Docket No. EB110349RO



                                    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



          ------------------------------------X   S.J.R. No. 7023
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW
          APPEALS OF                              DOCKET NOS. EB110349RO and
                                                              FG120179RO

          133-24 SANFORD AVENUE                   DISTRICT RENT             
          REALTY CORPORATION,                     ADMINISTRATOR'S DOCKET
                                                  NOS. CB110389R and         
                                                       FB120039RK  
           
                                   PETITIONER
          ------------------------------------X


           ORDER AND OPINION TERMINATING PROCEEDING FILED UNDER DOCKET NO. 
          EB110349RO, AND GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART 
          FILED UNDER DOCKET NO. FG120179RO



              On February 1, 1990, the above-named landlord filed a petition 
          for administrative review, under Docket No. EB110349RO, of an order 
          issued on December 28, 1989 by the Rent Administrator concerning 
          the housing accommodation known as Apartment 6K, 133-24 Sanford 
          Avenue, Flushing, New York.  Furthermore, on July 10, 1991, the 
          above-named landlord filed a petition for administrative review, 
          under Docket No. FG120179RO, of an order issued on June 21, 1991 by 
          the Rent Administrator concerning the above-mentioned housing 
          accommodation.

              Subsequently, and after more than ninety days had elapsed from 
          the time it filed its petition for administrative review, under 
          Docket No. EB110349RO, the landlord deemed the above-mentioned 
          petition as having been denied, and sought judicial review in the 
          Supreme Court of the State of New York pursuant to Article 78 of 
          the Civil Practice Law and Rules.

              After considering the Article 78 petition, the Court issued an 
          order remitting the petition, filed under Docket No. EB110349RO, to 
          the Division of Housing and Community Renewal (D.H.C.R.) for 
          further consideration.













          Docket No. EB110349RO

              Since the petitions involve common questions of law and fact, 
          the Commissioner deems it appropriate to consolidate the 
          proceedings for disposition herein.

              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 appeals.

              This proceeding was commenced by the subject tenant filing an 
          overcharge complaint, dated December 18, 1987, filed under Docket 
          No. CB110389R.

              The subject tenant filed another overcharge complaint, dated 
          November 27, 1988, filed under Docket No. CK120487R.

              In the Administrator's order under review herein, under Docket 
          No. CB110389R, the Administrator determined that the subject 
          apartment's maximum rent was $329.47 per month effective February 
          26, 1982 through the issuance date of the above-mentioned order.

              In its petition filed under Docket No. EB110349RO, the subject 
          landlord asserts, among other things, that the above-mentioned 
          Administrator's order, in establishing the maximum rent, did not 
          take into account the fact that the United States Department of 
          Housing and Urban Development (H.U.D.) had issued a pre-emption 
          order, dated September 27, 1985, which asserted exclusive 
          jurisdiction over the establishment of the subject building's legal 
          regulated rents and maximum rents; that D.H.C.R.'s jurisdiction 
          over the regulation of the subject building's rents was pre-empted 
          by the above-mentioned order issued by H.U.D.; that on November 8, 
          1985 H.U.D. approved increasing the subject apartment's maximum 
          rent to $458.21 per month; that, as the landlord states:  "The 
          increased rents were required to meet the increased costs of 
          utilities and operating expenses at the subject building"; that 
          subsequent rent increases "must be based on the initial legal rent 
          established in 1985 by the HUD order"; and that, as the landlord 
          further states, "the agency in the instant proceeding must adhere 
          to the HUD exemption."

              Subsequently, on August 8, 1990, the Administrator issued an 
          order, under Docket No. CK120487R, in which it had been determined 
          that the subject apartment's maximum rent should be $458.21 per 
          month effective November 1, 1985 through the issuance date of the 
          above-mentioned order.  In the above-mentioned order the 
          Administrator noted that H.U.D. established the subject apartment's 
          maximum rent to meet the cost of operating the subject building.

