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



          ----------------------------------X
          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
          ----------------------------------X                                   


              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 












          FD 410243 RO

          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 






          FD 410243 RO

          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 












          FD 410243 RO

                    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:

                                                  ------------------------
                                                  JOSEPH A. D'AGOSTA
                                                  Acting Deputy Commissioner
           
             
                                             






    

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