Docket No. EF 220212-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
          APPEAL OF                               DOCKET NOS. EF 220212-RO &  
                                                              FG 220278-RO

                                                  DISTRICT RENT
          Saul Perlstein                          ADMINISTRATOR'S DOCKET
                                                  NOS. DE 220014-AD &  
                                                       FC 220135-R
                                  PETITIONER
          ------------------------------------X


            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
              IN DOCKET NO. EF 220212-RO & TERMINATING PROCEEDING UNDER
                               DOCKET NO. FG 220278-RO


              On June 25, 1990, the above-named owner filed a petition for 
          administrative review of an order issued June 14, 1990 by the Rent 
          Administrator, concerning the housing accommodation known as 
          Apartment 2nd Floor front, 1353 41st Street, Brooklyn, New York, 
          wherein the Rent Administrator determined that the landlord's 
          report of statutory Decontrol is void.  On July 25, 1991, the 
          above-named owner timely filed a petition for administrative review 
          of an order issued by the Administrator on June 14, 1991, wherein 
          the Administrator determined that the subject apartment's maximum 
          collectible rent (MCR), effective November 27, 1968, was $58.93.

              In an order issued on February 28, 1992, under Docket No. 
          FG 220278-RO, the Commissioner granted the landlord's petition in 
          part, determining that the landlord did not file a petition of the 
          Administrator's order, issued on June 14, 1990, which voided the 
          "Landlord's Report of Statutory Decontrol," and that, the 
          aforementioned order (District Rent Administrator's Docket No. 
          DE 220014-AD) is a final determination and cannot be collaterally 
          attacked.  The Commissioner further determined that, based upon the 
          record, the subject building was owned by relatives of one of the 
          subject tenants; that since 1968 no landlord had applied for any 
          type of rent increase for the subject apartment, until the 
          petitioner-landlord  acquired ownership; that for a time the 
          subject tenant was a part owner of the subject premises, and that 
          since 1954 the subject tenant has been paying a monthly rent of 












          Docket No. EF 220212-RO

          $250.00, and not the $58.93 registered rent.  Based on the above- 
          mentioned facts the Commissioner determined that the MCR for the 
          subject apartment is to be modified to $250.00 per month, effective 
          November 27, 1968 through June 14, 1991 (the issuance date of the 
          Administrator's order, under Docket No. FC 220135-R), pursuant to 
          Section 2202.7 of the City Rent and Eviction Regulations.

              In a letter to the rent agency, dated March 17, 1992, the 
          subject owner requested reconsideration of the order and opinion 
          issued by the Commissioner on February 28, 1992, based upon an 
          "irregularity in a vital matter," pursuant to Section 2529.9 of the 
          Rent Stabilization Code.  The landlord points out that the 
          aforementioned Commissioner's order, under Docket No. FG 220278-RO, 
          "denied the owner's right to challenge the alleged rent control 
          status of the tenant based upon the owner's alleged failure to 
          appeal a prior order voiding the Landlord's  Report of Statutory 
          Decontrol which was issued on June 14, 1990, under docket number DE 
          220014-AD...  In fact said order was timely appealed and such 
          appeal is still pending under docket number EF 220212-RO."

              On April 10, 1992 the rent agency issued an order granting the 
          owner's request for reconsideration and reopening of the 
          Administrative Review Docket No. FG 220278-RO, as the Commissioner 
          in the above-mentioned order, "erroneously stated that the 
          Division's records showed that no appeal had been taken from the 
          Administrator's order of June 14, 1990."  The Commissioner's order, 
          dated April 10, 1992, also determined that Administrative Review 
          Docket No. FG 220278-RO should be consolidated with Administrative 
          Review Docket No. EF 220212-RO.

              Pursuant to the Commissioner's order, dated April 10, 1992, and 
          since the petitions involve common questions of law and fact the 
          Commissioner is consolidating the two aforementioned Administrative 
          Review docket numbers for disposition herein.

