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

          APPEAL OF                              DOCKET NO.DH410387RT
               QUINN AND MAGRADEY             :  DRO DOCKET NO.ZL3115712RT
                                PETITIONER    : 

               On August 29, 1989, the above-named petitioner-tenants filed a 
          Petition for Administrative Review against an order issued on July 
          26, 1989, by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as 17 
          West 71st Street, New York, New York, Apartment No. 9A, wherein the 
          Rent Administrator denied the tenants' fair market rent adjustment 
          application on the basis that the initial rent charged the tenants 
          did not exceed the fair market rent calculated pursuant to the 
          special fair market rent guideline promulgated by the New York City 
          Rent Guidelines Board for use in calculating fair market rent 
               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 Appeal is being determined pursuant to the 
          provisions of Section 26-513 of the Rent Stabilization Code.

               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 appeal.  

               This proceeding was commenced by the tenants' filing of a fair 
          market rent adjustment application and a rent overcharge complaint 
          in March, 1984.   The tenants stated in substance that they moved to 
          the subject apartment on February 15, 1977 at a rental of $625.00 
          per month and that they were the first rent stabilized tenants to 
          occupy the subject apartment.

               The owner submitted a rental history from the time the tenants 
          herein rented the subject apartment.  An examination of rent records 


          for the subject apartment discloses that the subject apartment had 
          been rent controlled immediately prior to occupancy by the tenants 

               In Order Number ZL3115712RT, the Rent Administrator determined 
          that the 1976 maximum base rent of the subject apartment was $545.95 
          and pursuant to Special Guidelines Order No. 8, must be adjusted by 
          an additional increase of 15% making a fair market rent of $628.99.  
          Since this amount exceeded the first negotiated rent of $625.00 
          charged the tenants herein, the tenants' fair market rent appeal was 
          dismissed by the Rent Administrator.

               In this petition, the tenants allege in substance that the 
          prior tenant (they mention the last rent controlled tenant by name)  
          was paying a rent of less than $300.00 per month in 1976 so that 
          they do not understand why their rent was increased to over 110% of 
          such prior rent.

               The Commissioner is of the opinion that this petition should be 

               The Rent Administrator correctly determined the fair market 
          rent on the basis of the 1976 maximum base rent of $546.95 increased 
          by 15% for a total of $628.99.  Since this amount exceeds the 
          initial rent of $625.00 charged the tenants, the tenants' fair 
          market rent appeal was correctly dismissed.   Contrary to the 
          tenants' contention on appeal, the fact that the rent controlled 
          tenant was actually paying a rent of less than $300.00 is not 
          relevant to the determination of the fair market rent herein since 
          the maximum base rent of $546.95 was greater than the rent the 
          controlled tenant was actually paying and the maximum base rent is 
          the figure that must be used in the calculation of the fair market 
          rent pursuant to Special Guideline No. 8.  The maximum base rent is 
          determined on the basis of two year rent cycles and generally 
          represents the highest rent amount a rent controlled tenant could be 
          charged during such two year cycle but does not represent the actual 
          amount of rent a rent controlled tenant is paying which is generally 
          lower than the maximum base rent rate.  Accordingly, the Rent 
          Administrator's order was warranted


               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.


                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner



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