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

          APPEAL OF                              DOCKET NO. FJ110174RO
                                              :  DRO DOCKET NO.ZCG110024R
               PARK ESTATES                      TENANT: EDA WILLIAMS

                                PETITIONER    : 

               On October 21, 1991, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          September 19, 1991, by the Rent Administrator, 92-31 Union Hall 
          Street, Jamaica, New York, concerning the housing accommodations 
          known as 109-15 Merrick Blvd., Jamaica, New York, Apartment No. 2L, 
          wherein the Rent Administrator determined that the owner had 
          overcharged the tenant.

               The Administrative Appeal is being determined pursuant to the 
          provisions of Sections 2520.11 and 2521.1(c)(2) of the Rent 
          Stabilization Code.

               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 issue raised by the administrative appeal.  

               This proceeding was originally commenced by the filing in June, 
          1988, of a rent overcharge complaint by the tenant who first moved 
          to the subject apartment on August 15, 1981.  In her complaint, the 
          tenant stated in substance that the overcharge began on November 1, 

               In the order hereunder appeal, the Rent Administrator 
          determined that the owner failed to register the subject apartment 
          in the years 1984, 1986 and 1987 and also failed to submit a rental 
          history from April 1, 1980.  Based thereon, the Rent Administrator 
          determined that the owner had willfully overcharged the tenant and 
          found a rent overcharge totalling $39,160.98.

               In this petition, the owner alleges in substance that there is 
          no overcharge in that the subject building was owned by the United 
          States Department of Housing and Urban Development (hereafter HUD), 
          until March 23, 1988 when the owner herein acquired possession; that 
          during this period the building was not subject to rent 
          stabilization; and that HUD set the rent at $500.00 per month so 
          that the owner herein did not overcharge the tenant.  In support of 


          such contentions, the owner submitted a copy of the deed wherein it 
          acquired ownership of the subject building from HUD on March 23, 
          1988, and a copy of the HUD document previously setting the contract 
          rent at $500.00 per month (although the lease showed HUD was 
          charging less than $500.00 per month).

               The Commissioner is of the opinion that this petition should be 

               Section 2520.11 of the Rent Stabilization Code exempts from the 
          jurisdiction of the Code housing accommodations owned, operated or 
          leased by the United States, the State of New York, any political 
          subdivision, agency or instrumentality thereof, any municipality or 
          any public housing authority.

               Section 2521.1(c)(2) of the Rent Stabilization Code provides in 
          pertinent part that the initial legal registered rent for those 
          housing accommodations not required to be registered by June 30, 
          1984, shall be the rent charged and paid on the date the housing 
          accommodation became subject to the registration requirements.

               In the instant case, the evidence of record discloses that 
          prior to March 23, 1988, the subject building was owned and operated 
          by HUD.  Therefore, pursuant to Section 2520.11, the subject 
          apartment was not subject to Rent Stabilization and not required to 
          be registered with DHCR during this period. The record further 
          discloses that the last rent charged the tenant under HUD was 
          $420.00 per month and that the owner herein lawfully increased the 
          rent pursuant to  the appropriate guidelines then in effect to 
          $447.30 effective May 1, 1988 and $471.00 effective May 1, 1990 upon 
          lease renewal.  Accordingly, no rent overcharge occurred.

               If the owner has already complied with the Rent Administrator's 
          order and there are arrears due to the owner as a result of the 
          instant determination, the tenant is permitted to pay off the 
          arrears in 24 equal monthly installments.  Should the tenant vacate 
          after the issuance of this order or have already vacated, said 
          arrears shall be payable immediately.

               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, granted, and, that the order of the Rent 
          Administrator be, and the same hereby is, revoked, and it is found 
          that no rent overcharge occurred.


                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner




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