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


          ------------------------------------X
          IN THE MATTER OF THE ADMINISTRATIVE   ADMINISTRATIVE REVIEW 
          APPEAL OF                             DOCKET NO.: EJ410340RO

                                                DISTRICT RENT    
               Continental House Inc.           ADMINISTRATOR'S DOCKET      
                                                NO.: BH410031RP
                                                  
                                                TENANTS: Gordon T. Thompson
                                                and Nora Kerr
               
                              PETITIONER
          -------------------------------------X
                             

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


               On October 26, 1990, the above-named owner filed a petition 
          for administrative review of an order issued on September 21, 
          1990 by a Rent Administrator concerning the housing 
          accommodations known as 160 West 77 Street, Apartment PH 1,   
          wherein the Administrator determined that the owner had collected 
          excess rent from the tenant.

               This proceeding was commenced on July 3, 1979 by the filing 
          of a Fair Market Rent Appeal under Docket No. T/A 8302 with the 
          New York City Conciliation and Appeals Board (CAB), the agency 
          then responsible for the administration of rent stabilization in 
          New York City.

               The CAB notified the owner of its opportunity to submit 
          appropriate evidence of the rental histories of comparable 
          apartments.  If the owner failed to do so the initial legal 
          regulated rent for the subject apartment would be determined 
          solely on the basis of the special guidelines order issued by the 
          Rent Guidelines Board.

               In response to that notice of its opportunity to submit 
          appropriate evidence of the rental histories of comparable 
          apartments, the owner by letter dated November 8, 1979 advised 
          the CAB that there were no apartments in the building comparable 















           



          to the subject penthouse apartment.  It further asserted that it 
          had requested a real estate broker to advise it of then current 
          rentals of what it felt were comparable apartments in the 
          neighborhood.  Attached to the November 8, 1979 letter from the 
          owner was a letter dated November 7, 1979 from Sackman 
          Enterprises, Inc., of 165 West 73rd Street in Manhattan, in which 
          that firm's managing agent asserted that he had recently rented 
          two apartments on the West Side: a small two-bedroom fourth-floor 
          walk-up at 200 West 78 Street, at $750.00 as of June 1979, and a 
          small two-bedroom garden duplex at 351 Amsterdam Avenue, at 
          $850.00 as of December 1979.

               In response to a later notice from the CAB, the owner 
          asserted that at 158 West 77th Street, the building next to the 
          subject building, there were two one-bedroom penthouses with 
          rentals of $900.00 and $1,000.00 respectively.

               On August 10, 1983, the CAB issued an order and opinion 
          granting the tenant's Fair Market Rent Adjustment application, 
          adjusting the initial legal regulated rent from $950.00 to 
          $517.23 per month effective January 20, 1979.  The rent was 
          established upon the basis of Special Guidelines Order Nos. 10 
          and 10a (which in turn were based upon the 1978 Maximum Base Rent 
          under rent control of $415.39).  Added to that figure was an 
          amount of $39.53 to reflect one-fortieth of the cost of the new 
          equipment installed in the apartment by the owner prior to the 
          tenant's taking occupancy.  With regard to the two apartments at 
          200 West 78th Street and 351 Amsterdam Avenue offered as 
          comparable by the owner, the CAB order found that the building in 
          which those two apartments were located were not comparable to 
          the subject building because they were non-elevator buildings 
          while the subject building was an elevator building.   

               Thereafter, the owner commenced a proceeding in the Supreme 
          Court of the State of New York pursuant to Article 78 of the 
          Civil Practice Law and Rules, seeking a judgment vacating the 
          determination of the CAB.

               On April 1, 1984 responsibility for the administration of 
          rent stabilization in New York City was transferred to the New 
          York State Division of Housing and Community Renewal (DHCR).

               In a memorandum opinion, the Supreme Court, New York County 
          (Martin Evans, J.) held that the CAB had failed adequately to 
          explain why apparently comparable apartments in a nearby building 











           

          were not comparable for rent-setting purposes, to the subject 
          apartment, and that the CAB had not explained why the subject 
          penthouse apartment in an elevator-equipped building would be 
          less valuable than an apartment in a walk-up tenement.  The Court 
          sustained the CAB decision granting an increase for the 
          improvements made to the apartment, but annulled its 
          determination as to comparability and remanded the proceeding to 
          the DHCR for a new determination based on rent comparability.  
          The Courts opinion was reduced to an order and judgment entered 
          on March 7, 1985.

