EK410099RO; EJ410498RT
                             STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEALS OF                             DOCKET NO. EK410099RO; 

           A. Gumowitz Real Estate, Owner,:  DISTRICT RENT OFFICE
           and Seth Miller and Jennifer      DOCKET NO. EH410035RP
           Rowen, Tenant,                    
                            PETITIONERS   : 


      On November 14, 1990, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on October 15, 1990, 
      by the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 235 West 76th Street, 
      New York, New York, Apartment No. 15A, wherein the Rent Administrator 
      determined the fair market rent pursuant to the special fair market rent 
      guideline promulgated by the New York City Rent Guidelines Board for use 
      in calculating fair market rent appeals.

      On October 25, 1990 the tenant filed a Petition for Administrative 
      Review against the same order, under Docket No. EJ410498RT.  Both 
      appeals are being determined in the instant order.

      These administrative appeals are being determined pursuant to the 
      provisions of Sections 2522.3, 2522.4, et al., of the Rent Stabilization 

      The issue herein is whether the Rent Administrator's order was 

      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 appeals.  

      The proceeding was originally commenced with the filing by the tenant of 
      an overcharge complaint form on November 19, 1987 contending, among 
      other things, that the tenant was being charged more than the fair 
      market rent.  

      The tenant took occupancy on September 15, 1987 pursuant to a lease 
      commencing on September 1, 1987 and terminating on August 31, 1989 at a 

          EK410099RO; EJ410498RT

      monthly rent of $3500.00.  In support of his contentions the tenant 
      submitted copies of rent and security checks, Forms RR-1 and DC-2A, and 
      his initial lease.

      In response to the tenant's complaint, the owner contended, among other 
      things, that since the tenant was the first occupant of the subject 
      housing accommodation after it was vacancy decontrolled and did not file 
      a fair market rent appeal within ninety days of service of Form DC-2A,  
      the tenant was therefore time-barred from such filing.  The owner 
      further stated that it had not been served with the appropriate notice 
      and/or answer forms advising it of the procedure to follow to respond to 
      a fair market rent appeal, nor was it provided with the opportunity to 
      submit comparability data which it would be allowed to submit in the 
      event the proceeding was to be considered a fair market rent appeal.  
      The owner included copies of the relevant lease for the subject housing 
      accommodation; proof of service of the Form DC-2A, which had been 
      returned "Unclaimed" by the Post office; a signed receipt from the 
      tenants for a copy of same; and copies of Form RR-1, apartment 
      registration, and Form RA-42V, Owner's Report of Vacancy Decontrol, and 
      Form DC-2A.  The owner also submitted copies of paid bills and cancelled 
      checks for the following items:

      Kitchen cabinets and counters                $2,165.00
      Plumbing installation of pipes and fixtures  $1,293.58
      Refrigerator                                 $  952.00
      Electrical rewiring and outlets              $1,285.00 and $1,320.00
      Tile in three bathrooms                      $3,800.00
      3 Toilets                                    $  243.56
      Floor scraping                               $  974.25
      Painting                                     $1,514.99
      Gas range                                    $  357.00
      Sink vanity and medicine cabinets            $  736.10
      1 cabinet                                    $  108.25

      On January 30, 1990, under Docket No. BK420583-R, the Administrator 
      established that the apartment became subject to the Rent Stabilization 
      Law by virtue of the first stabilized tenancy commencing on September 1, 
      1987 at a monthly rent of $3,500.00 and that the statutory criteria for 
      processing a Fair Market Rent appeal had been met.  Based on the owner's 
      failure to submit comparability data, the Administrator determined the 
      tenant's fair market rent solely pursuant to Special Guidelines Order 
      No. 18,  established the fair market rent at $802.72 per month effective 
      September 1, 1987, which included an allowance of $319.96 for apartment 
      improvements, and ordered a refund in the amount of $85,315.00.

      On February 27, 1990 the owner filed a petition for administrative 
      review and requested reconsideration of that order, contending that 
      despite its request, at no time was the owner provided with the 
      appropriate response forms for a fair market rent appeal.  With its 
      petition the owner submitted rental data for the subject A line, the E 
      line and the D line of apartments in the subject building and for market 

          EK410099RO; EJ410498RT

      rents in other buildings.

