DG410157RO
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. DG410157RO
Jules Metroka, : DISTRICT RENT OFFICE
DOCKET NO. L3118264-R/T
TENANT: Judy and Richard
Shapiro
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On July 31, 1989, the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on July 10, 1989 by the
Rent Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the housing accommodations known as 12 West 76th Street,
New York, New York, Apartment No. 2R, 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.
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 issue herein is whether the Rent Administrator's order was
warranted.
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 appeal.
This proceeding was commenced by the tenant's filing of a fair market
rent adjustment application on March 29, 1984.
On December 12, 1984 the owner was informed that a fair market rent
appeal had been filed, and was instructed to provide proof of service of
a Notice of Initial Legal Regulated Rent (DC-2 notice) or Apartment
Registration (Form RR-1) on the tenant.
On August 15, 1985 the owner was sent a copy of the tenant's
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application, and was again requested to submit proof of service of a DC-
2 notice or RR-1 form on the tenant. This notice to the owner afforded
the owner an opportunity to submit comparability data and included a
detailed enumeration of the requisite documents for comparability
purposes. In a response received by the DHCR on September 11, 1985, the
owner asserted that the rent was reasonably calculated based on rents
for similar apartments in the building and neighborhood and that he had
always treated the tenants fairly. In support of his allegations, the
owner submitted copies of the Report of Statutory Decontrol. (Form R-
42), for the subject apartment, a rental history and leases for the
subject apartment. The owner stated that he was including a list of
decontrolled rental amounts for a comparable apartments but the record
contains no such listing.
On May 31, 1989 the owner was sent a Final Notice of Pending Default,
including a final request for the required documentation.
By submission received by the DHCR on June 20, 1989, the owner
reiterated that no overcharge had occurred and that since the Notice of
Decontrol (R-42) was served on the first stabilized tenant, the
complainant herein was not entitled to file a fair market rent appeal.
The owner claimed that the tenant's rent was modest compared to rents
for comparable apartments in the building and area and submitted leases
for 3 other apartments in the subject line and one apartment in another
line in the subject building.
Under Docket Number L3118264-R/T, the Rent Administrator adjusted the
initial legal regulated rent by establishing a fair market rent of
$349.87 effective July 1, 1979, the commencement date of the initial
rent stabilized lease. The Rent Administrator also directed that the
owner refund excess rent of $9,553.18 to the tenant. The Administrator
determined that the owner's comparability data was inadequate and
determined the fair market rent based on the special guideline alone.
In this petition, the owner alleges that since the first stabilized
tenant was personally served with a "DC-2 Decontrol Notice", it was
error to allow the complainants herein to file a fair market rent
appeal; that the order appealed from should have stated the reason the
comparables were unacceptable; and that the Administrator should not
have gone back more than four years in its computation of the
overcharges.
In response to the owner's petition, the tenant alleged that the order
contained a calculation error; that the owner had submitted no evidence
of service of the "DC-2 Decontrol Notice", that the claimants have met
the statutory criteria for processing a fair market rent appeal; that
despite the owner's assertion to the contrary, the DHCR was under no
duty to request any necessary additional information; and the owner may
not present additional data on appeal. The tenant further assert that
the excess rents based on a fair market rent appeal may be calculated,
pursuant to Section 2526.1 of the Rent Stabilization Code, on a period
more than four years prior to the date of the complaint. The tenant
further stated that treble damages should be awarded. The owner did not
respond.
The Commissioner is of the opinion that this petition should be denied.
In the case under consideration, the owner (and his attorney) repeatedly
DG410157RO
refer to the Notice of Decontrol, alleging that service of this form on
the first stabilized tenant bars the second stabilized tenant from
filing a fair market rent appeal. The Commissioner finds that since the
owner failed to supply the requisite documentation of proof of service
of either the Initial Apartment Registration or the Notice of Initial
Legal Registered Rent on the first stabilized tenant, the second
stabilized tenant may properly file a Fair Market Rent Appeal.
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 apartments 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.
Concerning the owner's contention that the order appealed from should
have stated the reason the comparables were unacceptable: the record
evidences that the Administrator notified the owner of the requisite
documents for comparability purposes. Nevertheless, the owner failed to
provide data for complete lines of apartments beginning with the subject
line, including dates of decontrol, and failed to provide proof of
service of DC-2 or RR-1 notices. Therefore, the Administrator properly
determined the fair market rent based solely on the special fair market
rent guideline.
With regard to the owner's contention that it should be required to
submit only rental data dating back four years at most, it is noted that
Section 26-513 of the Rent Stabilization Law, which deals with fair
market rent appeals, continues to provide for determination of the fair
market rent from the date of the initial stabilized tenancy.
Additionally, the owner was not required to submit comparability data
more than four years old, but had the option to do so.
With regard to the tenant's assertion that the Administrator's order
contained a calculation error and that the tenant should be awarded
treble damages, the tenant failed to file a petition for administrative
review and may not raise such issues in response to the owner's
petition. However, the Commissioner notes that Section 2526.1 of the
DG410157RO
current Rent Stabilization Code, which provides for the imposition of
treble damages, does not apply to fair market rent appeals.
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.
The owner is directed to roll back the rent to the lawful stabilized
rent consistent with this determination and to refund or fully credit
against future rents over a period not exceeding six months from the
date of receipt of this order, the excess rent collected by the owner.
In the event the owner does not take appropriate action to comply within
sixty (60) days from the date of issuance of this order, the tenant may
credit the excess rent collected by the owner against the next month(s)
rent until fully offset.
THEREFORE, in accordance with the provisions of the Rent Stabilization
Law and Code, it is
ORDERED, that this petition for administrative review be, and the same
hereby is, denied, and, that the order of the Rent Administrator be, and
the same hereby is, affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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