EJ 410347 RT; EJ 410352 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



          ----------------------------------X     S.J.R. 5631
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW          
          APPEALS OF                              DOCKET NOS.:  EJ 410347 RT  
                                                                EJ 410352 RO
                 DOMINICK GENOVESE, TENANT
                          AND
                 MARIE BARTONE, LANDLORD,
                                                  DRO DOCKET NO.: BL 410037 RP
                                 PETITIONERS
          ----------------------------------X                                   


                  ORDER AND OPINION REMANDING PROCEEDING ON APPEAL


          On  October  17,   1990   the   above-named   petitioners   filed
          Administrative Appeals against an order issued on  September  12,
          1990 by the District Rent Administrator, 92-31 Union Hall Street, 
          Jamaica New York, concerning the housing accommodations known  as
          146 West Houston Street, Apartment 3B, New York, New York.

          Subsequent thereto, the petitioner-landlord filed a  petition  in
          the Supreme Court pursuant to Article 78 of  the  Civil  Practice
          Law and Rules  requesting  that  the  "deemed  denial  "  of  her
          administrative appeal be annulled.

          On May 7, 1991, an order was signed by Justice  McCooe  remitting
          the proceeding to the Division for an  expeditious  determination
          of the landlord's administrative appeal.

          The  Commissioner  deems  it  appropriate  to   consolidate   the
          landlord's  and   the   tenant's   administrative   appeals   for
          consideration under this order and opinion as they involve common 
          issues of law and fact.

          The Administrative Appeals are being considered pursuant  to  the
          provisions of 9 NYCRR 2200.2f(8) and 9 NYCRR 2202.22.
          This proceeding was initiated in 1983 when  the  tenant  filed  a
          Statement of Violations (2C 32885) alleging overcharge, with  the
          Office of Rent Control, the predecessor agency to  the  Division.

          In  response  thereto,  the  landlord  stated  that  the  subject
          building was completely renovated  on  November  25,  1958;  that
          there is a new Certificate of Occupancy showing  there  are  five
          apartments; that she does not know if she ever needed a decontrol 
          order; and, that the building was never a rooming  house  to  her
          knowledge.

          On March 14, 1984, the  District  Rent  Administrator  issued  an
          order (Docket No. 2AD 41696) finding the accommodation herein  to
          be subject to the rent regulations, and establishing the  maximum






          EJ 410347 RT; EJ 410352 RO
          rent at $455.00 per month.

          The landlord filed an appeal, alleging that she had occupied  the
          subject apartment for more than a year  between  1959  and  1960,
          and, therefore, that it was decontrolled on the  basis  of  owner
          occupancy and, if it was subject to  rent  control,  the  maximum
          rent  established  did  not  take  into  consideration   improved
          services provided by the landlord.  With the appeal, the landlord 
          submitted certain evidence in an effort to support her contention 
          that she had resided in the subject apartment for more  than  one
          year.

          On July 2, 1984, the Commissioner issued an order (Administrative 
          Appeal Docket No. SPLA 36338) remanding  the  proceeding  to  the
          District  Rent  Administrator  for   further   processing.    The
          Administrator was directed to hold a hearing so that the  parties
          may have an opportunity to produce witnesses  and/or  documentary
          evidence for and against the landlord's claim of owner  occupancy
          during the period alleged.  It  was  also  specifically  directed
          that the landlord be directed to produce utility records for  the
          period in question, and to submit the original certified copy  of
          the   voter   registration   previously   submitted.    If    the
          Administrator determined that  decontrol  was  not  warranted,  a
          comparability study was to be made as a  basis  for  establishing
          the maximum legal rent.

          On October  24,  1984,  the  Administrator  issued  a  Notice  of
          Proceeding to Reconsider Order Pursuant to  Remand,  wherein  the
          landlord was afforded an opportunity to submit  utility  records,
          and the original certified copy of the voter  registration.   The
          tenant was afforded the opportunity to submit evidence opposed to 
          the landlord's claim of owner occupancy.

          The  landlord  submitted  a   certified   copy   of   the   voter
          registration, but stated that the utility company could no longer 
          supply records for the period in question.

          The  tenant  did  not  submit  any  evidence  in  answer  to  the
          landlord's submissions.

          A physical inspection and comparability study was  ordered.   The
          tenant  did  not  make  the  subject  apartment   available   for
          inspection, but the landlord exhibited  another  unit  which  she
          stated was comparable to the subject accommodation.

          On May 20, 1985, the District Rent Administrator issued an  order
          (LC-000020-RP) affirming the previous order of March 14, 1984. 

