ED 110330 RO
                                  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

          APPEAL OF                              DOCKET NO. ED 110330-RO

                                              :  DISTRICT RENT OFFICE
               Ciampa North Co.,                 DOCKET NO. ZCG-110245-R
                                                 TENANT: Narcisa Leon Acuna 

                                PETITIONER    : 

                                       IN PART

          On April  24,  1990  the  above-named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          April 9,  1990  by  the  Rent  Administrator,  92-31  Union  Hall
          Street, Jamaica, New York concerning the  housing  accommodations
          known as 139-81 35th Avenue, Flushing, New York, Apartment  No.6E
          wherein the Rent Administrator  determined  that  the  owner  had
          overcharged the tenant.

          The issue herein is whether the Rent  Administrator's  order  was

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization  Law  and  Sections  2520.11(e),   2520.11(p)   and
          2526.1(a) of the Rent Stabilization Code.

          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 originally commenced by the filing  in  July,
          1988 of a rent overcharge complaint by the tenant, in  which  she
          stated that she had commenced occupancy on March  1,  1986  at  a
          rent of $750.00 per month.

          The owner was served  with  a  copy  of  the  complaint  and  was
          requested to submit rent records to prove the lawfulness  of  the
          rent being charged.   In  answer  to  the  complaint,  the  owner
          submitted a computerized rent ledger for April 1, 1984, April  1,
          1985 and  February  1,  1986,  and  contended  that  the  subject
          apartment was destabilized due to the expiration of Real Property 
          Tax Law (RPTL) Section 421-a tax abatement benefits.   The  owner
          later  submitted  a  Section  421  Certification  of  Eligibility
          stating that the subject building was completed on July 28, 1972. 

          In an order issued on April 9, 1990 the Administrator  calculated
          the lawful stabilization rent on the basis of the prior  tenant's

          ED 110330 RO
          April 1, 1984  rent  of  $446.99,  and  found  an  overcharge  of
          $39,570.16, including treble damages, as of April 30, 1990.   The
          rent calculation chart noted  that  the  building  was  completed
          prior to January 1, 1974 and was therefore subject  to  the  Rent
          Stabilization Law.

          In this petition,  the  owner  contends  in  substance  that  the
          subject apartment is not subject to rent  regulation  because  it
          was granted tax abatement benefits pursuant to RPTL Secti n  421-
          a, which was amended (relevantly in  Section  421-a[2][f][i])  by
          Chapter 346  of  the  Laws  of  1984,  Section  1  to  deregulate
          apartments vacated after the  expiration  of  the  benefits,  and
          because the complainant commenced occupancy after a vacancy  that
          occurred subsequent  to  the  expiration  of  the  Section  421-a
          benefits on June 30, 1983.

          In answer, the tenant  asserts  in  substance  that  the  subject
          apartment has been registered as stabilized since 1984; that  she
          presently has a stabilized lease; and that the subject  apartment
          was never "vacant" after the  initial  registration  because  she
          moved in the same day that the prior tenant moved out.

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

          Section  26-504  of  the  Rent  Stabilization  Law  of  1969,  as
          implemented  by  Sections  2(f)  and  2(g)  of  the  former  Rent
          Stabilization Code  and  Section  2520.11  of  the  current  Rent
          Stabilization Code, generally brings within  the  ambit  of  rent
          stabilization apartments in  buildings  containing  six  or  more
          dwelling  units  and  completed  between  February  1,  1947  and
          December 31, 1973.  The owner's argument regarding the  exemption
          of the subject apartment from rent regulation rests upon  Section
          1 of Chapter 346 of the Laws of 1984, which modified RPTL Section 
          421-a (2)(f) to read in pertinent part that: 

               (f) Notwithstanding the provisions of any local law  for
               the stabilization of rents in multiple dwellings or  the
               emergency tenant protecti n  act  of  nineteen  seventy-
               four, the rents of a unit  shall  be  fully  subject  to
               control under such local law or such act, unless  exempt
               under such local law or such act from control by  reason
               of the cooperative or condominium status  of  the  unit,
               for a period of ten years or for  the  period  any  such
               applicable  law  or  act  is  in  effect,  whichever  is
               shorter.  Thereafter, such rents shall  continue  to  be
               subject to such control to the same extent  and  in  the
               same  manner  as  if  this  section  had  never  applied
               thereto, except that such rents  shall  be  decontrolled

               (i) with respect to units subject to the provisions of  this
               section on the effective date of this  subparagraph  such  a
               unit becomes vacant after the expiration of  such  ten  year
               period or applicable law or act.

          Section 3 of Chapter 346 of the Laws of 1984 provided that:

               Section 3.  This  act  shall  take  effect  immediately,

          ED 110330 RO
               except that section one of this act shall be  deemed  to
               remain  in  full  force  and  effect  only   until   May
               fifteenth, nineteen hundred  eighty-five  and  that  the
               provisions  of  paragraph  (f)  of  subdivision  two  of
               section four hundred twenty-one-a of the  real  property
               tax law as amended by  such  section  one  of  this  act
               shall revert to the language prior to such amendment.