              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.

              The proceeding under Docket No. DE 220014-AD was initiated by 
          the tenants' letter to the rent agency, dated May 9, 1989, 
          requesting that the Division of Housing and Community Renewal 
          (D.H.C.R.), determine the rental status of their apartment.  The 
          tenants assert that they have resided in the subject apartment 
          continuously since 1953, and that their apartment is rent 
          controlled, but they have received a "Landlord's Report of 
          Statutory Decontrol," under Docket No. CF 220286-SD.

              Attached to the letter is a non-notarized affidavit signed by 
          the subject tenants, dated May 9, 1989, stating that they have 
          resided in the subject apartment since 1953; that they believe 
          their apartment is rent controlled, and that the subject owner is 






          Docket No. EF 220212-RO

          attempting to double the rent.

              Also attached to the letter is a copy of the aforementioned 
          report of statutory decontrol, dated December 21, 1984.

              In a letter to the rent agency, dated May 25, 1989, the tenants 
          requested that the D.H.C.R. initiate a "Section 36 proceeding" (the 
          predecessor of Section 2202.22 of the City Rent and Eviction 
          Regulations) to determine the rental status of the subject 
          apartment.

              On August 2, 1989, D.H.C.R. mailed to the parties in this 
          proceeding a "Notice of Commencement of Administrative Proceeding," 
          which stated that the Administrator was proposing to void the 
          aforementioned report of statutory decontrol, filed under Docket 
          No. CF 220286-SD, and that the parties had twenty days from the 
          above-mentioned date to submit evidence to substantiate their 
          respective claims.

              The landlord's response, dated August 9, 1989, asserted that he 
          purchased the subject building sometime in May, 1989, and that the 
          prior landlord stated that all of the apartments were stabilized; 
          that the subject tenant is his aunt (the aunt of the prior 
          landlord), and that at one time his aunt (the subject tenant,Jean 
          DePaola) had been a part owner in the subject building.  The 
          subject landlord alleged that an owner residing in an apartment 
          "automatically decontrols" that apartment.

              The tenants' answer, dated August 22, 1989 alleged, among other 
          things, that there were two tenants who have continuously resided 
          in the subject apartment since 1953; that one of the tenants never 
          was an owner of the building, and  therefore, that tenant is still 
          subject to the rent control laws; that the "Landlord's Report of 
          Statutory Decontrol" falsely stated that the subject apartment was 
          decontrolled due to a "vacancy on or after June 30, 1971," and that 
          the other tenant in the subject apartment"  denies being the owner 
          of the building and denies ever receiving a deed to the premises."

              On December 21, 1989, the Administrator mailed a notice to the 
          landlord requesting that he submit to the rent agency a copy of the 
          deed that was transferred to the aforementioned subject tenant 
          "which indicates the property with the address,the metes and bounds 
          and all concerned descriptions of the property." 

              On January 16, 1990, the landlord submitted to the rent agency 
          a Certificate of Title which listed the subject building's address, 
          a description of the subject building's boundaries, and a 
          certification by the  "Commonwealth Land Title Insurance Company" 
          that the subject building is being conveyed to the petitioner-owner 
          by the co-executors of the estate of Vincent J. Madorma (the 
          subject tenant's brother), who obtained title to the subject 
          building through a deed which included the signature of the 












          Docket No. EF 220212-RO

          aforementioned subject tenant.

              On January 24, 1990, the Administrator mailed to the tenants a 
          notice requesting that they verify the landlord's aforementioned 
          assertion of one of the tenants being "part owner" of the subject 
          building.

              The tenants' response to the Administrator's notice, dated 
          January 26, 1990, stated that Jean DePaola:

               [B]ecame a part owner of the subject building upon the 
               death of a prior owner.  She then transferred her 
               ownership to her brother.  She had resided in the 
               building as a tenant many years before she became the 
               owner and many years after she gave her interest to her 
               brother.

