EC 410337 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          APPEAL OF                               DOCKET NO.: EC 410337 RO                                
                        C.E.G. CO.
                         C/O                      DRO DOCKET NO.: L 3118147 T   
                                                  TENANT:  PETER MARINOS

                                       IN PART

          On March 5, 1990, the above-named petitioner-owner timely refiled 
          a Petition for Administrative Review against an order issued on 
          December 22, 1989 by a Rent Administrator, concerning housing 
          accommodations known as Apartment 2H at 180 West 93rd Street, New 
          York, New York, 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 initiated 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 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 appeal.

          This proceeding was originally commenced by the filing of an 
          application challenging the initial regulated rent on March 27, 
          1984.  The tenant had assumed occupancy of the subject apartment on 
          March 1, 1976 pursuant to a two year lease at a rent of $300.00 per 

          EC 410337 RO

          The owner was served with the complaint and informed of the 
          procedures for determining the legal fair market rent.  The owner 
          was also afforded an opportunity to submit June 30, 1974 
          comparability data or post June 30, 1974 comparability data.

          The owner then returned June 30, 1974 comparability data on other 
          apartments in the subject line that was incomplete and 

          On December 22, 1984 the Rent Administrator adjusted the initial 
          legal regulated rent by establishing a fair market rent of $253.35, 
          effective March 1, 1976, the commencement date of the initial rent 
          stabilized lease, and directed the owner to refund to the tenant 
          the excess rent in the amount of $5,970.32.

          Subsequently, on February 1, 1990, the Administrator issued an 
          amended order which corrected a calculation error in the first 
          order wherein the total amount of excess rent was increased to 
          $8,288.55.  The lawful stabilization rent was unchanged.  

          In its petition the owner contends that the rents for comparable 
          apartments in the subject building would show that the tenant's 
          initial stabilized rent was not excessive.  The owner submits for 
          the first time with its petition leases for 2 apartments in the 
          subject line as well as leases for claimed comparable apartments in 
          an adjacent building also owned by the petitioner.  The owner also 
          seeks apportionment of the overcharge with the owners prior to its 
          purchase of the building on March 1, 1981.  The owner includes an 
          attached schedule indicating that the prior owner is responsible 
          for total excess rent of $2,615.11 covering the period from March 
          1, 1976 through February 28, 1981.  As a result, the current owner 
          contends that his personal liability is reduced to $5,673.44 (Total 
          excess rent of $8,288.55 - $2,615.11 = $5,673.44).  The petition 
          includes an affirmation of service of the petition on the prior 

          The tenant responds that the owner's other building is better 
          maintained than his own, and that it should not be used for 
          comparable rents.

          The Commissioner is of the opinion that this petition should be 
          granted in part.

          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 
          determined rents generally prevailing in the same area for 
          substantially similar housing accommodations, it is DHCR's 

          EC 410337 RO

          procedure for fair market rent appeal cases filed prior to April 1, 
          1984 to allow owners to submit June 30, 1974 free 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 an initial legal regulated rent notice (DC-2 Notice) or 
          apartment registration form indicating that the rent is not subject 
          to challenge.

          The record in this case establishes that the owner was served with 
          the tenant's fair market rent appeal and, in a later notice, was 
          duly notified of the opportunity to submit free market rental data 
          of substantially similar housing accommodations for use in 
          determining the initial stabilized rent, as provided in Section 26- 
          513 of the Rent Stabilization Law. 

          Nevertheless, the comparability data submitted below by the owner, 
          which only referred to other apartments in the subject line was 
          incomplete and undocumented.  The leases for those apartments - as 
          well as the leases for the allegedly comparable apartments in the 
          adjacent building - were not submitted below and therefore cannot 
          be considered on appeal.  At any rate, the data would not have met 
          the requirements for usability since all the apartments may still 
          be subject to a fair market rent appeal because there is no proof 
          that the tenants in those apartments were served with the DC-2 
          notice or the initial registration.  Finally it is noted that the 
          claim in the petition that all the apartments in the complainant's 
          line were rent controlled at the time the complainant signed his 
          lease is contradicted by the owner's comparability data submitted 
          below which states that apartments 3H and 5H were decontrolled as 
          of June 30, 1974.  Accordingly, the Rent Administrator correctly 
          determined the initial stabilized rent based on the special fair 
          market rent guidelines alone.

          However, the Commissioner grants the petitioner's request for 
          apportionment of overcharges with the prior owner as based on their 
          respective periods of ownership.  Insofar as the prior owner has 
          not responded to the petition, the apportionment of overcharges is 
          hereby modified to the amounts in the petitioner's schedule, as 
          follows:  liability of prior owner = $2,615.11; liability of 
          current owner = $5,673.44.

          This order and opinion is issued without prejudice to the tenant's 

          EC 410337 RO

          right, if any, to proceed against the former owner in a court of 
          competent jurisdiction.

          The owner is directed to roll back the rent to the stabilized rent 
          consistent with this order and opinion, and to refund or fully 
          credit against future rents over a period not exceeding six months 
          from the date of receipt of this order, any rent paid by the tenant 
          herein in excess of the lawful stabilization rent. 

          In the event the owner does not take appropriate action to comply 
          within 30 days from the date of this order, the tenant may credit 
          the excess rent against the next month(s) rent until fully offset.

          THEREFORE, in accordance with 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, modified in accordance with this Order and Opinion.


                                                  JOSEPH A. D'AGOSTA
                                                  Acting Deputy Commissioner

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