              On March 12, 1991, the Administrator reopened the 
          Administrator's order that was issued under Docket No. CK120487R 
          based upon an irregularity in a vital matter.

              In the Administrator's order under review herein, issued under 






          Docket No. EB110349RO

          Docket No. FB120039RK, the Administrator modified the order issued 
          under Docket No. CK120487R as follows: the subject apartment's 
          maximum rent effective January 1, 1988 should be $492.88 per month; 
          the subject apartment's maximum rent effective January 1, 1989 
          should be $512.73 per month, and the subject apartment's maximum 
          rent effective January 1, 1990 should be $551.18 per month.

              After careful consideration, the Commissioner is of the opinion 
          that the landlord's petition, filed under Docket No. EB110349RO, 
          should be terminated.

              As the relief sought by the landlord in its petition filed 
          under Docket No. EB110349RO, which is the establishment of the 
          maximum rent based upon the aforementioned pre-emption order issued 
          by H.U.D., has already been provided by the subsequent orders of 
          the Administrator, the Commissioner is of the opinion that the 
          landlord's petition filed under Docket No. EB110349RO should be 
          terminated as moot.

              In its petition filed under Docket No. FG120179RO, the subject 
          landlord asserts, among other things, that the pre-emption order 
          issued by H.U.D. became effective November 1, 1985; that the 
          subject apartment's maximum rent which was approved by H.U.D. was 
          $458.21 per month effective November 1, 1985; that the pre-emption 
          order issued by H.U.D. was in effect for one year; that an Order of 
          Eligibility was issued on February 1, 1989 granting the landlord's 
          maximum base rent (M.B.R.) for the 1988-1989 period effective 
          January 1, 1988; that the above-mentioned order established the 
          1988-1989 M.B.R. by increasing the 1986-1987 M.B.R. by 16.4%; that, 
          as the landlord asserts, the subject apartment's 1988-1989 M.B.R. 
          should have been $533.36 per month (1986-1987 M.B.R. of $458.21 per 
          month X 16.4%); that the subject apartment's maximum rent effective 
          January 1, 1988 should have been $492.88 per month (subject 
          apartment's maximum rent on December 31, 1987 which was $458.21 X 
          7.5%); that the subject apartment's maximum rent effective January 
          1, 1989 should have been $529.98 per month, and not $512.73 per 
          month as listed in the Administrator's order under review herein; 
          that an Order of Eligibility was issued on August 15, 1990 granting 
          the landlord's M.B.R. for the 1990-1991 period effective January 1, 
          1990; that the above-mentioned order established the 1990-1991 
          M.B.R. by increasing the 1988-1989 M.B.R. by 8%; that the subject 
          apartment's 1990-1991 M.B.R. should have been $576.03 per month, 
          and that the subject apartment's maximum rent effective January 1, 
          1990 should have been increased to $566.73 per month, and not 
          $551.18 per month as listed in the Administrator's order under 
          review herein.
              To its petition the landlord attaches, among other things, a 
          copy of the aforementioned Order of Eligibility issued on February 
          1, 1989, under Docket No. BL126471BR, granting the landlord's 
          M.B.R. for the 1988-1989 period effective January 1, 1988, and a 
          copy of the aforementioned Order of Eligibility issued on August 
          15, 1990, under Docket No. DL120783BR, granting the landlord's 












          Docket No. EB110349RO

          M.B.R. for the 1990-1991 period effective January 1, 1990.

              In his answer the subject tenant asserts, among other things, 
          that the subject landlord provided H.U.D. with a rental amount that 
          was more than the legal maximum rent for the subject apartment, and 
          that H.U.D does not verify whether the maximum rent submitted by 
          the landlord was accurate.

