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

     ------------------------------------X  SJR N0.: 5011
     APPEAL OF                              DOCKET NO.: EA 210210-RO
                                            DRO DOCKET NO.: 052742



     On January 5, 1990 the above named petitioner-owner filed a  Petition  for
     Administrative Review against an order issued on December 5, 1989  by  the
     Rent Administrator at Gertz Plaza, Jamaica, New York,  concerning  housing
     accommodations known as Apartment number 2L (also sometimes  described  as
     2nd Floor Front) at 756 Leonard Street, Brooklyn, New  York,  wherein  the
     Administrator established the stabilized rent and directed  the  owner  to
     refund $24,912.79 including treble damages from April 1, 1984.
     Subsequently, the Petitioner filed a Petition in Supreme Court,  New  York
     County,  requesting  that  the  "deemed  denial"   of   the   Petitioner's
     administrative appeal be annulled.

     Thereafter, pursuant to a stipulation dated August 2, 1990, the matter was 
     remanded to the Division for processing on the merits.

     The Commissioner has reviewed all of the evidence in the  record  and  has
     carefully considered that portion of the evidence relevant to  the  issues
     raised in the administrative appeal.

     This proceeding was originally commenced  on  November  2,  1984,  by  the
     timely filing of an Objection to the Initial Registration Statement by the 
     tenant, Maria Raia.  In that Objection the tenant asserted that: occupancy 
     in 1963; the registered rent on April 1, 9984 was $280.00 per  month;  and
     that she was and she was being overcharged.  The tenant also alleged  that
     the Initial Registration Statement did not include heat and hot  water  as
     services provided at the subject premises.  

     The owner was first served with the Objection  on  March  13,  1989.   The
     owner submitted a rental history from September 1, 1980, but asserted that 
     it had purchased the subject building in 1985 and could not provide a copy 
     of the lease in effect on April 1, 1980.

     On the chart attached to and made a  part  of  the  order,  based  on  the
     owner's purported failure to provide a rental history to  April  1,  1980,
     the  Administrator  used  the  42A  default  procedure  to  establish  the
     stabilized rent.

     In its Petition the owner asserts that:

          DOCKET NUMBER: SJR 5011; EA 210210-RO
          1. The Administrator miscalculated the base rent  under  the  42A
          procedure and the 42A procedure  should  not  have  been  applied
          because the first lease  the  owner  was  able  to  provide,  the
          9/1/80-8/31/83 lease, clearly indicates it was  a  renewal  lease
          and  the  monthly  rent  provided  therein  was   $257.00.    The
          Administrator could have easily  extrapolated the rent from  that
          9/1/80-8/31/82 lease, which was  subject  to  the  Guidelines  12
          increase of 17% for a three year lease.

          2. The petitioner current-owner acquired title  to  the  building
          in 1985 and did not receive any lease for the  subject  apartment
          for the period 8/31/83 through 9/30/85.  However,  the  1984  and
          1985 registrations showed a rent of $280.00  was  charged.   This
          may have constituted an overcharge of  $5.00  per  month  if  the
          Guidelines (14) increase of 7% for a two year lease applied.

          3. All increases charged by the owner  were  in  accordance  with
          the applicable Guidelines orders.  If there were  any  errors  in
          calculating the  rent,  they  were  made  by  the  prior  owner's
          attorney, who prepared  the  annual  registration  statement  for
          1984.   The  petitioner  was  justified  in  relying   on   these
          calculations in computing all future rents  to  date;  especially
          in view of the fact that the tenant's objection  was  not  served
          on the Petitioner until  March  13,  1989.   If  there  were  any
          overcharges  they  should  be  refunded   by   the   Petitioner's
          predecessors in title.

          4.  The  imposition  of  treble   damages   and   the   resultant
          assessment  of  a   $25,000.00   overcharge   was   inappropriate
          under the circumstances of this proceeding.

          5. The petitioner requests a hearing .

          6. The petitioner concedes  that  heat  and  hot  water  services
          should  have  been  listed  as  building  wide  services  in  the
          initial registration statement.

