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

      APPEALS OF                             DOCKET NO. DD110296RO  
             Rental Management Associates
                                          :  DISTRICT RENT OFFICE
                                             DOCKET NO. 54647      
                                             TENANT: Edward Smith            
                            PETITIONER    : 


      On April 19, 1989, the above-named owner filed a Petition for 
      Administrative Review against an order issued on March 20, 1989, by a 
      Rent Administrator, concerning the housing accommodations known as 
      Apartment 104 at 41-11 Parsons Boulevard, Flushing, New York, wherein 
      the Administrator ordered the owner to refund to the tenant $7,668.09, 
      representing the excess rent collected by the owner over the legal 
      regulated rent as established in the order.

      The record reflects: that the tenant's initial lease was from January 1, 
      1981 through December 31, 1982; that the tenant filed his complaint on 
      January 31, 1985; that the rent was not raised until the second lease 
      took effect on September 1, 1986; and that the owner received notice of 
      the complaint in 1987.

      The Administrator's order, which determined the fair market rent of the 
      subject apartment, found that excess rent had been paid under the 1981 
      lease and found the same monthly excess rent payment during the time 
      that there was no lease, i.e., it allowed for no increase in the lawful 
      rent during the latter period, stating in explanation that "[n]o rent 
      increase [was] taken by [the] . . . owner."  It is that refusal to grant 
      an increase in the lawful rent, during that month-to-month tenancy, that 
      forms the subject of the present appeal.

      Citing section 2522.7, "Consideration of Equities," of the Rent 
      Stabilization Code, petitioner argues that such consideration (aimed 
      inter alia at "preserving the regulated rental housing stock") demands 
      the allowance of a rental increase under the appropriate order of the 
      Rent Guidelines Board, for the month-to-month tenancy immediately 
      following the expiration of the first lease.  An aggravating factor, the 
      argument continues, is that if this Division had "made a determination 
      ... in this case shortly after the complaint was filed, instead of years 
      later, the owner would have had an opportunity to enter into a renewal 
      lease with the tenant at the applicable [G]uidelines [Board] increase 
      over the initial rent established by DHCR."
      The Commissioner is of the opinion that this petition should be denied.


      The Administrator followed established law and policy in freezing the 
      lawful rent for the period not covered by a written lease, and he was 
      well within his discretion in declining to invoke the aforementioned 
      section 2522.7 to avoid such a freeze.  The Rent Stabilization Code 
      mentions regular "guidelines" increases solely in the context of new and 
      renewal leases, and the Commissioner's policy of "deeming" a lease to 
      have been executed applies only to situations where the rent was changed 
      (indicating notice to the tenant of a new arrangement) after a lease 
      expired.  Further, the length of time taken by the Rent Administrator to 
      decide this proceeding did not preclude the owner from offering a 
      renewal lease when the initial lease was due to expire, as required by 
      the Rent Stabilization Law and Code.  The DHCR is not responsible for an 
      individual owner's ignorance of or negligence as to its obligation to 
      offer a renewal lease to a rent-stabilized tenant.  In sum, since the 
      equities do not demand the allowance of a guidelines increase for the 
      intervening month-to-month tenancy herein, the Administrator did not err 
      in refusing to include such an increase in his calculations, and as that 
      refusal is the only error assigned in this appeal, the subject order 
      will not be disturbed.

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

      ORDERED, that this petition be, and the same hereby is, denied, and that 
      the Rent Administrator's order be, and the same hereby is, affirmed.


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner


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