      On May 29, 1990 the Administrator reopened the proceeding and served the 
      owner with a fair market rent appeal package to afford it due process.  
      On June 20, 1990, the owner submitted the following materials, among 
      other things, pursuant to DHCR's service of the fair market rent appeal 
      package: an owner's report of Vacancy Decontrol and a photocopy of form 
      DC-2A dated and initialled by the tenant for Apartment 11A, and an 
      Owner's Report of Vacancy Decontrol with a signed certified mail return 
      receipt which is undated and has no postal stamp for Apartment 4E.  
      Together with these documents, the owner resubmitted invoices and checks 
      for the vacancy improvements performed on the subject apartment.

      On August 23, 1990, under Docket No.EB420396-RO, the Commissioner found 
      that examination of the record confirmed the owner's contention that it 
      had not been provided with a fair market rent appeal package and the 
      opportunity to submit comparability data, despite several requests, and 
      remanded the matter to the Administrator for further consideration.

      On August 24, 1990 the Division sent a Request for Additional 
      Information/Evidence to the owner, affording the owner an additional 
      opportunity to supplement its submission.  Specifically, the owner was 
      requested to provide adequate proof of service of Form DC-2 or RR-1 upon 
      the first stabilized tenant of Apartments 11A and 4E, in order to have 
      those rents considered for comparability, including a date-stamped 
      receipt for certified mail corresponding to the article number on the 
      green return receipt previously submitted for Apartment 4E.

      In reply to the owner's submission, the tenant, among other things, 
      objected to the amount of $3,800.00 which was paid to the superintendent 
      for tile work in three bathrooms.  The tenant stated that it is improper 
      to include the services of a building employee in the charges for 
      apartment improvements.

      The tenant's response was served on the owner.  On October 11, 1990, the 
      owner submitted an initial apartment registration form with proof of 
      service upon the tenant of Apartment PH-1 for comparability purposes.  
      The owner further contended that the tiling work done by the 
      superintendent was compensable as a vacancy improvement, since it was 
      billed and paid for separately from his customary work, and was not done 
      as part of his regular duties.  The owner submitted an affidavit from 
      the superintendent attesting to his expertise in tile setting and 
      stating that he was paid for the work in the subject apartment 
      separately from his salary.  It is noted that the bill from the 
      superintendent which the owner submitted listed the subject building as 
      his business address.  The owner's October 11, 1990 submission was never 
      forwarded to the file for review by the Administrator, and hence is 
      being considered on appeal, since it clearly was stamped "Received" by 
      the DHCR on October 11, 1990.  

      On October 15, 1990, under Docket No. EH410035-RP, the Administrator 
      revoked the order of January 30, 1990, under Docket No. BK420583-R, and 

          EK410099RO; EJ410498RT

      found that pursuant to Special Guidelines Order Number 18, the 1986 
      Maximum Base Rent of $863.50 and $12.60 fuel cost adjustment were to be 
      adjusted by an additional 20% ($863.50 + $12.60 x 1.20= $1,051.32).

      Pursuant to Section 2522.4(a)(1) of the Code, the Administrator 
      determined that the owner was entitled to a monthly rental increase in 
      the amount of $211.51 calculated on the basis of 1/40th of allowable 
      costs of $8,460.49, effective September 1, 1987.  This resulted in a 
      fair market rent of $1,262.83 ($1,051.32 + $211.51 = $1,262.83) 
      effective September 1, 1987. 

      Concerning bills for painting and floor scraping ($2,489.24) and tile 
      work performed by the superintendent ($3,800.00), the administrator 
      found that an owner was not entitled to an increase pursuant to Section 
      2522.4(a)(1) of the Code for work which constitutes normal decorating or 
      maintenance, for any painting prior to a new tenant's occupancy or for 
      work performed by the building's employees.

