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

     APPEAL OF                              DOCKET NO.: EH 810197-RO
                                            DRO DOCKET NO.: SEB-8-1-0123-R
                           PETITIONER    :  TENANT: LISA JOHNSTONE


     On August 21, 1990,  the  above  named  petitioner-owner  filed  a  timely
     Petition for Administrative Review against an order  issued  on  or  about
     August 9, 1990, by the Rent Administrator, 55 Church Street, White Plains, 
     New York, concerning housing accommodations known  as  Apartment  B-8,  27
     Union Road, Spring  Valley,  New  York,  wherein  the  Rent  Administrator
     determined that had been an overcharge and ordered a  refund  of  $583.60,
     including interest, and directed the  owner  to  refund  any  security  in
     excess of one month's rent.

     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.

     The tenant commenced this proceeding on December 21,  1989  by  filing  an
     overcharge complaint based in part on the allegation that  the  owner  had
     collected two months security.  The tenant further alleged she moved  into
     the subject apartment on January 19, 1989 under a  one  year  lease  at  a
     rental of $560.00.

     On February 15, 1990, the Administrator requested that  the  owner  submit
     leases for the complaining tenant, the last lease  of  the  prior  tenant,
     and the lease upon which the vacancy factor was determined.

     In  response  the  owner  submitted  copies  of  certain  leases  for  the
     complaining tenant and the prior tenant, but did not submit the  requested
     leases  upon which the vacancy factor had been based.

     On March 20, 1990 the owner was requested to submit a copy of a lease  for
     a comparable apartment on which the vacancy factor was based and a copy of 
     the complaining tenant's vacancy lease.  The owner was also  requested  to
     describe the method it used to determine the tenant's vacancy rent.

     In a response dated March 26, 1990, the owner stated that it had  computed
     the tenant's vacancy rent by starting with the November 1984-October  1985
     rent of $470.00 and then successively applying rent increase  of  7%,4%,3%
     and 4.5% which were alleged to be  allowed  for  1984(sic),1985,1986,  and
     1987 respectively, yielding $562.95 which was rounded off to $560.00.


          DOCKET NUMBER: EH 810197-RO
     In addition, the owner alleged that the subject apartment  was  comparable
     to apartment B-10 which was rented on May 12, 1987 for $550.00 under a one 
     year lease to expire April 30, 1988.

     In the order herein under review the Administrator found  that  the  owner
     had improperly computed the tenant's rent.  The Administrator stated  that
     because the prior tenant had vacated before his or her lease had  expired,
     the owner should have used the rent in the last prior full lease  term  as
     the base rent for computing the complaining tenant's initial rent.

     Accordingly, the Administrator used the $505.88 rent in the lease  of  the
     prior tenant which expired on October 31, 1987 (rather than the two  month
     renewal thereof) as the base rent.  To this the Administrator added  a  5%
     vacancy allowance and a 2 1/2% Guidelines  increase,  thereby  determining
     the lawful vacancy rent for the complaining tenant to be  $543.82,  rather
     than the $560.00 actually charged.

     Based thereon, the  Administrator  computed  a  $583.60  overcharge,  with

     In this petition the owner contends the Administrator's order is incorrect 
     and should be modified because the Administrator "fixed the  instant  rent
     at $543.82 for reasons which were not clear."  In  particular,  the  owner
     questions  why  the  submitted  comparable  lease  was  not  used  by  the
     Administrator to determine the tenant's  rent.   In  addition,  the  owner
     alleges that fact that the prior lease had not been for a full lease  term
     should not have prevented its use by the Administrator  to  determine  the
     tenant's vacancy rent.

     Finally, the owner alleges that it  had  submitted  proof  that  the  1985
     registered rent for the subject apartment  was  $470.00  and  that  lawful
     Guidelines increases were then used to arrive at the $560.00 rent.

     The tenant did not answer this petition, although given the opportunity to 
     do so.

     The Commissioner is of the opinion that this petition should be denied.

     The vacancy rent for a one year lease commencing between October  1,  1987
     and September 30, 1988 in Rockland County was to be a  2  1/2%  Guidelines
     increase  plus  either  the  highest  comparable  rent  or  a  5%  vacancy
     allowance,  whichever  resulted  in  a  lower  rent.    Accordingly,   the
     Administrator correctly did not use the comparable $550.00 lease.

     Furthermore, the  Administrator  correctly  did  not  use  the  two  month
     November, 1987-December,1987 renewal lease rent as the basis for computing 
     the complaining tenant's January 1988 initial rent.  In the  first  place,
     Division policy precludes the use of a lease in effect for three months or 
     less from being used  to  compute  a  subsequent  lease  rent.   Secondly,
     Section 2502.5(c)(6) of the Tenant Protection Regulations provides that in 
     the event a tenant vacates before the end of a lease  term,  in  computing
     the following rent the prior lease rent should be  recomputed  to  be  the
     rent for a leasing having the  duration  of  the  actual  occupancy.   For
     example the rent for a three year lease vacated after one year  should  be
     recomputed to be the rent for a one year lease.  Under this  principle,  a
     one year lease vacated after two months should be considered a lease for 

          DOCKET NUMBER: EH 810197-RO
     zero years in computing the subsequent lease rent, i.e., the rent  of  the
     lease prior to the early-vacated lease should be used.  The  Administrator
     correctly applied this principle to the situation herein where  the  lease
     period was contemplated to be two months at the outset but where the owner 
     charged the rent applicable to a one year renewal lease.

     Finally the owner's  claim  that  it  properly  computed  rents  from  the
     November 1, 1984-October 31, 1985  rent  of  $470.00  is  incorrect.   The
     Commissioner notes that of the four  percentage  increases  cited  by  the
     owner in its answer [7%(1984), 4%(1985), 3%(19986) and 4.5%  (1987)]  only
     the 3% figure is correct for a  one  year  lease  renewal.   It  is  these
     incorrect figures that yield the $562.95 figure cited by the owner.

     In fact, the leases  show  that  the  owner  did  use  correct  Guidelines
     increases (4 1/2%, 3% 2 1/2%) when it actually computed the three  renewal
     leases for the prior tenant.  The owner's error occurred when setting  the
     complaining tenant's  initial  lease,  where  the  Administrator's  method
     should have been used.

     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
     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 thereof per  month
     may be offset against any rent thereafter due the owner.

     THEREFORE, in accordance with the  Emergency  Tenant  Protection  Act  and
     Regulations, it is

     ORDERED, that this petition be, and the same hereby  is,  denied  and  the
     Rent Administrator's order be, and the same hereby is, affirmed.


                                     ELLIOT SANDER
                                     Deputy Commissioner


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