              The tenants' further stated that Jean DePaola "was an owner by 
          operation of the law, and her husband... was never an owner of the 
          building."

              On June 14, 1990, the Administrator issued the order under 
          review (Docket No. DE 220014-AD) which voided the "Landlord's 
          Report of Statutory Decontrol filed under docket number CF 220286- 
          SD."

              The owner's petition, filed under Administrative Review Docket 
          No. EF 220212-RO, alleges that the subject apartment should be 
          decontrolled "as the tenants as co-owners, sold their ownership 
          rights on 1/25/89, thus automatically relinquishing their rent 
          controlled rights.  This is undisputed."

              To the petition the owner attaches an "Application By Owner To 
          Determine Whether Building/Apartment Is Exempt From The Emergency 
          Tenant Protection Act Or The Rent Stabilization Law," dated June 
          19, 1990, which alleges that the subject building should be exempt 
          from rent regulations, as the building has fewer than six 
          apartments.

              On July 31, 1990, the subject tenants, submitted  their answer 
          to the landlord's petition.  The answer is only signed by Rudolph 
          DePaola, the husband of the aforementioned Jean DePaola.  He 
          alleges that he continuously resided in the subject apartment since 
          1953; that he never was an owner of the subject building; that he 
          never  signed a deed pertaining to the subject building, and that 
          the subject apartment is rent controlled.
              The subject tenant, Rudolph DePaola, filed an overcharge 
          complaint with D.H.C.R., dated March 7, 1991, under Docket No. FC 
          220135-R.  The tenant alleged that on June 4, 1989 the new landlord 
          increased the monthly rent from $250.00 to $500.00.

              In a letter to the rent agency, dated September 5, 1991, the 






          Docket No. EF 220212-RO

          subject landlord asserts the following:

              1)  That the subject building (a four family house) was 
          purchased approximately thirty five years ago by Vincent and Mary 
          Madorma;

              2)  That Vincent Madorma died in 1976, and left the subject 
          building to his wife, Mary, and his son Dominick;

              3)  That Dominick Madorma had six siblings, including Jean 
          Depaola (one of the subject tenants) who still lives in the 
          building; 

              4)  That Mary Madorma died in 1982, and left her one-half 
          interest in the subject building to her children;

              5)  That approximately two years later the aforementioned 
          siblings (including one of the subject tenants) sold their title to 
          their brother Vincent Madorma, and

              6)  That on the same day title in the subject building was 
          transferred to Vincent Madorma, Vincent's son Dominick filed a 
          "Landlord's Report of Statutory Decontrol," dated  December 21, 
          1984, with D.H.C.R.

              To the above-mentioned letter the landlord attaches a deed, 
          dated December 21, 1984 (the same date that the report of statutory 
          decontrol was filed with the rent agency), which transfers title to 
          the subject building from the aforementioned siblings (which 
          includes one of the subject tenants) to Vincent Madorma.  The 
          subject tenant, Jean DePaola, signed the above-mentioned deed, 
          along with her other sibllings, above the words "as residuary 
          legatees under the Last Will and Testament of Mary Madorma, 
          deceased."

              On May 12, 1992, the subject landlord submitted a letter to the 
          rent agency, which was in response to the Commissioner's order, 
          dated April 10, 1992, which granted the landlord's request for 
          reconsideration.  The landlord states that: 

               The owner seeks to bring to the agency's attention that 
               the subject premises contains four (4) apartments, 
               therefore, it is not subject to stabilization pursuant to 
               Section 2520.11 of the 1987 Rent Stabilization Code 
               (RSC).  In order for a building to be subject to 
               stabilization it must have six (6) or more units.

                   Since it is the owner's position that Ms. DaPaola 
               lost her rent controlled status when she became an owner 
               of the subject premises, then once the apartment was 
               decontrolled it was no longer subject to any form of 
               regulation whatsoever. 