               The DHCR and the tenants, Gordon T. Thompson and Nora Kerr, 
          took an appeal to the Appellate Division from the order and 
          judgment of the Special Term.  By order dated and entered on 
          January 9, 1986, the Appellate Division, First Department 
          unanimously affirmed the order and judgment of the Supreme Court.

               Under Docket No. BF410001RO, the Commissioner remanded the 
          proceeding for the purpose of redetermining the legal regulated 
          rent if the Administrator were to find that adequate comparables 
          were submitted or affirming the prior order of the CAB under 
          Docket No T/A 8302 if no adequate comparables were submitted.

               The Administrator continued the processing of this case 
          under Docket No. BF410031RP which is the case here under review.  
          The Administrator sent notice of the continued processing of the 
          case and afforded the owner an opportunity " . . . to present 
          such evidence as you may desire in connection therewith."

               In response to this notice the owner requested that all 
          materials and answers previously submitted before the CAB under 
          Docket No. T/A 08302 be incorporated in this case.  The record 
          does not reflect the submission of any new documents by the 
          owner.

               In the order of September 21, 1990, the Administrator 
          determined that the comparability data supplied by the owner was 
          not sufficient for consideration under the comparability test.  
          The Administrator stated that the reason for the inadequacy of 
          the submission, which consisted of two apartments at 200 West 
          78th Street and 351 Amsterdam Avenue, was the owner's failure to 
          submit rental history forms for all stabilized apartments in the  
          comparable line and proof of service of an Initial Regulated Rent 
          notice (DC-2 notice) for each apartment.  Based thereon, the fair 
          market rent was again established at $517.23 per month.



               In its petition for administrative review, the owner again 
          raises the issue of vacancy improvements.  The owner also states 
          that it was unable to submit rental history forms for all 
          stabilized apartments in the comparable line because there were 












           

          no other apartments which could have been compared to the 
          subject apartment.  The owner acknowledges that the proposed       
          comparability  at 200 West 78th Street involved unverified 
          approximations because the owner was unable to obtain more 
          accurate information.

               In his answer to the petition for administrative review, the 
          tenant urges affirmation of the Administrator's order.
               
               The Commissioner is of the opinion that this petition for 
          administrative review should be denied.                          

               With regard to alleged vacancy improvements, the 
          Commissioner finds that this issue was determined in the earlier 
          proceeding.  As noted above, that portion of the CAB's order was 
          sustained by order of the Supreme Court, which was affirmed by 
          the Appellate Division, and was final as a result of that court 
          order.

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

               With regard to the issue of the adequacy of the comparables 
          proposed by the owner, the Commissioner finds that the owner 






           

          failed to meet the requirements which would have allowed the 
          Administrator to use the proposed comparables in the 
          comparability portion of the computation of the legal initial 
          stabilization rent.  The owner failed to submit rental history 
          data for the proposed comparables and proof of service of DC-2 
          notices and was unable to prove the base date of the proposed 
          comparables or whether those rents had been challenged or were 
          not subject to challenge.  In fact, the owner acknowledges that 
          the proposed comparability at 200 West 78th Street involved  
          unverified approximations.  

               The Administrator therefore properly rejected the owner's 
          comparables for use in the comparability study based on the lack 
          of adequate documentation.  It is noted that there are various 
          possible reasons why a penthouse apartment in an elevator 
          building might rent for less than an apartment in a walk-up 
          building, including different rental history patterns, 
          improvements or renovations, or new construction.

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

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

               ISSUED:



                                             
                                                                           
                                                  JOSEPH A. D'AGOSTA
                                                  Deputy Commissioner






























           



















           






                    ADMINISTRATIVE REVIEW DOCKET NUMBER.: EJ410340RO 


                                   PROCESSING ATTORNEY:  JERRY GRUEN 


               Copies of orders to be mailed to:


               
               Landlord and/or Attorney           Tenant and/or Attorney


               
               Continental House Inc.             Gordon T. Thompson and    


               220 East 86 St. - 3rd floor        Nora Kerr                

               
               New York, N.Y.  10028              c/o Teitelbaum, Hiller,  


               ATTN:  A. FRERICHS                 Rodman, Paden & Hilisher, 


                                                  PC 260 Madison Avenue    

                                                       
                                                  New York, N.Y.  10016     


                                                                           


                                                                            



                    






    

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