          On June 4, 1985, the  landlord  filed  an  administrative  appeal
          (ARL 03238-L) against the District Rent Administrator's order  of
          May 20, 1985.  In her appeal, the petitioner-landlord  contended,
          in substance, that she had submitted sufficient documentation  to
          sustain a determination of owner occupancy  decontrol;  that,  if
          the apartment is not decontrolled, a physical  inspection  should
          be had of the subject premises on prior  written  notice  to  the
          parties and their  respective  attorneys;  that  a  comparability
          study should be prepared  to  determine  all  of  the  additional
          improvements   and/or   services   provided;   and,   that    the
          Administrator failed to comply with these directives as set forth 






          EJ 410347 RT; EJ 410352 RO
          in the order of remand issued July 2, 1984.

          A hearing was held in this proceeding on March 23, 1987,  whereat
          the parties appeared in person and by counsel.  Various witnesses 
          appeared for the landlord.

          The landlord stated, in substance, that the subject building  was
          purchased in 1955; that it  was  old  and  dilapidated,  and  the
          building was renovated after being vacant for two years; that she 
          and her family moved into  the  subject  accommodation  two  days
          before Thanksgiving, 1958; that  they  lived  in  this  apartment
          until the middle of January, 1960; that, during  this  time,  the
          two apartments on the  second  floor  were  being  renovated  and
          combined  into  one  apartment  for  their  use;  that  she   had
          registered to  vote  in  1959  from  the  subject  accommodation,
          submitting a certified copy of a voting registration record; and, 
          that she got along well with the subject tenants.

          On cross examination, the landlord stated, in substance that  she
          is suing the tenants for non-payment of rent and  damage  to  the
          building, and the tenants are suing her for personal  injury  and
          negligence; and, had no comment on the certified copy of a voting 
          registration record, bearing the raised  seal  of  the  Board  of
          Elections, indicating that she had registered to vote on  October
          10, 1959 from Apartment 2 in the subject building.  This copy was 
          submitted on behalf of the tenants.

          The landlord's witnesses all testified that they had visited  the
          landlord and her family in the subject accommodation.


          In an order and opinion issued on May 6, 1987,  the  Commissioner
          was of the opinion that the landlord's appeal  under  Docket  No.
          ARL 03238-L  should  be  granted  in  part,  and  the  proceeding
          remanded  to  the  District  Rent   Administrator   for   further
          processing.

          The Commissioner found that as to the  issue  of  owner-occupancy
          decontrol of the subject accommodation, for the reasons set forth 
          below, such decontrol was not warranted.

          The only  documentary  evidence  submitted  by  the  landlord  in
          support of her contention that  she  had  lived  in  the  subject
          accommodation between  November  1958  and  January  1960  was  a
          certified copy of a  voting  registration  record  dated  October
          1959.  In rebuttal thereto,  the  tenant  submitted  a  certified
          copy, bearing a raised seal  which  was  not  in  the  landlord's
          submission, which was identical to  the  landlord's  copy  except
          that it indicated the landlord as occupying Apartment  2  in  the
          subject building.  The credibility of the  landlord  was  brought
          into question by her stating, on direct examination, that she had 
          good relations with tenants, but admitting on  cross  examination
          that there were court cases pending  between  the  parties.   The
          Commissioner found that the landlord had not sustained the burden 
          of proof to warrant decontrol.

          The Commissioner was of the opinion that to establish  the  legal
          maximum rent of the subject accommodation, a comparability  study
          was required, which was not theretofore properly conducted.






          EJ 410347 RT; EJ 410352 RO

          On remand, the Administrator was directed to afford  the  parties
          an opportunity to suggest comparable apartments.  Inspections  of
          the subject apartment and the comparable apartments  were  to  be
          made, on due notice  to  the  parties  and  their  counsel.   The
          tenants were to be advised  that  failure  to  make  the  subject
          apartment available for inspection may lead to a determination of 
          the legal maximum rent without any rebuttal by the tenants.

          On September 12, 1990, the District Rent Administrator issued  an
          Order Pursuant to  Remand  which  sustained  the  Administrator's
          prior order of May 20, 1985 and  again  established  the  maximum
          rent for the subject apartment at $455.00 per month as of January 
          1, 1983.

          On appeal, the petitioner-landlord alleges,  in  substance,  that
          the District Rent Administrator failed to address the substantive 
          issues raised in the landlord's response to the Division's notice 
          for additional information upon remand; that  it  was  arbitrary,
          capricious and an abuse of discretion to sustain the maximum rent 
          set by the earlier order without setting forth any  reason  as  a
          basis for not considering the landlord's comparable rents  and/or
          other  supporting  documentation;  that  it  was  error  for  the
          District Rent Administrator not to comply with the Commissioner's 
          directive by failing to  consider  the  landlord's  comparability
          rental  data;  that  as  a  matter  of  law,  the  District  Rent
          Administrator  erred  in  failing  to  consider  the   costs   of
          improvements and increased services in the establishment  of  the
          maximum rent; that the  District  Rent  Administrator  failed  to
          consider the jurisdictional issue raised by the landlord  in  the
          reply to the notice for additional information; that the landlord 
          devoted eight pages  in  said  reply  to  establishing  that  the
          subject premises was  substantially  reconstructed  in  1958  and
          therefore falls  within  the  exemption  provisions  of  9  NYCRR
          2200.2(f)8; that the issue of whether the  apartment  is  subject
          to rent control may be raised at any time during the course of an 
          administrative  proceeding;  and  this  argument  and  supporting
          documentation clearly required review and  consideration  by  the
          District  Rent  Administrator;  and  that   the   District   Rent
          Administrator's order provides no factual or legal basis for  not
          addressing and discounting this jurisdictional question in issue.