          Docket No. EF 220212-RO


              To the letter the landlord attaches a copy of a page from the 
          "contract of sale" between the subject landlord and the prior 
          owner, which alleges that the subject apartment is decontrolled.

              The Commissioner is of the opinion that the landlord's petition 
          (Docket No. EF 220212-RO) should be granted.

              It is undisputed by both parties to this proceeding that Jean 
          DePaola was a part owner of the subject building.  As the record 
          reflects, Jean DePaola inherited a 1/12th interest in the subject 
          building, on December 3, 1982.  She maintained her part owner  
          status in the subject building, until December 21, 1984.

              The Commissioner notes that it is a long established policy 
          followed by the rent agency and the predecessor agency of the 
          Division of Housing and Community Renewal in administrating the 
          various statutes providing for the regulation of housing that, as 
          in this proceeding, when an owner-occupant sells their title in the 
          building, while still continuing to occupy their apartment, it is 
          the functional equivalent of their vacating that apartment.

              Accordingly, the Commissioner finds that the subject apartment 
          has been decontrolled.  The Commissioner further finds that as the 
          subject building contains fewer than six units, it is not subject 
          to rent regulations, pursuant to Section 2520.11 (d) of the Rent 
          Stabilization Code. 

              Accordingly, the Commissioner finds that the Administrator's 
          order, under Docket No. DE 220014-AD, is hereby revoked.

              The Commissioner finds that Rudolph DePaola's assertion that 
          the subject apartment should not be decontroled, as he was never an 
          owner of the subject building is without merit.  The aforementioned 
          Section 2200.2 (f) (11) of the New York City Rent and Eviction 
          Regulations, does not require that all of the occupants of the 
          subject apartment had to be an owner, rather, it is sufficient for 
          the above-mentioned section to apply, that one occupant in the 
          subject apartment was an owner.

              The Commissioner finds that as the subject apartment is no 
          longer subject to rent regulations the rent agency does not have 
          jurisdiction to determine the rent of the subject apartment.

              Accordingly, the Commissioner finds that the Administrator's 
          order, under Docket No. FC 220135-R, which determined the MCR for 
          the subject apartment, should be revoked.  The Commissioner further 
          finds that as the rent agency does not have jurisdiction to 
          determine the subject apartment's rent, there is no issue for the 
          Commissioner to decide in the landlord's petition, under Docket No. 
          FG 220278-RO, and therefore, the above-mentioned proceeding should 
          be terminated as moot.






          Docket No. EF 220212-RO


              The tenants' assertion that their apartment should be subject 
          to the rent control laws because the landlord's report of statutory 
          decontrol, dated December 21, 1984, incorrectly stated that the 
          subject apartment was vacated on or after June 30, 1971, is without 
          merit.  The subject apartment was decontrolled due to Jean DePaola 
          residing in the subject apartment as a part owner of the subject 
          building.  Accordingly, the Commissioner finds that the incorrect 
          statement on the aforementioned statutory decontrol report was 
          harmless error as to the subject tenants, and may not be used as a 
          sword by the tenants in denying the petitioner-landlord his right 
          to a decontrolled building in this proceeding.

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

              ORDERED, that the landlord's petition, under Docket No. 
          EF 220212-RO be, and the same hereby is, granted, and that the 
          order issued by the Rent Administrator on June 14, 1990, under 
          Docket No. DE 220014-AD, be, and the same hereby is, revoked; and 
          it is

              FURTHER ORDERED, that the landlord's petition, under Docket No. 
          FG 220278-RO be, and the same hereby is, terminated, and that the 
          order issued by the Rent Administrator on June 14, 1991, under 
          Docket No. FC 220135-R, be, and the same hereby is, revoked; and it 
          is

              FURTHER ORDERED, that the tenants may repay any arrears in rent 
          arising as a result of this order in six equal monthly installments 
          commencing with the next rent payment date.

          ISSUED:



                                                                           
                                             Joseph A. D'Agosta
                                             Acting Deputy Commissioner   






    

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