          It is the position of the DHCR that the words  "with  respect  to
          units subject to the provisions of this section on the  effective
          date  of  this  subparagraph"  were  not  meant   to   deregulate
          apartments which were built prior to the effective  date  of  the
          amendment and were independently subject to regulation by  virtue
          of being in a building  completed  before  January  1,  1974  and
          containing six or more units.  This position is reflected in  the
          current Rent Stabilization Code, effective May  1,  1987,  nearly
          three years after Chapter 346 of the  Laws  of  1984.   The  only
          relevant mention of RPTL Section 421-a is in Section  2520.11(p),
          which exempts from regulation:

               (p) housing accommodations  in  buildings  completed  or
               substantially rehabilitated as family units on or  after
               January 1, 1974 or  located  in  a  building  containing
               less than six housing  accommodations,  and  which  were
               originally  made  subject  to  regulation  solely  as  a
               condition of receiving tax benefits pursuant to  section
               421-a of the Real Property Tax Law, as amended, and:

                    (1) the housing accommodations which  were  subject
                    to  the  RSL  pursuant  to  section  421-a   became
          This exempts from regulation, upon  a  vacancy,  only  apartments
          which would not have been stabilized except for  the  receipt  of
          421-a benefits.  Because the subject building  was  completed  on
          July 28, 1972, and because it contains at least  six  apartments,
          this exemption does not apply.

          This is the same interpretation held by  the  agency  responsible
          for  administering  RPTL  Section  421-a.   Section  2.7  of  the
          regulations promulgated  by  the  New  York  City  Department  of
          Housing Preservation and Development on  August  27,  1987,  also
          three years after Chapter 346, provides in pertinent part that:

               To be eligible for partial tax exemption the  land  upon
               which the eligible project  is  located  must  meet  the
               following letting, rental and occupancy requirements:

                    (2) Notwithstanding the  provisions  of  any  local
               law  for  the  stabilization  of   rents   in   multiple
               dwellings or the  emergency  tenant  protection  act  of
               1974, the rents of a unit  shall  be  fully  subject  to
               regulations under such local law  or  such  act,  unless
               exempt under such local law or such act from  regulation
               by reason of the cooperative or  condominium  status  of
               the  unit,  for  the  entire  period  during  which  the

          ED 110330 RO
               property is receiving tax benefits pursuant to the  Act,
               or for the period any such applicable local law or  such
               act is in effect whichever is shorter.  Thereafter  such
               rents shall continue to be subject  to  such  regulation
               to the same extent and in the same  manner  as  if  this
               section had  never  applied  thereto,  except  that  for
               dwelling units in buildings completed, as that  term  is
               defined herein, on or after January 1, 1974, such  rents
               shall be deregulated if:

                    (a)  with respect to dwelling units located in multiple 
                         dwellings completed after  January  1,  1974  such
                         unit becomes vacant after the  expiration  of  the
                         lease for the unit in  effect  when  such  benefit
                         period or applicable law or Act expires . . .

          This again is exempting,  upon  vacancy,  only  apartments  which
          would have been exempt from the time of their completion but  for
          the receipt of 421-a benefits.

          Because the subject apartment does not  fall  under  any  of  the
          exemptions,  it  is  subject  to  regulation   under   the   Rent
          Stabilization  Law  and  Code.   The  tenant   is   entitled   to
          stabilization leases at lawful rents, and the owner  is  required
          to register the building annually with the DHCR.

          Because the language of Chapter 346 of the  Laws  of  1984  could
          give rise to a good faith belief that the subject  apartment  was
          not subject to rent regulation, and that  the  DHCR  was  without
          jurisdiction,  the  Commissioner  does  not  consider  that   the
          overcharge should be considered to be willful.   Interest  rather
          than treble damages has therefore been imposed.   The  overcharge
          from March 1, 1986 to February 28, 1987 is therefore $240.43 x 12 
          = $2,885.16; from March 1, 1987 to February 28, 1989 is $260.06 x 
          24 = $6,241.44; and from March 1,  1989  to  April  30,  1990  is
          $283.48 x 14 = $3,968.72.  Interest through April  30,  1990  for
          the respective overcharges is therefore  $962.93,  $1,240.49  and
          $223.24.  The total overcharge is  $15,805.46,  including  excess
          security of $283.48. 

          Because of the  possibility  that  the  rents  charged  were  not
          reduced after the Administrator's order,the owner is cautioned to 
          adjust  the  rent,  in  leases  after  those  considered  by  the
          Administrator, to amounts no greater than that determined by  the
          Administrator's order plus any lawful increases, and to  register
          any adjusted rents with the Administrator's order being given  as
          the reason for the adjustment.  Because of the  possibility  that
          the tenant  herein  may  have  vacated  by  the  time  that  this
          determination is issued, a copy of this  determination  is  being
          mailed to the tenant-in-occupancy.

          This order may, upon the expiration of the period  in  which  the
          owner may institute a proceeding pursuant to Article  78  of  the
          Civil Practice Law and Rules, be filed and enforced by the tenant 
          in the same manner as a judgment  or  not  in  excess  of  twenty
          percent  per  month  thereof  may  be  offset  against  any  rent
          thereafter due the owner.

          THEREFORE, in accordance with  the  Rent  Stabilization  Law  and

          ED 110330 RO
          Code, it is

          ORDERED, that this Petition be, and the same hereby  is,  granted
          in part and that the Rent Administrator's order be, and the  same
          hereby is, modified in accordance with this  order  and  opinion.
          The total overcharge, is $15,805.46 as of April  30,  1990.   The
          lawful stabilization rent is $609.60 per month in the lease  from
          March 1, 1989 to February 28, 1991.

                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner



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