     The tenant has interposed an answer opposing  the  Petition.   The  tenant
     asserts, that:

               1. The Petition was not timely.

               2. It was not served on the tenant by the owner

               3. The order below was correct since 
                    a) The owner failed to provide a complete
                       rental history; and
                    b) the overcharge was properly calculated

               4. Intent is irrelevant on the question of 
                  willfulness.  The imposition of treble damages was 

               5.  Owners  by   buildings   with   all   of   their
                  liabilities    and    assume    all    of     the
                  responsibilities of ownership. The  owner  should
                  not be permitted to deprive  the  tenant  of  the
                  tenant's   rights   because   the    registration

          DOCKET NUMBER: SJR 5011; EA 210210-RO
     statement was prepared by an attorney.

               6. In this answer the  tenant  does  not  waive  her
                  rights to continue to contend  that  the  subject
                  apartment is rent controlled and is  not  subject
                  to the Rent Stabilization Law and Code.

     The Commissioner believes that the Petition should be granted in part.

     The  Commissioner  finds  that  the  petition  was   timely   filed.   The
     commissioner notes that, as the tenant may not have been aware,  Petitions
     are not served directly by the petitioners, but are filed  with  DHCR  and
     DHCR then serves a copy on the other party.  Thus, it is not  unusual  for
     the other party to receive its copy of the  Petition  more  than  35  days
     after the appealed order is issued.

     The Commissioner notes  that  annual  registration  statements  have  been
     filed for the subject apartment since 1984.  The Commissioner  notes  that
     although the instant objection to registration was filed  on  November  2,
     1984, and the Petitioner  purchased  the  subject  building  in  1985,  no
     notice of this proceeding was served on the owner until March 13, 1989.

     The Commissioner finds that under the  particular  circumstances  of  this
     case, it is appropriate to calculate the April 1, 1980 rent on  the  basis
     of the rent provided for in the September 1, 1980 through August 31,  1983
     lease (which lease, the Commissioner finds was, clearly,  a renewal lease) 
     by subtracting the 17% renewal increase for a three year lease  commencing
     September 1, 1980 under Guideline 12.  This approach is further  warranted
     by an examination of maximum base records for the subject  premises  which
     discloses that on September 2, 1979 under docket  4M4499  the  then  owner
     submitted  an   Operation   and   Maintenance   and   Essential   Services
     Certification indicating that tenant Raia's apartment was decontrolled  at
     a rental of $219.30 per month.  Thereafter it is appropriate to  calculate
     the stabilized rent for the subject apartment using a deemed lease for the 
     period September 1, 1983 through September  30,  1985.   The  Commissioner
     notes that Rent Guidelines Board Orders promulgated pursuant to  the  Rent
     Stabilization Law provide that fractional  term  renewals  may  be  deemed
     extended so that fractional terms of less than one year may be deemed full 
     one year terms, fractional terms of less than two years may be deemed full 
     two year terms, and fractional terms of  less  than  three  years  may  be
     deemed full three year terms.

     The order below indicates that after the expiration of the  9/1/80-8/31/83
     lease the tenant paid the prior owner $280.00 per month.  By virtue of the 
     fractional terms provisions of the Rent Guidelines Board Guidelines 14 and 
     based on previous decisions by the CAB and the Division, the  Commissioner
     finds that the tenant was in occupancy pursuant to  a  deemed  three  year
     lease running from September 1, 1983 to September 30, 1985, for which  the
     owner was entitled to a 10% increase above the lawful September  30,  1982
     rent of $257.00 as set forth on the rent calculation chart attached hereto 
     and made a part hereof.
     The Commissioner notes that in the answer  to  the  Petition,  the  tenant
     does not refute the accuracy of  such  calculations  as  proposed  in  the
     Petition, as an appropriate method for determining the rent paid on  April
     1, 1980.  The Commissioner also notes that although the  tenant  was  sent
     four separate demands for a rental history from April 1, 1980, the  tenant
     never responded to any of them.  

     The Commissioner also notes that the tenant must  know  what  that  rental

          DOCKET NUMBER: SJR 5011; EA 210210-RO
     history was as she has  resided  in  the  subject  apartment  since  1963,
     according to the Objection the tenant filed below.