      The Administrator further found that apartments 8A, 11A and 4E were 
      decontrolled within the required time frame.  However, Apartment 8A, 
      decontrolled in November 1985, had a fair market rent appeal pending and 
      could not be considered a final rent for use in a comparability study.  
      Additionally, the Administrator determined that Apartment 4E, 
      decontrolled in October 1986, and Apartment 11A, decontrolled in January 
      1988, could not be considered for comparability purposes because the 
      owner failed to submit either a DC-2 or RR-1 with contemporary proof of 
      service for either housing accommodation.  Additionally, the 
      Administrator determined that the apartments in neighboring buildings 
      cited by the owner failed to meet the requirements of the Rent 
      Stabilization Code.

      The Rent Administrator adjusted the initial legal regulated rent by 
      establishing a fair market rent of $1,262.83 effective September 1, 
      1987, the commencement date of the initial rent stabilized lease.  In 
      addition, the Rent Administrator determined that the tenant had paid 
      excess rent of $68,539.20 through January 31, 1990, and directed the 
      owner to refund such excess rent to the tenant.

      In its petition, the owner makes the following allegations: 
         -  that the DHCR should take administrative notice of its own 
      records, which would indicate lawful rents for housing accommodations in 
      other buildings submitted by the owner for comparability purposes as 
      "market rents";
         -  that the owner submitted adequate comparability data for the A,E 
      and D lines of apartments in the subject building and it is both 
      arbitrary and capricious for the DHCR to exclude apartments which were 
      rented outside the permissible time limits established by DHCR;

         -  that the fair market rent appeal filed by the tenant in Apartment 
      8A was filed for the sole purpose of assisting the tenant in Apartment 
      15A (the complainant herein) with the express intention of having the 

          EK410099RO; EJ410498RT

      rent for Apartment 8A not considered as a comparable rental; that such 
      appeal was untimely, having been filed several years after the tenant of 
      that apartment admittedly received the initial apartment registration 
      form; and that said appeal was withdrawn by the tenant pursuant to an 
      agreement wherein the tenant was represented by counsel.  The owner 
      submitted a copy of this agreement and a withdrawal letter from the 
      tenant.  Based thereon, the owner asserts that the initial rent of that 
      apartment becomes the legal stabilized rent and should be allowed for 
      purposes of comparability;

         - that Apartments 11A, 4E, and PH-1 are appropriate rentals for use 
      as comparables;

         - that the DHCR made no further inquiry regarding the documentation 
      submitted for Apartment 4E;

         -  that it is wrong for the DHCR to disallow, as a vacancy 
      improvement, work done by an employee of the owner, when the work done 
      has nothing to do with the employee's obligations and job description;

         -  that the DHCR failed to include the cost of an approved major 
      capital improvement in the tenant's rent;

         -  that the Administrator miscalculated the 1986 MBR and fuel cost 
      adjustment; and

         -  that the Administrator failed to consider the owner's timely 
      October 9, 1990 filing, submitted in response to a DHCR request, thus 
      denying the owner due process of law.   

      In response to the owner's petition, the tenant alleges, among other 
      things, that the buildings submitted as comparables by the owner are all 
      of a much higher calibre than the subject building; that the owner did 
      not meet the DHCR's requirements for documentation for the material 
      submitted; that with respect to the improvements provided by the 
      building superintendent, the owner's position is groundless, since, 
      among other things, work done by building employees is automatically 
      excluded; and that the bathrooms were not retiled, but merely repaired.

      In his petition for administrative review, Docket No. EJ410498RT, the 
      tenant alleges that the owner did not file a timely petition for 
      administrative review of the order issued on January 30, 1990, under 
      Docket No. BK420583-R.  The tenant further alleges that the owner's 
      claim not to have copies of the correct response forms for fair market 
      rent appeals is spurious; that it is a tactic to delay resolution of the 
      proceedings.  The tenant requests reinstatement of the order of January 
      30, 1990.

      The Commissioner is of the opinion that the owner's petition should be 
      granted in part, that the tenant's petition should be denied, and that 
      the order of the Administrator should be modified.

