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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. FA 410268 RO
: DRO DOCKET NO. 41408
54 BARROW STREET TENANT: BRAD BEALMEAR
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On January 14, 1991, the above-named petitioner-owner timely
refiled a Petition for Administrative Review against an order issued
on April 26, 1989, and subsequently amended by the Rent
Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the housing accommodations known as 54 Barrow Street, New
York, New York, Apartment No. 5D, 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 determining fair market rent
appeals.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2521.1 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order
was warranted.
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
fair market rent appeal by the tenant in December 1984. The
tenant took occupancy pursuant to a lease commencing August 1,
1984 at a monthly rent of $1,100.00.
The owner was served with a copy of the tenant's fair market
rent appeal, afforded an opportunity to submit rental data for
comparable apartments, and directed to submit rent records for the
subject apartment from June 30, 1974 or the date the subject
apartment first became subject to rent stabilization, whichever is
later.
In a response dated March 9, 1987, the owner "54 Barrow
Street Associates, c/o A. J. Clarke Mgmt." stated in substance
that the tenant herein is the first rent stabilized tenant, that
the current owner is "54 Barrow Street Associates"; that said
current owner first purchased the subject premises on October 31,
FA 410268 RO
1984 and did not receive rent records prior to its purchase of the
subject premises. In support of such contention, the owner
submitted a copy of a deed dated October 31, 1984 showing that "54
Barrow Street Associates, c/o A. J. Clarke" purchased the subject
premises from "54 Barrow Inc.". The owner did not submit any
comparability data.
The tenant's lease renewal effective August 1, 1986 listed A.
J. Clarke Management Corp. as the owner's agent, and the tenant's
subsequent renewal leases effective August 1, 1987, August 1,
1988, and August 1, 1989 listed Jonis Realty Mgmt. Corp., 98
Cutter Mill Road, Great Neck, New York, as the owner's agent. The
April 1, 1984 registration of the subject premises with the DHCR
listed the owner as "54 Barrow Street Associates, c/ Jonis Realty
Mgmt. Corp., 98 Cutter Mill Road, Great Neck, New York.
In the amended order under appeal herein, the Rent
Administrator adjusted the initial legal regulated rent by
establishing a fair market rent of $308.41 effective August 1,
1984, found that the tenant had paid excess rent including excess
security totalling $55,546.50 through December 31, 1989, and
directed the owner "54 Barrow Street Realty Associates, c/o Jonis
Realty Mgmt. Co." to refund the excess rent to the tenant. Since
the owner did not submit comparability data, the fair market rent
was determined solely pursuant to Special Guidelines Order Number
15 - the 1984 Maximum Base Rent of $235.31 adjusted by an
additional 20% plus a fuel cost adjustment to get a fair market
rent of $308.41.
On January 30, 1990, a petition was filed by "54 Barrow
Street, c/o Jonis Realty Mgmt. Corp.". Such petition was signed
by Elizabeth S. Giannone as managing agent. In addition, Ms.
Giannone submitted a deed for the subject premises dated July 28,
1983 wherein "54 Barrow Inc." was listed as purchasing the
subject premises from "City Realty Co.". On December 12, 1990, an
order was issued rejecting this petition since the owner failed to
set forth objections to the order being appealed.
In the refiled petition considered herein, the owner "54
Barrow Street" listing its agent as Elizabeth S. Giannone and
appearing by its attorney alleges in substance that the current
owner is "54 Barrow Street Realty Associates", that the current
owner first took ownership on December 24, 1985 and should not be
liable for the refund of any rent prior to December 24, 1985; and
that pursuant to Section 26-516 (g) of the Rent Stabilization Law,
the owner should not have been asked to submit rent records and
other documentation more that four years prior to the Rent
Administrator's request for such evidence.
The Commissioner is of the opinion that this petition should
be denied.
It is the DHCR's policy in fair market rent appeal cases that
the obligation of a new owner to refund excess rent is limited to
such excess rent collected by it and may not be extended to excess
FA 410268 RO
rent collected by any prior owner in the absence of any collusion
or relationship between the new owner and any prior owner.
In the instant case, an examination of the records clearly
discloses the existence of a relationship between the current
owner and prior owner. It is noted that the current owner's
managing agent Elizabeth S. Giannone of Jonis Realty Mgmt. Corp.,
submitted a deed showing the purchase of the subject premises in
1983 by a "54 Barrow Inc." with which she evidently had some
connection. Further the subject premises was registered in 1984
with the owner listed as "54 Barrow Street Associates, c/o Jonis
Realty Mgmt. Corp." In addition after the current owner states it
first took title to the subject premises on December 24, 1985, A.
J. Clarke continued to act as managing agent for a time as
witnessed by the tenant's August 1, 1986 renewal lease which
listed A. J. Clarke as the managing agent. It is noted that in
its answer to the tenant's fair market rent appeal, A. J. Clarke
stated that it first acquired ownership of the subject premises on
October 31, 1984. Based on the foregoing interconnected owner
relationships, the Commissioner is of the opinion that
apportionment of the excess rent is inappropriate and that the
current owner herein remains liable for the refund of all excess
rent to the tenant.
With regard to the owner's contention that it should not have
to submit rent records or documentary evidence more that four
years old pursuant to Section 26-516, it is noted that the Omnibus
HOusing Act of 1983 did not change the laws and procedure for
determining a challenge to the Fair Market Rent and that the base
date for computing a challenge to the fair market rent remains
June 30, 1974, or the date that the apartment first became
subject to rent stabilization, if later. Moreover although the
owner herein was asked to submit rent records more than four years
old, the owner's failure to submit such records and its failure to
submit comparability data merely resulted in the fair market rent
being determined solely on the basis of the special fair market
rent guideline and not on comparability data as well.
Accordingly, the Rent Administrator's order was warranted.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be, and
FA 410268 RO
the same hereby is, denied, and, that the order of the Rent
Administrator be, and the same hereby is, affirmed.
ISSUED
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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