FE420013RO

                                  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 NO. FE420013RO
                                              :  DRO DOCKET NO.ZL002807R
               515 REALTY CORP.                  TENANT: JOHN J. FERRON

                                PETITIONER    : 
          ------------------------------------X                             
             ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


               On May 1, 1991, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on March 
          28, 1991, by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as 
          515 East 83rd Street, New York, New York, Apartment No. 3B, 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.

               The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2522.3 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 on July 8, 1985, by 
          the tenant's filing of a rent overcharge complaint in which the 
          tenant stated in substance that he had moved to the subject 
          apartment in April, 1985; that the prior tenant had lived in the 
          subject apartment for a long time  and that he questioned if the 
          owner had calculated his rent correctly.  In response, the owner 
          stated that the last tenant prior to occupancy was rent controlled 
          and that the tenant herein was the first tenant to occupy the 
          subject apartment after it was decontrolled.

               The owner was advised that the tenant's complaint was being 
          treated as a fair market rent appeal and afforded an opportunity to 
          submit comparability data for use in determining the fair market 
          rent.  There is nothing in the record to show that the owner 
          submitted any comparability data.

               In Order Number ZL002807R, the Rent Administrator adjusted the 
          initial legal regulated rent by establishing a fair market rent of 
          $407.10 effective April 1, 1985, the commencement date of the 









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          initial rent stabilized lease.  The fair market rent was determined 
          solely on the basis of the special fair market rent guideline.  In 
          addition, the Rent Administrator determined that the tenant had paid 
          excess rent of $44,535.26 through March 31, 1991, and directed the 
          owner to refund such excess rent to the tenant.

               In this petition, the owner alleges in substance that the owner 
          supplied the DHCR with all pertinent data on or about December 20, 
          1986; that the DHCR is required to examine rents charged for 
          comparable apartments in the same building or neighboring buildings 
          at the time the complaining tenant's apartment became subject to 
          rent stabilization; and that the Rent Administrator's order should 
          be reversed because comparability was not used in the determination 
          of the fair market rent.  In support of its contentions, the owner 
          submitted copies of apartment registrations and leases for various 
          apartments including some apartments in the subject premises.

               The Commissioner is of the opinion that this petition should be 
          denied.

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

          (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 accommodations involved.

               Further it is agency policy for owners to submit data for 
          complete lines of apartments including the subject line.

               In the instant case, it is noted that the above requirements on 
          comparability were explained in the instructions sent to the owner.  
          The file does not reveal any submission by the owner including 
          comparability data as alleged by the owner on appeal.  Further, 
          since this is not a de novo proceeding, evidence submitted for the 
          first time on appeal cannot be considered absent good cause shown 
          for the failure to submit such material below.  In any event, the 
          material submitted by the owner on appeal does not meet the 
          aforementioned criteria as required for acceptable comparables 
          pursuant to Section 2522.3(e).  The owner did not establish that the 
          apartments cited on appeal were rent stabilized apartments which 
          were rented to a first stabilized tenant during the appropriate 
          period or any proof that the tenants of such comparable apartments 
          had been served with a Notice of Initial Legal Regulated Rent or 






          FE420013RO

          Initial Apartment Registration.  Finally, it is the owner's 
          responsibility to submit comparability data if it chooses and the 
          DHCR is under no obligation to find comparable apartments for an 
          owner.  Accordingly, the Rent Administrator's order was warranted.

               The owner is directed to roll back the rent to the lawful 
          stabilized rent consistent with this decision and to refund or fully 
          credit against future rents over a period not exceeding six months 
          from the date of receipt of this order, the excess rent collected by 
          the owner.

               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 registration 
          statements, including those for the current year if not already 
          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 
          increases.

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

               ORDERED, that this petition for administrative review be, and 
          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
                                          Deputy Commissioner




                     




















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