DOCKET NO.:  EJ420230RO
                              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   :  
     APPEAL OF                                 ADMINISTRATIVE REVIEW
                                           :   DOCKET NO. EJ420230RO
            S & M ENTERPRISES,                 DISTRICT RENT ADMINISTRATOR'S
                                           :   DOCKET NO. DA420012BT
                            PETITIONER                    (BL425184BR)
     --------------------------------------X            


            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

     On October 19, 1990, the above-named landlord filed a timely petition for 
     administrative review of an order issued on July 30, 1990 by a Rent 
     Administrator concerning various housing accommodations in the premises 
     known as 243 East 36th Street, New York, New York.

     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.

     In the order under review herein the Administrator stated that:

               Landlord is barred from getting a 1988-1989 MBR increase 
               because of Harassment findings placed on building in 1985 by 
               Agency Enforcement Bureau and they are still pending.

     The landlord's petition alleges, among other things, that the rent agency 
     issued an order on July 14, 1988, under Docket No. BL425184BR, which granted 
     the establishing of the 1988-1989 maximum base rent (MBR) for the subject 
     building; that the subject tenants filed a challenge to the above-mentioned 
     order; that the subject landlord did not receive a copy of the tenants' 
     challenge, and as a result, the landlord alleges, that it was denied due 
     process; that the Administrator's order contradicted an earlier rent 
     agency's order issued on April 17, 1990, under Docket No. DK422482BR, which 
     granted the subject building's 1990-1991 MBR order of eligibility; that the 
     applicable regulations in the Rent and Eviction Regulations do not condition 
     the granting of an MBR increase on a finding of no harassment; that Section 
     2206.5 of the Rent and Eviction Regulations provides that upon the 
     Administrator's finding of harassment the Administrator may refuse to credit 
     any adjustments increasing rent mandated by Part 2202 of the aforementioned 
     regulations; that the above-mentioned Part 2202 "governs the Adjustments; 
     Determination of Rents and Services" and not the granting of an MBR 
     increase; that "even if a finding of harassment could prevent the granting 
     of an MBR increase such is not mandatory, but discretionary"; that the 
     subject landlord asserts that it is maintaining all required services, and 
     that the Administrator's order under review herein should be revoked.
     After careful consideration, the Commissioner is of the opinion that the 
     landlord's petition should be denied.






          DOCKET NO.:  EJ420230RO


     Section 26-413 b.(3)(a)(iii) of the City Rent and Rehabilitation Law states 
     that the rent agency, when there is a finding of harassment may:


               [R]efuse to credit any adjustments increasing rent 
               mandated by section 26-405 of this chapter and dismiss 
               any applications for an adjustment pursuant to said 
               Section for such time and under such terms and 
               conditions as the rent agency deems necessary to prevent 
               circumvention or evasion of the provisions of this 
               chapter.


     The Commissioner notes that the aforementioned Section 26-405 of the City 
     Rent and Rehabilitation Law contains provisions pertaining to the 
     establishment of maximum rents.  The Commissioner further notes that Part 
     2202 of the Rent and Eviction Regulations, as mentioned in the 
     aforementioned Section 2206.5(a)(3) of the Rent and Eviction Regulations, 
     also contains provisions pertaining to the establishment of maximum rents 
     (i.e., Sections 2202.3(b)(2), 2202.3(f)(2), 2202.3(h), 2202.5(e), 2202.11, 
     and 2202.20(a) of the Rent and Eviction Regulations).  Accordingly, the 
     Commissioner is of the opinion that the Rent and Eviction Regulations do 
     give the Administrator discretion in denying the establishment of an MBR 
     increase when there is an outstanding finding of harassment.

     Furthermore, in the case of Seril v. Division of Housing and Community 
     Renewal, the Appellate Division stated that:


               Because the record herein reveals extant findings of 
               harassment, failure to provide essential services, and 
               a continuous, consistent and uncorrected pattern of 
               'rent impairing violation', we conclude that DHCR did, 
               in fact, have a rational basis for denying the subject 
               applications for the years in question.  DHCR's 
               determinations were, therefore, neither arbitrary and 
               capricious nor did they constitute an abuse of 
               discretion.  Indeed, any one of the three grounds stated 
               above would have sufficed to support DHCR's denials of 
               the MBR applications for the periods in question.


     See Seril v. Division of Housing and Community Renewal, 163 A.D.2d 131, 557 
     N.Y.S.2d 356, 357 (1st Dep't. 1990).

     Accordingly, the Commissioner finds that the Administrator's order denying 
     the establishment of the 1988-1989 MBR should not be disturbed.

     The Commissioner notes that the rent agency's records reflect that the 
     subject building has an outstanding finding of harassment against it since 
     October 30, 1985.  The Commissioner further notes that the subject landlord 
     has not submitted any evidence showing that the rent agency's finding of 
     harassment has been removed for the time period in question.

     Accordingly, the Commissioner finds that it was reasonable for the 
     Administrator to have denied the establishing of the subject building's 
     1988-1989 MBR, as there still is an outstanding finding of harassment.


          DOCKET NO.:  EJ420230RO


     As the Administrator's determination to deny the establishment of 1988-1989 
     MBR was reasonable, due to the outstanding finding of harassment against the 
     subject building, the Commissioner finds that it is not necessary to make a 
     determination as to the other issues raised in the landlord's petition, 
     pertaining to the denial of the 1988-1989 MBR increase.

     The Commissioner notes that the aforementioned tenants' challenge to the 
     establishment of the 1988-1989 MBR was not an adversary proceeding between 
     the landlord and the tenants, but was between the rent agency and the 
     tenants, and that the rent agency was not required to serve a copy of the 
     tenants' challenge on the landlord.

     As the landlord does not allege that it did not have notice of the rent 
     agency's finding of harassment against the subject building, the 
     Commissioner finds that the landlord was not denied due process in this 
     proceeding.

     The Commissioner notes that the rent agency's order issued on April 17, 1990 
     under Docket No. DK422482BR was revoked by a subsequent order issued on 
     January 11, 1991 under Docket No. EE420029BT, which revoked the 1990-1991 
     MBR order of eligibility for the subject building, based on the fact that 
     the subject building has an outstanding finding of harassment against it.

     Accordingly, the Commissioner finds that the subject landlord's petition 
     should be denied.

     THEREFORE, in accordance with the City Rent and Rehabilitation Law and the 
     Rent and Eviction Regulations, it is  

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

     ISSUED:



                                                                               
                                                      JOSEPH D'AGOSTA
                                                 Acting Deputy Commissioner 




    

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