Docket No. EI 210159-RT
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF
                                                 ADMINISTRATIVE REVIEW
             ETHEL GERVANT,                      DOCKET NO.: EI 210159-RT      
                                                 DISTRICT RENT ADMINISTRATOR'S
                                                 DOCKET NO.: BH 210438-R  
                         FOR ADMINISTRATIVE REVIEW IN PART 

          On September 25, 1990, the above named petitioner-tenant  filed  a
          Petition for Administrative Review  against  an  order  issued  on
          September  13,  1990,   by   a   Rent   Administrator   concerning
          accommodations, known as Apartment E-21  at  2425  Kings  Highway,
          Brooklyn, New York,  wherein  the  Administrator  determined  that
          there had been no overcharges of the tenant's rent and  terminated
          the proceeding.

          On March 26, 1991, the Commissioner issued an  order  and  opinion
          denying the tenant's petition.

          Subsequently, the tenant 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 consideration of the Article 78 petition, the Court (Hon. B. 
          Hurowitz, Kings County)  issued  an  order  on  October  22,  1991
          remitting the proceeding to the New York State Division of Housing 
          and Community Renewal for  further  consideration  in  conjunction
          with the incorporation of a supplementary petition by  the  tenant
          that was received by the Division on October 24, 1990, but was not 
          considered in the Commissioner's opinion.  

          Subsequently the owner was served with the supplementary  material
          and afforded an opportunity to respond within 20 days from date of 

          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 of  a  rent
          overcharge complaint by the tenant on August 18, 1987.

          Docket No. EI 210159-RT

          The tenant took occupancy pursuant to  one-year  lease  commencing
          July 1, 1979, and expiring July 30, 1980, at  a  monthly  rent  of
          $275.00.  The complaint also stated that the  rent  on  March  31,
          1980 was $275.00.  The tenant participates in the Section  8  rent
          subsidy program.

          The owner was served with a copy of the complaint and was directed 
          to submit a complete rent history from the  base  date,  including
          copies of all leases.  The owner complied with this request.

          In Order Number  BH  210438-R,  issued  September  13,  1990,  the
          District Rent Administrator  determined  that  the  initial  legal
          registered rent of $420.59 had been lawfully increased to  $555.79
          in accordance with the orders of the Rent  Guidelines  Board,  and
          that there were no overcharges of the tenant's rent.

          In her petition, dated September 25, 1990, the  tenant  challenges
          the Division's determination of the legal rent  as  based  on  the
          Administrator's failure to consider the D.H.C.R. order dated  July
          8, 1987, directing a  rent  reduction  due  to  the  reduction  of
          various services in the apartment.  This order was affirmed by the 
          Commissioner in Administrative Review Opinion BH 210145-RO, issued 
          on November 16, 1990.  The petition states that, pursuant  to  the
          rent reduction order, the tenant's rent was frozen at the  reduced
          legal  rent  directed  by  the  reduction  order,  and  that   the
          Administrator erred by granting any guidelines increases  at  all.
          Also challenged is the denial of the tenant's request for a  lease
          with a legal rent of $110.00 per  month,  which  is  the  tenant's
          contribution under the Section 8 Program.

          In the supplementary submission of October 24,  1990,  the  tenant
          maintains  that  the  order  finding  no  overcharges  should   be
          reversed, since the service reduction order,  which  is  still  in
          effect,  permits  no  rent  increases.   Furthermore,  the  tenant
          contends  that  the  resulting  refund  of  overcharges  must   be
          allocated proportionately between the tenant and the New York City 
          Housing Authority.
          In its response to the tenant's petition, the owner disputes  that
          the tenant has signed any leases since 1985, and contends that the 
          legal rent is not $110.00 per  month  because  this  is  only  the
          tenant's share of the rent in the Section 8  Program.   The  owner
          also contends that the tenant has refused  its  offer  for  a  new
          refrigerator, as per the  service  reduction  order,  and  that  a
          holdover proceeding has been instituted  by  the  owner  in  Civil

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

          In the instant case, the tenant challenges the determination  that
          the  tenant  has  paid  no  overcharges  on  the  basis   of   the
          Administrator's failure to incorporate a rent reduction order  for


          Docket No. EI 210159-RT

          reduced services in his calculations.

          Section  2523.4  of  the  Rent  Stabilization  Code  provides   in
          pertinent part that a tenant may  apply  to  the  D.H.C.R.  for  a
          reduction of the legal regulated rent to the level in effect prior 
          to the most recent guidelines adjustment, and the  D.H.C.R.  shall
          so reduce the rent for the period for which it is found  that  the
          owner  failed  to  maintain  required  services.   The  tenant  is
          therefore correct that since the Division issued a reduction order 
          under  docket  no.  AK  210465-S  on  July  8,  1987,  which   was
          subsequently upheld by the Commissioner in Opinion No.  H  210145-
          RO, it was incumbent upon the Administrator to include it  in  any
          calculation  of  the  lease  history  for   a   determination   of
          overcharges.  Thus the owner collected overcharges in  the  amount
          of the rent collected in excess of $420.59  (the  rent  in  effect
          prior to the guidelines adjustment prior to the effective date  of
          the reduction order), and the Administrator's failure  to  include
          this in his calculations was incorrect.  As documented in the rent 
          calculations chart affixed hereto and made  a  part  hereof,  this
          amount  is  $13,038.77,  including  treble  damages   and   excess

          However, the other  issue  raised  in  the  petition,  namely  the
          tenant's request for the proportionate  allocation  of  refundable
          overcharges between the tenant, who participates in the Section  8
          rent subsidy program, and the New  York  City  Housing  Authority,
          must  be  resolved  in   accordance   with   the   Administrator's
          determination  that  no  such  overcharges  are  due  the  tenant.
          Throughout the entire period under review, the tenant's  share  of
          the total rent has not been in excess of $110.00 per month,  which
          is less than the adjusted legal rent of $420.59 as  so  stated  in
          this opinion.  The Commissioner has previously held that in such a 
          case, any rent overcharge must be refunded to the  New  York  City
          Housing Authority. [Accord: ARL 09014-B].

          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 as  a  judgment
          by the New York City Housing Authority or not in excess of  twenty
          percent  per  month  thereof  may  be  offset  against  any   rent
          thereafter due the owner by the New York City Housing Authority.

          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          it is

          ORDERED, that the tenant's 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.

                                         ELLIOT SANDER
                                         Deputy Commissioner

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