     Therefore, the Commissioner finds that the overcharges to be refunded  and
     the tenant's stabilized rent are determined  as  indicated  on  the  chart
     annexed hereto and made a part  hereof  and  the  order  below  should  be
     amended to reflect these findings.  The  Commissioner  further  finds,  as
     all parties concede, that the Administrator  properly  directed  that  the
     registration statement for 1984 be amended to reflect the fact  that  heat
     and hot water are provided services at the subject premises.  As  to  that
     part of the order below, the Commissioner finds that said order should  be

     With regard to the  owner's  contention  that  the  imposition  of  treble
     damages was not warranted, Section 2526.1 of the Rent  Stabilization  Code
     provides in pertinent part that any owner who is found by the DHCR to have 
     collected any rent or other consideration in excess of the legal regulated 
     rent on and after April 1, 1984 shall be ordered to pay to  the  tenant  a
     penalty equal to three times the amount of  such  excess.   If  the  owner
     establishes by a preponderance of the evidence that the overcharge was not 
     willful, the DHCR shall  establish  the  penalty  as  the  amount  of  the
     overcharge plus interest from the date of the first overcharge on or after 
     April 1, 19 84.

     In this case using the complete rental history, the  rent  overcharge  has
     been  calculated  on  the  attached  rent  calculation  chart  as  $730.00
     including treble damages.  The overcharge occurred during the lease period 
     commencing October 1, 1987 (after the current owner's unlawful charging of 
     a $10.00 low rent  allowance  under  Guideline  19  when  it  had  already
     received a low rent allowance of $15.00 under Guideline 17.  The owner has 
     submitted  no  evidence  to  show  the  overcharge  was  not  willful  and
     accordingly the imposition of treble damages was warranted.

     The owner has requested that a hearing be held  in  this  matter  but  has
     failed  to  establish  that  a  hearing  is  necessary  for   the   proper
     determination of this appeal.  This request is  therefore  denied  by  the

     Concerning  the  tenant's  claim  that  the  subject  apartment  is   rent
     controlled, the Commissioner notes that: 1. that  issue  is  not  properly
     before him under this Petition; 2. there is  now  pending  before  a  Rent
     Administrator a proceeding brought by the tenant for  a  determination  of
     the  status  of  her  apartment;  and  3.  on  September  6,  1990,   that
     Administrator sent a notice, to  the  tenant  and  the  owner,  that  said
     Administrator proposes to issue a determination that the apartment is  not
     rent controlled, but rent stabilized.  The Commissioner  also  notes  that
     said notice offers each party the opportunity to comment in writing on the 
     proposed action and, to date, neither  party  has  filed  a  statement  in
     response  to  said  notice.   The  Commissioner  further  notes  that  the
     Division's records, which disclose that a Report  of  Statutory  Decontrol
     due to owner occupancy was accepted under an order issued  in  1962  under
     docket no. DR 44680, indicate that the aforesaid proposed  action  appears
     to be in accordance with the applicable law and regulations  and  that  if
     the issue in question were now before the Commissioner,  the  Commissioner
     would rule herein as the  Administrator  has  proposed  to  rule  in  said

     This order may upon the expiration of the period in which  the  owner  may
     institute a proceeding pursuant to  Article  Seventy-Eight  of  the  Civil

          DOCKET NUMBER: SJR 5011; EA 210210-RO
     Practice Law and Rules, be enforced by the tenant in the following manner: 
     not in excess of twenty percent of the overcharge to be refunded per month 
     may be offset against any rent thereafter due the owner.

     If the owner has already complied with the Administrator's order and there 
     are arrears due to the owner as a result of the instant determination, the 
     tenant  may  pay  off  the  arrears  in  thirty-six  (36)  equal   monthly
     installments.  Should the tenant vacate after the issuance of this  order,
     said arrears shall be payable immediately.

     THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

     ORDERED, that this Petition be, and the same hereby is  granted  in  part:
     and that the Administrator's order be, and the same hereby is  amended  in
     accordance with this order and opinion.  The  lawful  stabilization  rents
     and amount of rent overcharge are established on the attached chart  which
     is fully made a part of this order.  The amount  of  the  rent  overcharge
     through September 30, 1989 is $730.00.


                                                    ELLIOT SANDER
                                                 Deputy Commissioner


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