              To his answer the subject tenant attaches, among other things, 
          a copy of a letter from H.U.D., dated August 2, 1988, which states, 
          among other things, that:

               Local HUD policy (New York, NY office) limits annual rent 
               increases to individual tenants of properties for which 
               HUD has pre-empted state rent regulations to 20%.  The 
               owner of this property reported to this office at the 
               time HUD pre-empted such regulations for this property 
               that your apartment would receive an increase (20%) 
               within these limits.  However, there appears to be a 
               dispute concerning the base amount which was raised by 
               the 20%.  That base amount should have been the New York 
               State Division of Housing and Community Renewal 
               (NYSDHCR)-designated maximum permissible rent for your 
               apartment at the time that the HUD pre-emption action 
               went into effect.  NYSDHCR is responsible for enforcing 
               this rent which it has designated, and you should contact 
               them in this regard.

              After careful consideration, the Commissioner is of the opinion 
          that the landlord's petition filed under Docket No. FG120179RO 
          should be granted in part.

              The Commissioner notes that on June 14, 1991 the Administrator 
          amended the order issued under Docket No. BL126471BR, which 
          modified the calculation of the subject building's 1988-1989 M.B.R.  
          Based on the above-mentioned amended order, the Commissioner finds 
          that the 1988-1989 M.B.R. for subject apartment should be $526.73 
          per month effective January 1, 1988.

              The record reflects that the landlord did not file a challenge 
          of the above-mentioned amended order issued on June 14, 1991.  
          Accordingly, the Commissioner finds that the amended order issued 
          on June 14, 1991, under Docket No. BL126471BR, is a final 
          determination of the rent agency.
              Based upon the pre-emption order issued by H.U.D., the 
          Commissioner finds that the subject apartment's maximum rent in 
          effect on December 31, 1987 was $458.21 per month.  Pursuant to the 
          Administrator's order granting the landlord's M.B.R. for the 1988- 
          1989 period, the Commissioner notes that the subject apartment's 
          maximum rent effective January 1, 1988 is to be calculated by 
          increasing the maximum rent in effect on December 31, 1987 
          ($458.21) by 7.5%.  Accordingly, the Commissioner finds that 






          Docket No. EB110349RO

          subject apartment's maximum rent effective on January 1, 1988 
          should be $492.58 per month.

              The Commissioner points out that the Administrator's order 
          under review herein, under Docket No. FB120039RK, mistakenly listed 
          the subject apartment's maximum rent effective January 1, 1988 as 
          $492.88 per month.  The Commissioner finds that the above-mentioned 
          Administrator's order should be modified to reflect the fact that 
          the subject apartment's maximum rent effective January 1, 1988 
          should be $492.58 per month.

              Pursuant to the aforementioned Order of Eligibility, the 
          Commissioner finds that the subject apartment's maximum rent 
          effective January 1, 1989 is to be calculated by increasing the 
          1988 maximum rent ($492.58) by 7.5%, which equals $529.52.  
          However, as the apartment's maximum rent in effect on December 31, 
          1987 did not exceed the apartment's 1988-1989 M.B.R., the 
          Commissioner finds, pursuant to the aforementioned Order of 
          Eligibility, that the subject apartment's maximum rent in effect 
          during the 1988-1989 period may not exceed the apartment's 1988- 
          1989 M.B.R.

              As the subject apartment's 1988-1989 M.B.R. is $526.73 per 
          month; that the subject apartment's maximum rent effective on 
          January 1, 1989 can not exceed the above-mentioned M.B.R., the 
          Commissioner finds that the subject apartment's maximum rent 
          effective January 1, 1989 should be $526.73 per month.

              Pursuant to the Administrator's order granting the landlord's 
          M.B.R. for the 1990-1991 period, issued under Docket No. 
          DL120783BR, the Commissioner notes that the subject apartment's 
          M.B.R. for the 1990-1991 period is to be calculated by increasing 
          the apartment's 1988-1989 M.B.R. ($526.73) by 8%.

              Accordingly, the Commissioner finds that the subject 
          apartment's M.B.R. for the 1990-1991 period should be $568.87 per 
          month effective January 1, 1990.  

