FC 410280 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          ----------------------------------X     S.J.R. 5875
          APPEAL OF                               DOCKET NO.: FC 410280 RO  

               242 MOTT REALTY CORPORATION,
                                                  DRO DOCKET NO.: CA 410340 R



          On March 21,  1991  the  above-named  petitioner-owner  filed  an
          Administrative Appeal against an order  issued  on  February  14,
          1991 by the District Rent Administrator, 92-31 Union Hall Street, 
          Jamaica New York, concerning the housing accommodations known  as
          242 Mott Street, New York, New York, Apartment 2B.

          Subsequent thereto,  the  petitioner  filed  a  petition  in  the
          Supreme Court pursuant to Article 78 of the  Civil  Practice  Law
          and  Rules  requesting  that   the   "deemed   denial"   of   its
          administrative appeal be annulled.  On October 10, 1991, an order 
          was signed by Justice Ira Gammerman remitting the  proceeding  to
          the Division for an  expeditious  determination  of  the  owner's
          administrative appeal.   

          The Administrative Appeal is being  determined  pursuant  to  the
          provisions of 9 NYCRR 2522.3.

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

          A review of the record indicates that on January  25,  1988,  the
          tenant  filed  a  Complaint  of  Rent  Overcharge  and/or  Excess
          Security Deposit wherein he stated that he moved into the subject 
          apartment on November 1, 1987 pursuant to a lease  from  November
          1, 1987 to October 31, 1988 at a monthly rent  of  $950.00;  that
          the owner did not provide the tenant with a copy of the apartment 
          registration; that he is the first rent-stabilized  tenant;  that
          about a month previously, he received Form DC-2A from  the  owner
          showing that the last rent-controlled rent was $183.85;  that  it
          is his understanding that the owner is entitled to an increase of 
          35% above the rent-controlled rent plus one-fortieth of the total 
          renovation cost; that the  renovations  consisted  of  the  floor
          being sanded and painted, the walls and ceilings  being  painted,
          new cabinets being installed in the kitchen, a new stove,  a  new
          refrigerator, a new sink  in  the  bathroom,  new  tiles  in  the
          bathroom, and five new storm windows; that  he  approximates  the

          FC 410280 RO
          maximum renovation cost  at  $5,000.00;  and  that  he  therefore
          believes that he is being overcharged by about $570.00 per month. 
          The tenant attached to his complaint a copy of the  DC-2A  Notice
          to Rent Stabilized Tenant of Right to File  a  Fair  Market  Rent
          Appeal which was signed by a the  owner  and  dated  November  2,

          A copy of the tenant's complaint was mailed by  the  Division  to
          the owner on February 17, 1988.  The owner responded on March  8,
          1988 by stating that the subject apartment w s  previously  rent-
          controlled; that the tenant  is  the  first  occupant  after  the
          apartment was decontrolled; that the tenant's complaint  of  rent
          overcharge  is  therefore  not   applicable   and   it   is   the
          responsibility of the tenant to file the  proper  complaint;  and
          that at such time that the tenant files the proper  complaint  on
          the proper forms, the owner will have no problem fully  answering
          such complaint.

          On  October  10,  1990,  the  Division  re-served  the   tenant's
          complaint on the  owner  together  with  a  Notice  to  Owner  of
          Tenant's Fair Market Rent Appeal, a Notice  of  Clarification,  a
          Challenge to Fair Market Rent Answering Package,  and  a  Request
          for  Additional  Information/Evidence  requesting  certain   rent
          records and other evidence and advising the  owner  that  it  may
          also submit comparability data.

          On October 31, 1990, the owner responded that it  had  previously
          answered the tenant's complaint by stating that at such  time  as
          the tenant files the proper complaint, it will respond; that  the
          owner has now received a converted fair market  rent  appeal  not
          signed by the tenant and having the same  docket  number  as  the
          previous rent overcharge complaint; and that at such time as  the
          proper complaint is sent to the owner on the  proper  forms  with
          the tenant's signature, it will fully answer such complaint.

          On November 8, 1990, the Division mailed to the owner  a  Summary
          Notice advising the owner of the subject apartment's 1986 Maximum 
          Base Rent and fuel cost adjustment; and further advising that the 
          fair market rent will be determined on the basis of such  figures
          increased by the appropriate Special Fair Market Rent  Guidelines
          Order.  The owner was  given  twenty-one  days  within  which  to

          On November 23,  1990,  the  owner  replied  by  reiterating  its
          previous answers and stating that since the tenant had not signed 
          a fair market rent appeal within the specified time  period,  the
          proceeding should be dismissed and all further action stopped.

          On December 11, 1990, the Division mailed to the owner an Amended 
          Summary Notice on which the 1986 Maximum  Base  Rent  figure  was

          On January 30, 1991, the owner again stated that since the tenant 
          has not signed a fair market rent  appeal  within  the  specified
          time period, the proceeding should be dismissed and  all  further
          action stopped.

