FD 410243 RO
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 NOS.: FD 410243 RO
FD 410306 RT
CAROL BROWN, TENANT DISTRICT RENT ADMINISTRATOR
AND DOCKET NO.: DJ 410026 RP
CLIFFORD RICH, TRUSTEE U/W/O
ROSE FERNBACH, OWNER,
PETITIONERS
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ORDER AND OPINION DENYING OWNER'S AND TENANT'S PETITIONS
FOR ADMINISTRATIVE REVIEW
On April 22, 1991 the above-named tenant filed a Petition for
Administrative Review against an order issued on March 22, 1991 by
a Rent Administrator, concerning housing accommodations known as
Apartment 3S, 26 East 81st Street, New York, New York, wherein the
Rent Administrator determined the fair market rent pursuant to the
special fair market rent guidelines promulgated by the New York
Rent Guidelines Board for use in calculating fair market rent
appeals.
On April 24, 1992, the above-named owner filed a petition for
administrative review against the same order.
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 appeal.
The original proceeding was initiated by the tenant on October 3,
1985, by filing an overcharge complaint and a fair market rent
appeal.
A copy of the complaint was served upon the owner along with a
notice advising the owner that the complaint was in reference to
fair market rent and rent overcharges.
In Order Number 58509 issued on May 6, 1988, the Rent Administrator
established the initial lawful stabilized rent as $1,761.63 per
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month, and calculated excess rent in the amount of $30,957.66 for
the period from July 1, 1984 through April 30, 1988.
On September 29, 1989, the Commissioner determined to remand the
proceeding to the Rent Administrator for further processing.
Specifically, the Commissioner's opinion directed a redetermination
of the fair market rent for the subject apartment, affording both
parties the opportunity to submit suitable comparability data. It
was further determined that the owner had failed to submit proof of
service of the DC-2 notice or initial apartment registration on the
tenant and that, accordingly, the tenant's objection to the initial
stabilized rent had been timely filed.
In response to the notice of reopening, the owner submitted a list
of July 1, 1984 and June 1, 1990 rents for the subject line and the
`S' line. The owner advised that of the rent stabilized apartments
in those 2 lines (not counting the subject apartment), all except
apartment 8S were decontrolled approximately 16 years ago and that
apartment 8S was decontrolled on November 1, 1985.
In Order Number DJ 410026-RP, issued on March 22, 1991, the Rent
Administrator determined that neither the owner nor the tenant had
submitted competent evidence of rents for comparable housing
accommodations and calculated a fair market rent of $1,761.63,
which was the same as in the earlier order. Total excess rent was
increased to $32,361.57, minus rent arrears of $964.24, resulting
in a total refund of $31,397.33.
Each of the parties filed a petition against the above order.
The owner's petition is concerned with the issue of the timeliness
of the tenant's fair market rent appeal. The owner contends that
the tenant was served with the initial apartment registration in
July, 1984. The owner submits an initial apartment registration
form addressed to the tenant, an affidavit of service from the Rent
Stabilization Association, a Post Office certificate of mailing
postmarked July 9, 1984 for a bulk mailing and a DHCR rent roll
report as of April 1, 1984. Since the tenant did not file her
objection until October 3, 1985, which was more then 90 days after
her receipt of the registration, the owner claims it was invalid as
untimely.
In answer to the owner's petition, the tenant asserts, among other
things, that she was never served with an initial apartment
registration form or DC-2 notice.
In the tenant's petition, the main argument against the order is
that the Administrator failed to formulate the rent based upon
comparability data, and in so doing, permitted the owner to profit
from its deliberate wrongdoing. The tenant contends that the
owner's own listings of the rents for all apartments in the line,
as well as those in a comparable line, reveal that 5 out of the 6
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stabilized apartments were actually rented for less than the fair
market rent for the subject apartment computed using the guidelines
formula. However, because the owner "persistently failed and
refused" to submit proof of service of the DC-2 notices on the
tenants of those apartments, even though repeatedly requested to do
so, the Rent Administrator was improperly limited to using the
guidelines formula above, resulting in a higher initial stabilized
rent. The tenant contends that the production of those records is
the owner's obligation, and that the Administrator erred by
allowing the owners to escape the penalties of avoiding it.
In answer to the tenant's petition, the owner asserts that the
submission of comparability data by the owner is voluntary and that
there are no contemporaneous comparables as defined by the Rent
Stabilization Code in this case, i.e., none of the cited apartments
was decontrolled within the 4 years prior to or one year after the
initial renting of the subject apartment.
The Commissioner is of the opinion that the owner's petition and
the tenant's petition should be denied.
It is dispositive that on the issue of the timeliness of the
tenant's objection that the Commissioner rendered a determination
on that issue in the order and opinion of September 29, 1989,
wherein it was found that the owner had failed to prove service of
the registration or DC-2 notice on the tenant and that the fair
market rent appeal was timely. The Commissioner's order was not
appealed and became final on the issue of timeliness of the
tenant's objection. The order of remand was restricted to the
reprocessing of the fair market rent appeal, affording both parties
the opportunity to submit evidence relevant to that issue only.
Accordingly, the issue of the timeliness of the tenant's fair
market rent appeal is not subject to appellate review herein.
Pursuant to Sections 2522.3(e) and (f) of the Rent Stabilization
Code effective May 1, 1987, for 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 4 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
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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.
Regarding the tenant's assertion that the owner should not be
allowed to benefit from its failure to submit proof of service of
DC-2 notices for comparable apartments, the Commissioner notes that
the submission of comparability data by the owner is optional.
Moreover, in this case, even if the owner had submitted proof of
service of DC-2 notices for the stabilized apartments in the
subject line and the `S' line, those apartments could not properly
have been used in the comparability study because none of those
apartments were decontrolled within the period from 4 years prior
to or one year after the initial stabilized renting of the subject
apartment. Therefore, the Commissioner finds that the
Administrator properly did not utilize the rents for those
apartments in a comparability study as part of the determination of
the fair market rent of the subject apartment.
The owner is directed to roll back the rent to the stabilized rent
consistent with this order and opinion, and to refund or fully
credit against future rents over a period not exceeding six months
from the date of receipt of this order, any rent paid by the tenant
herein in excess of the lawful stabilization rent.
In the event the owner does not take appropriate actions to comply
within 60 days from the date of this order, the tenant may credit
the excess rent against the next month(s) rent until fully offset.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is
ORDERED, that the owner's petition be, and the same hereby is,
denied, that the tenant's petition be and the same hereby is denied
and that the District Rent Administrator's order be, and the same
hereby is affirmed.
FD 410243 RO
ISSUED:
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JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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