              Pursuant to the above-mentioned order, the Commissioner notes 
          that the subject apartment's maximum rent effective January 1, 1990 
          is to be calculated by increasing the maximum rent in effect on 
          December 31, 1989 ($526.73 per month) by 7.5%.  Accordingly, the 
          Commissioner finds that the subject apartment's maximum rent 
          effective on January 1, 1990 should be $566.23 per month.

              The Commissioner points out that the reason why there is a 
          discrepancy in the maximum rents noted in this order and opinion, 
          and the maximum rents listed in the Administrator's order issued 
          under Docket No. FB120039RK, is the fact that the Administrator 
          reduced the 1988-1989 M.B.R. by $14.00 per month.  The Commissioner 
          is of the opinion that the Administrator reduced the apartment's 
          1988-1989 M.B.R. as there were several orders issued by the rent 












          Docket No. EB110349RO

          agency which reduced the subject apartment's maximum rent by $14.00 
          per month due to a finding of a diminution of services, which were 
          in effect prior to H.U.D. establishing the subject apartment's 
          maximum rent.

              The Commissioner is of the opinion that the aforementioned 
          orders reducing the apartment's maximum rent due to a finding of a 
          diminution of services were superseded by H.U.D's pre-emption order 
          which was dated September 27, 1985.  Accordingly, the Commissioner 
          is of the opinion that the $14.00 per month reduction of the 1988- 
          1989 M.B.R. by the Administrator was not warranted.

              However, the Commissioner finds that the subject landlord is 
          required to restore services which were the basis of the prior rent 
          reduction orders issued by the rent agency, if the landlord has not 
          already done so.

              The Commissioner is of the opinion that this order and opinion 
          is issued without prejudice to the right of the subject tenant to 
          file a new complaint for a reduction in rent due to a diminution of 
          the services which were the basis of the prior rent reduction 
          orders issued by the rent agency, if the facts so warrant.

              As to the issue raised by the subject tenant that the 
          landlord's submission of the subject apartment's maximum rent to 
          H.U.D. was incorrect, the Commissioner finds that that issue is not 
          raised in the landlord's petition, and that the subject tenant did 
          not file a petition for administrative review of the 
          Administrator's order under review herein.  As the above-mentioned 
          issue has not been raised in the petition for administrative review 
          of the Administrator's order under review herein, the Commissioner 
          finds that the subject tenant is estopped from raising that issue 
          in his answer to the landlord's petition.

              THEREFORE, in accordance with the City Rent and Rehabilitation 
          Law and the Rent and Eviction Regulations, it is

              ORDERED, that the landlord's petition, filed under Docket No. 
          EB110349RO be, and the same hereby is, terminated; and it is

              FURTHER ORDERED, that the landlord's petition filed under 
          Docket No. FG120179RO be, and the same hereby is, granted in part, 
          and that the Administrator's order issued under Docket No. 
          FB120039RK be, and the same hereby is, modified in accordance with 
          this order and opinion; and it is

              FURTHER ORDERED, that the subject apartment's 1988-1989 M.B.R. 
          shall be $526.73 per month effective January 1, 1988, and that the 
          subject apartment's 1990-1991 M.B.R. effective January 1, 1990 
          shall be $568.87 per month; and it is

              FURTHER ORDERED, that the subject apartment's maximum rent 






          Docket No. EB110349RO

          shall be as follows: $492.58 per month effective January 1, 1988, 
          $526.73 per month effective January 1, 1989, and $566.23 per month 
          effective January 1, 1990; and it is

              FURTHER ORDERED, that the subject tenant may pay any 
          retroactive rent arising as a result of this order in one or more 
          lump sum payments or, at the tenant's option, in equal monthly 
          installments equal in number to the number of months  between 
          January 1, 1988 and the date of issuance of this order; and it is

              FURTHER ORDERED, that if the subject tenant vacates after the 
          issuance of this order, such retroactive rents, if any, shall be 
          due immediately.

          ISSUED:



                                                                            
                                             Joseph A. D'Agosta
                                             Deputy Commissioner






    

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