          EK410099RO; EJ410498RT

      Pursuant to Section 2522.3(e) and (f) of the Rent Stabilization Code, 
      effective May 1,1987, for fair market rent appeals filed after April 1, 
      1984, comparability will be determined based on the following:

      (e)  (1) Legal regulated rents, for which the time to file a Fair 
           Market Rent Appeal has expired and no Fair Market Rent Appeal 
           is then pending, or the Fair Market Rent Appeal has been 
           finally determined, charged pursuant to a lease commencing 
           within a four year period prior to, or a one year period 
           subsequent to, the commencement date of the initial lease for 
           the housing accommodation involved; and 

           (2) At the owner's option, market rents in effect for other 
           comparable housing accommodations on the date of the initial 
           lease for the housing accommodation involved as submitted by 
           the owner. 

      (f)  Where the rents of the comparable housing accommodations being 
           considered are legal regulated rents, for which the time to 
           file a Fair Market Rent Appeal has expired, and such rents 
           are charged pursuant to a lease ending more than 1 year prior 
           to the commencement date of the initial lease for the subject 
           housing accommodation, such rents shall be updated by 
           guidelines increases for 1 year renewal leases, commencing 
           with the expiration of the initial lease for the comparable 
           housing accommodations to a date within 12 months prior to the 
           renting of the housing accommodations involved.

      The owner objects to the Administrator's exclusion of all three proposed 
      comparables in the same building, #8A, #4E, and #11A.  Section 2522.3(e) 
      of the Rent Stabilization Code, cited above, states the time limitations 
      for the initial stabilized rental of a comparable apartment.  With 
      regard to Apartment #4E, the record indicates that the owner submitted 
      to the Administrator a Notice of Vacancy Decontrol for that apartment 
      and a copy of a signed certified mail return receipt which has no postal 
      stamp and is undated.  (The owner also states that an affidavit from the 
      managing agent attesting to service of the notice was submitted.)  
      Regarding the owner's assertion that the Administrator failed to send a 
      follow-up notice to the owner regarding the insufficiency of the 
      documentation for Apartment 4E, it is noted that the Administrator did 
      send such notice on August 24, 1990.  The Commissioner finds that the 
      owner's documentation, particularly the undated return receipt with no 
      postmark, is inadequate to prove service of the DC-2A notice on the 
      tenant of Apartment 4E, and therefore, that apartment was properly not 
      used as a comparable.  With regard to Apartment #11A, the owner 
      submitted a DC-2A notice dated and initialed by the tenant.  The owner 
      contends that this submission documents the tenant's receipt of the DC- 
      2A, notice and accordingly Apartment 11A must be utilized for 
      comparability purposes.  The Commissioner finds that this documentation 
      is inadequate to prove service of the DC-2A notice on the tenant of 
      Apartment 11A since it fails to show that service was made by Certified 
      Mail, as required under the Rent Stabilization Code, and therefore that 

          EK410099RO; EJ410498RT

      that apartment was properly not used as a comparable.  With regard to 
      Apartment #8A, the withdrawal agreement signed by the tenant of that 
      apartment was entered into after the issuance of the Administrator's 
      order in this case and therefore, at the time the owner was asked to 
      submit comparability data, the submission of Apartment 8A as a 
      comparable was improper because of the pending fair market rent appeal.

      With regard to the owner's proposed comparables for apartments in 
      buildings in the same general area, the owner submitted those apartments 
      as market rents under Option B.  However, the owner has indicated that 
      those apartments are rent stabilized; they are, therefore, not 
      appropriate for consideration as market rents.  In addition, the owner 
      failed to submit adequate data for those apartments to be considered as 
      legal regulated rents under Option A.  Although the owner has requested 
      that the comparability study be based on DHCR's registration records, 
      the owner is required to submit the comparability data which the owner 
      wishes to have considered in the comparability study.  Court precedent 
      has held that comparability in fair market rent appeal cases must be 
      based on individualized studies and that where no comparability data is 
      available, the fair market rent may be determined based on the special 
      fair market guidelines alone.  The DHCR is not obligated to search its 
      records for usable comparability data, which might not be available in 
      every case.  If an owner wishes to exercise the option of having the 
      comparability data considered in the determination of the fair market 
      rent, the burden is on the owner to submit such data, including data for 
      complete lines of apartments, leases or other rental documentation, as 
      well as proof of service of initial legal regulated rent notices (DC-2 
      notices) or apartment registration forms, which is not available from 
      DHCR records.  The Commissioner therefore finds that this portion of the 
      owner's petition should be denied.