          On appeal, the petitioner-tenant alleges, in substance, that  the
          District Rent Administrator failed to properly weigh the evidence 
          of  comparable  apartments  submitted  by  the  tenant  when  the
          District Rent Administrator yet again set  the  maximum  rent  at
          $455.00  per  month;  and  that  the   landlord's   evidence   of
          improvements and of rents for  comparable  apartments  should  be
          disregarded as untimely, erroneous as to the law, and  incomplete
          or insufficient as to the facts.

          After a careful consideration of the entire  evidence  of  record
          the Commissioner is of the opinion that the proceeding should  be
          remanded  to  the  District  Rent   Administrator   for   further
          processing as provided hereinbelow.

          A review of the record before the  District  Rent  Administrator,
          including the progress sheets of  the  examiner,  indicates  that
          the landlord stated in her September 25, 1989 reply to  a  notice






          EJ 410347 RT; EJ 410352 RO
          to submit additional information/evidence that she has the  right
          to challenge the  determination  that  the  subject  premises  is
          subject to rent control; that the building is not rent-controlled 
          by reason of demolition and reconstruction work which took  place
          in 1957 and 1958; that copies of contracts,  invoices,  cancelled
          checks  and  building  plans  were  submitted;  that   the   work
          consisted of essentially reducing the premises to  a  shell  then
          reconstructing with a new roof, waste lines, heating  system  and
          fixtures, new stairs,  fire  escapes,  beams,  lintels,  windows,
          apartment doors, floors, and  insulated  walls;  that  apartments
          were changed; that new ceilings, walls, and flooring,  completely
          new kitchens and baths, ceramic tiles,  appliances  and  fixtures
          were  installed;  that  as  a  result  of  such  alteration   and
          rehabilitation work, two separate old-law tenement buildings were 
          combined into one  Class  A  multiple  dwelling  containing  five
          dwelling units; that a new Certificate of Occupancy was  obtained
          on December 10, 1958; that the scope of  the  work  performed  is
          comparable to new construction; that 9 NYCRR 2200.2(f)8  provides
          that housing accommodations which  were  completed  on  or  after
          February 1, 1947 are not subject to rent control;  and  that  the
          extent and scope of the reconstruction in  the  creation  of  new
          housing units herein exceeds that of a  cited  case  wherein  the
          Court found the new housing created in such  proceeding  (Newport
          Associates, Inc. v. Leventhal, 50 A.D. 2d 741, 376 N.Y.S. 2d 741) 
          to be exempt from rent control.

          The  examiner's  notes  indicate  that  the  landlord's  argument
          regarding exemption  pursuant  to  9  NYCRR  2200.2(f)8  was  not
          considered on the basis of the belief that the only issue  to  be
          determined on remand was the rental amount.

          Jurisdictional issues, however, may be raised at any time  during
          the course of an administrative proceeding.  Prior to the instant 
          remand, the only jurisdictional matter raised  and  resolved  was
          whether the subject apartment  was  owner-occupancy  decontrolled
          pursuant to 9  NYCRR  2200.2(f)11.   The  issue  of  whether  the
          subject apartment was exempt under 9 NYCRR 2200.2(f)8 should have 
          been considered on the merits by the District Rent  Administrator
          on remand.

          The Commissioner is of the opinion that in view of the foregoing, 
          this  proceeding  should  be  remanded  to  the   District   Rent
          Administrator for a determination of said  jurisdictional  issue.
          If it is determined that the  subject  apartment  is  subject  to
          rent-control,  the  District  Rent  Administrator   should   also
          establish the maximum rent for the apartment.  The District  Rent
          Administrator's order should include a discussion  of  the  basis
          for setting the rent at  a  particular  level.   Such  discussion
          should include a listing of the comparable apartments  and  their
          rents found valid for use in the  comparability  study,  and  any
          other factors bearing on the setting of rent.

          THEREFORE, in accordance with the  provisions  of  the  Rent  and
          Eviction Regulations for New York City, it is

          ORDERED, that this administrative appeal be, and the same  hereby
          is, granted to the extent of remanding  this  proceeding  to  the
          District Rent Administrator for further processing in  accordance
          with this order and opinion.  The order and determination of  the






          EJ 410347 RT; EJ 410352 RO
          District Rent Administrator remains  in  full  force  and  effect
          until a new order is issued upon remand.

          ISSUED:
                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
                                          
    

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