EK 210233-RT;  EK210251-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
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW
          APPEALS OF                              DOCKET NOS.:   
                                                  EK 210233-RT             
            RUTH AND IRVING TEITELL, tenants      EK 210251-RO        
                         and       
            LEFRAK CORPORATION,       owners      RENT ADMINISTRATOR'S
                                                  DOCKET NO.:
                                  PETITIONERS     BE 210125-R         
          ----------------------------------x


                 ORDER AND OPINION GRANTING THE OWNER'S AND DENYING
                  THE TENANT'S PETITIONS FOR ADMINISTRATIVE REVIEW         


          On November 15, 1990, the above-named petitioner-tenants filed  a
          Petition for Administrative Review against  an  order  issued  on
          November 9, 1990  by  a  Rent  Administrator  concerning  housing
          accommodations, known as Apartment 3-E at 2625 East 13th  Street,
          Brooklyn, New York, wherein  the  Rent  Administrator  determined
          that the tenant had been overcharged in  the  amount  of  $73.14,
          including interest and excess security.

          On November 19, 1990, the above-named  petitioner-owner  filed  a
          Petition for Administrative Review against the  same  administra-
          tive order.

          The issue in this appeal is whether the  District  Rent  Adminis-
          trator's order was warranted.

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law and Sections 2528.2 and 2528.3 of  the  current
          Rent Stabilization Code 

          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 tenants on April 23, 1987.

          The tenants took occupancy pursuant to a three  year  lease  com-
          mencing November 1, 1972, and expiring October  31,  1975,  at  a
          monthly rent of $ 250.00.  The complaint  also  stated  that  the
          rent on March 31, 1980 was $ 325.08.







          EK 210233-RT;  EK210251-RO
          The owner was served with a copy of the  complaint  and  was  di-
          rected to submit a complete rent  history  from  the  base  date,
          including copies of all leases.  The  owner  complied  with  this
          request.

          In Order No. BE 210125-R issued on November 9, 1990, the District 
          Rent Administrator determined that the initial  legal  registered
          rent of $400.27 had been lawfully established since  the  tenants
          had not filed a challenge of  the  amount  in  a  timely  manner.
          Subsequently an overcharge occurred in the lease term  commencing
          December 1, 1988 in the amount of $2.69 per mont .   Total  over-
          charges, including interest  and  excess  security,  amounted  to
          $73.14.

          In their petition, dated November 15,  1990,  the  tenants  chal-
          lenged the increase of their rent from $301.00 to  $313.20  in  a
          lease executed in 1978.  The tenants also object to a  fuel  sur-
          charge that was never removed from the base rent.

          The owner's petition challenges the  Administrator's  calculation
          of the lawful rent for the lease commencing December 1,  1988  in
          that the Administrator failed to include a permanent MCI increase 
          into the base used to calculate the guidelines increase,  thereby
          mistakenly finding an overcharge.

          The Commissioner is of the opinion  that  the  tenant's  petition
          should be denied and that the owner's petition should be granted.

          Although the tenant challenges  two  rent  increases  which  were
          imposed prior to the initial legal registered  rent,  the  record
          establishes that the subject-premises  were  duly  registered  in
          1984, and that the  complainants'  rent  on  April  1,  1984  was
          adopted as the initial legal registered rent, in accordance  with
          Section 2521.1(c) of the current Rent Stabilization Code. Section 
          2526 further provides that unless the  initial  legal  registered
          rent is successfully challenged by the tenant in occupancy within 
          90 days of the mailing of a copy of  the  registration  statement
          to the tenant, no subsequent challenge may be entertained. 




          Insofar as the complaint alleged no defect in this initial regis 
          tration, the Administrator properly limited review of  the  lease
          history to the period subsequent to it.  Therefore, the  Adminis-
          trator properly determined that the rent increases  occurring  in
          1978 were beyond his scope of review.

          However, the owner's petition correctly bases  its  challenge  to
          the finding of overcharges in the lease commencing on December 1, 
          1988 on the Administrator's failure to include  a  permanent  MCI
          increase in the prior base rent.  Specifically the  enclosed  MCI
          order, under Docket No.  KS  000553-OM,  authorizes  a  permanent
          increase of $2.47, collectible as of November 1, 1986.   Although
          the  Administrator's  rent  calculations  chart   mentions   this
          increase, it ignores it in calculating  the  guidelines  increase
          for the lease commencing December 1, 1988.   This  is  apparently
          because the December 1, 1986 lease  rent  fails  to  include  it.
          However, that lease was actually dated and signed  prior  to  the






          EK 210233-RT;  EK210251-RO
          issuance of the MCI order, on November 19,  1986,  and  it  would
          thus be improper to conclude,  as  apparently  the  Administrator
          did, that the owner  had  waived  the  increase.   In  fact,  the
          owner's timely notice, dated December 9, 1986, informs the tenant 
          of the exact amount of the increase and the effective  date.   By
          adding the $2.47 permanent increase to the December 1, 1986  base
          of $475.56, the adjusted base of $478.03 results in a lawful rent 
          for the December 1, 1988 lease of $521.05, which was  the  amount
          actually collected. As a result, all  overcharges  found  in  the
          order are eliminated.


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

          ORDERED, that the tenant's petition be, and the same  hereby  is,
          denied, that the owner's petition be, and  the  same  hereby  is,
          granted and that the Rent Administrator's order be, and the  same
          hereby is, revoked.


          ISSUED:



                                                                           
                                                ELLIOT SANDER
                                                Deputy Commissioner


                                          
    

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