      With regard to the owner's attempted use of Apartment PH-1 as a 
      comparable housing accommodation, the Commissioner notes that the use of 
      this five-room penthouse apartment is inappropriate.  The Division's 
      position is that in order to be considered comparable, a housing 
      accommodation must be similarly sized with a similar layout to the 
      subject apartment.  Accordingly, even if timely submitted, PH-1, as a 
      five room penthouse apartment, cannot be utilized as a comparable for 
      the six-room housing accommodation that is the subject of this case.

      Regarding the Administrator's disallowance of the work performed by the 
      superintendent, the Commissioner finds that that was error.  The owner 
      has adequately substantiated this expense with a bill and cancelled 
      checks.  The instant case is distinguishable from the preponderance of 
      comparable cases in that the work under consideration was not part of 
      the regular duties of this employee, and his labor caused an expense in 
      addition to his regular salary.  Therefore, an allowance for tile work 
      of $95.00 ($3,800.00  40) will be granted, resulting in a total increase 
      for improvements of $306.51.

      With regard to the owner's assertion that the Administrator improperly 
      applied the Special Guidelines order, the Commissioner finds that the 

          EK410099RO; EJ410498RT

      record supports the Administrator's determination.  The agency's records 
      verify a 1986 MBR of $863.50 (851.86 + $11.64 allowance for heating 
      system modernization under Docket No. 2AL 421610 = $863.50) and a 1987 
      fuel cost adjustment of $12.60.  As the tenant took occupancy in 
      September 1987, the applicable fuel cost adjustment in the instant case 
      was the 1987 fuel cost adjustment.  Accordingly, the MBR and the fuel 
      cost adjustment used by the Administrator were correct.

      The owner is correct in its contention that the DHCR erred in omitting 
      an approved rent increase for major capital improvement.  On February 
      14, 1989, under Docket No. AF30098 OM, an order approving a rent 
      increase for major capital improvement of $23.55 per room per month, 
      effective October 1, 1986 and collectible March 1, 1989, was issued.  
      The Commissioner finds that such increase should be included in the 
      calculation of the fair market rent,  and has been incorporated into the 
      Rent Calculation Chart appended hereto, which is hereby made a part of 
      this order.  The Commissioner notes that the Administrator erroneously 
      calculated excess rent through January 31, 1990, rather than through the 
      month of issuance of his order, i.e., October, 1990.  That error has 
      been corrected in the attached chart.  

      Concerning the tenant's petition for administrative review, the 
      Commissioner finds that the owner's petition for administrative review 
      against the order Docket No. BK420583-R was timely filed and that it was 
      appropriate to remand the proceeding.  The tenant's bare allegations 
      concerning the intentions of the owner are unsupported by the record.  
      Accordingly, the Commissioner is of the opinion that the tenant's 
      petition should be denied.

      The owner is directed to roll back the rent to the lawful stabilized 
      rent consistent with this decision and to refund the excess rent 
      collected by the owner.  The total amount of excess rent is $82,366.32.

      In the event the owner does not take appropriate action to comply within 
      sixty (60) days from the date of issuance of this order, the tenant may 
      credit the excess rent collected by the owner against the next month(s) 
      rent until fully offset.

      The owner is directed to reflect the findings and determinations made in 
      this order on all future registrations filed, citing this order as the 
      basis for the change.  Registration statements already on file, however, 
      should not be amended to reflect the findings and determinations made in 
      this order.  The owner is further directed to adjust subsequent rents to 
      an amount no greater than that determined by this order plus any lawful 

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

      ORDERED, that the owner's petition for administrative review be, and the 
      same hereby is, granted in part, that the tenant's petition for 

          EK410099RO; EJ410498RT

      administrative review be, and the same hereby is, denied, and that the 
      order of the Rent Administrator be, and the same hereby is, modified 
      pursuant to this order and opinion.


                                         JOSEPH A. D'AGOSTA
                                         Deputy Commissioner


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