 7/18/83 2AOM39963
$404.92 Adjusted 1984 MBR
On remand the 1984 MBR of $404.92 should be utilized in calculating the
fair market rent. This figure does not include the fuel cost adjustment
of $13.82.
The record in this case indicates that after the proceeding was terminated
by the Administrator based on the tenant's withdrawal, the tenant sought
to negate the settlement and requested reopening of the proceeding and
processing of the case on the merits, which was granted by the
Administrator. The tenant cannot now, after the determination of the fair
market rent by the Administrator, seek to nullify that determination and
reinstitute the settlement. The owner should not be penalized for
charging the tenant rent consistent with the settlement agreement which
was abrogated by the tenant, particularly in a fair market rent appeal
case where the fair market rent could not readily be determined by the
owner prior to the issuance of the Administrator's order. On remand the
fair market rent should be established based on the statutory criteria,
and should not be limited to the rent actually paid pursuant to the
abrogated settlement agreement. If the fair market rent established by
the Administrator exceeds the rent paid pursuant to the settlement
agreement, the owner will be entitled to retroactively collect the rent
consistent with the Administrator's order and the tenant should be
afforded a reasonable period of time within which to repay any arrears.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
DOCKET NUMBER: DL 410018-RO AND DL 410005-RT
ORDERED, that the tenant's petition be and the same hereby is granted in
part, the owner's petition be and the same hereby is granted and the
proceeding be and the same hereby is remanded to the Rent Administrator
for further processing in accordance with this order and opinion. The
refund of arrears owed by either party as a result of Rent Administrator's
order is hereby stayed until a new order is issued upon remand. However,
the Administrator's determination as to the rent is not stayed and shall
remain in effect, except for any adjustments pursuant to lease renewals,
until the Administrator issues a new Order upon remand.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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