          No further reply from the owner was received and on February  14,
          1991, the District Rent Administrator issued the  order  appealed

          FC 410280 RO

          The District Rent Administrator's order granted the tenant's fair 
          market rent appeal; determined that  the  fair  market  rent  was
          $322.26 per month during the lease term  from  November  1,  1987
          through  October   31,  1988;  determined  that  the  owner   had
          collected $24,551.63 in excess rent and excess security from  the
          tenant during the period from November 1,  1987  through  October
          31, 1990; and directed the owner to adjust the rent to the lawful 
          stabilized amount and make full refund to the tenant.

          The fair market rent was determined solely on the  basis  of  the
          Special Guidelines Order No. 19 which  was  in  effect  when  the
          tenant took initial occupancy. The District Rent  Administrator's
          order noted that the owner failed to submit competent evidence of 
          comparability, as well as any evidence  to  substantiate  claimed
          renovations  and  new  equipment  allegedly  installed   in   the

          On appeal, the petitioner-owner alleges, in substance,  that  the
          proceeding was commenced by the tenant filing a complaint of rent 
          overcharge and/or excess security  allegedly  in  January,  1988;
          that on February 17, 1988, the Division forwarded the  overcharge
          complaint to the owner; that the owner filed  an  answer  to  the
          overcharge complaint on February  17,  1988;  that  almost  three
          years  later,  the  District  Rent  Administrator,  sui   sponte,
          attempted to re-serve the tenant's complaint and convert same  to
          a fair market rent appeal; that in response, the owner noted that 
          the tenant did not file a fair  market  rent  appeal  within  the
          permissible time period and that  any  attempts  to  convert  the
          overcharge complaint to a fair market rent appeal were  therefore
          untimely; that,  nonetheless,  the  District  Rent  Administrator
          improperly treated the tenant's overcharge complaint  as  a  fair
          market rent  appeal;  that  said  unilateral  conversion  by  the
          District  Rent  Administrator  is  unfairly   and   impermissibly
          prejudicial to the owner and represents a serious deprivation  of
          due process; that the owner previously served the tenant  with  a
          notice of the tenant's right to file a fair  market  rent  appeal
          (Notice Form DC-2A); that the 90-day time  period  permitted  for
          the filing of a fair market rent appeal after service of t e  DC-
          2A notice had long since passed; that the Court held in East  7th
          Street Assoc. v.  DHCR,  Index  No.  13811/90,  Justice  Dontzin,
          Supreme Court, State of N.Y. (Queens County)  that  the  Division
          may not convert a complaint of rent overcharge to a  fair  market
          rent appeal; that had the tenant timely filed a fair market  rent
          appeal, the owner could have properly  defended  against  it  and
          through the use of comparable apartments  validated  the  initial
          fair market rent;  that  in  the  event  the  processing  of  the
          tenant's rent overcharge complaint as a fair market  rent  appeal
          is upheld, the  evidence  of  comparable  rent  which  the  owner
          submitted with its administrative appeal should be applied  to  a
          recalculation of the fair market rent; and that the  rent  should
          be further adjusted for the new equipment and improvements  which
          were installed in the apartment when it was vacant just prior  to
          the commencement of the tenant's occupancy.

          On April 22, 1991,  the  owner  supplemented  its  administrative
          appeal by submitting additional evidence of comparable rents  and
          of improvements to the apartment.

          FC 410280 RO

          After a careful consideration of the entire  evidence  of  record
          the Commissioner is of the opinion that the administrative appeal 
          should be denied.

          The owner's argument that the tenant's complaint of  January  25,
          1988 did not constitute  a  valid  fair  market  rent  appeal  is
          without merit.  Said complaint, which  was  filed  within  ninety
          days of the tenant's having received the DC-2A form, was  clearly
          and unambiguously a challenge  of  the  initial  stabilized  rent
          charged for the apartment.  The tenant stated  that  he  was  the
          first rent-stabilized tenant; that he was challenging his initial 
          rent; that he recently received the DC-2A Notice Form;  and  that
          the owner would only be entitled to an appropriate adjustment  of
          the last rent-controlled rent.  The owner was clearly  on  notice
          that this proceeding involved a fair market rent appeal.  This is 
          not a case in which an overcharge complaint was  later  converted
          to a fair market rent appeal.  The nature of  the  complaint  was
          obvious from the start.

          The Commissioner notes that the  Court's  decision  in  East  7th
          Street Assoc. v. DHCR is being appealed.  It has be n  the  long-
          standing policy of the Division  to  consider  any  complaint  or
          application filed with the Division on the merits of  the  issues
          actually raised, regardless of the form used.  Moreover, in 1988, 
          at the time  the  instant  complaint  was  filed,  there  was  no
          separate form in use specifically for Fair Market Rent Appeals.

          The  record  reveals  that  the  owner  was  repeatedly  afforded
          opportunities  to  submit  comparability  data  and  evidence  to
          substantiate improvements to the apartment in connection with the 
          processing of the tenant's fair market rent appeal, but that  the
          owner steadfastly refused to avail itself of such  opportunities.
          The District Rent  Administrator  properly  determined  the  fair
          market rent appeal on the basis of the owner's default.

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

          ORDERED, that this administrative appeal be, and the same  hereby
          is,  denied,  and  that  the   order   of   the   District   Rent
          Administrator be, and the same hereby is, affirmed.

                                                  ELLIOT SANDER
                                                  Deputy Commissioner

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