FF 510357-RO

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

          APPEALS OF                              DOCKET NO.:   
                                                  FF 510357-RO                
                  M.S.C.T. REALTY CORP.           
             by:   JACK   FERRANTI,   PRES.              RENT   ADMINISTRATOR'S
                                                  DOCKET NO.: 
                                  PETITIONER      DI 530086-B

                                          IN PART

          On June 25, 1991, the above-named  owner  filed  a  petition  for
          administrative review of an order issued on April 24, 1991, by  a
          Rent Administrator concerning various housing  accommodations  in
          the building known as 623 West 136th Street, New York, New  York,
          wherein rents were reduced due to a diminution of  service.   The
          Commissioner deems this petition timely filed because the current 
          owner had not been served with a copy of the Rent Administrator's 

          The Commissioner has reviewed all of the evidence in  the  record
          and has carefully considered that portion relevant to the  issues
          raised by the petition for review.

          On September 29, 1989 the stabilized tenant of Apartment 8  filed
          an application for a rent reduction based on the owner's  alleged
          failure to maintain services alleging six items of building  wide
          services which were inadequate.

          On December 1, 1989, one  of  the  former  owners  interposed  an
          answer to the tenant's complaint wherein it denied  the  tenant's

          On July 2, 1990 a physical inspection of the subject building was 
          carried out by the Division  of  Housing  and  Community  Renewal
          (DHCR).  The inspector, in his report,  noted  that  the  floors,
          steps, and yard of the subject property were dirty.

          On October 29, 1990 another physical inspection  of  the  subject
          building  was   carried  out  by  the  Division  of  Housing  and
          Community Renewal (DHCR).  The inspector, in  his  report,  noted
          that the complained of conditions in the  public  areas  were  as

          FF 510357-RO
          alleged by the tenant and  that  there  was  an  accumulation  of
          garbage under the steps in the yard.

          On March 11, 1991 another  physical  inspection  of  the  subject
          building  was   carried  out  by  the  Division  of  Housing  and
          Community Renewal (DHCR).  The inspector, in  his  report,  noted
          that the complained of condition  in  the  public  areas  of  the
          building were as alleged by the tenant but that the yard had been 

          On April 24, 1991, the Rent Administrator issued the  order  here
          under review, finding that a diminution of services had  occurred
          and reducing the complaining tenant's rent to the level in effect 
          prior to the last rent guideline increase which commenced  before
          the effective date of the rent reduction.  The Rent Administrator 
          further ordered a six dollar ($6.00)  reduction  in  the  monthly
          rentals of two rent controlled tenants in the building.

          In its petition  for  administrative  review  the  current  owner
          requests reversal of  the  Rent  Administrator's  order  alleging
          inter alia, that it purchased the building In Rem from  the  City
          of New York on April 3, 1991 and that it was not able  to  obtain
          any information regarding pending DHCR complaints.  It is further 
          alleged that the City of New York was the owner of  the  building
          at the time of the March 11, 1991 inspection and that  since  the
          petitioner's ownership began on  April  3,  1991  the  building's
          public areas have been kept clean.   The  current  owner  asserts
          that a private owner should  not  be  penalized  for  the  City's
          failure to comply with its own building maintenance standards.

          After careful consideration the Commissioner is  of  the  opinion
          that this petition should be granted in part.

          The Commissioner notes that the Rent  Administrator  reduced  the
          rents of  two  rent-controlled  tenants,  neither  of  whom  were
          signatories to the complaint.  No rent controlled tenants  signed
          the complaint and the stabilized tenant who  did  sign  the  com-
          plaint did not allege that any other tenants were joining in  the

          complaint.  Accordingly, the owners of the building were  not  on
          notice of the fact that  the  tenant's  complaint  concerned  any
          other tenants.  This lack of notice to the owner  of  joinder  of
          additional parties was a denial of due process and the six dollar 
          reduction in the monthly rentals of the tenants of  apartments  6
          and 7 must be revoked.

          In regard to the rent reduction ordered for the stabilized tenant 
          of apartment 8 the Commissioner finds that it should be affirmed. 
          The record indicates that prior to the March 11, 1991  inspection
          cited by the owner, two previous inspections had corroborated the 
          tenant's allegations regarding the public areas.  It  is  further
          noted that the owner has not established the period of time  when
          the building was in rem but it is clear from the record  that  it
          was privately  owned when the complaint was filed and again  when
          the order was issued.  Moreover, the  conditions  for  which  the
          rent was reduced are in public areas and would have been  readily
          visible upon physical inspection of the premises by a prospective 

          FF 510357-RO
          purchaser.  Further as a  prospective  purchaser  of  an  in  rem
          property, the petitioner could have  secured  authorization  from
          the City to obtain information regarding  pending  DHCR  proceed-

          Pursuant to Section 2523.4(a) of the Rent Stabilization Code, 

               a tenant may apply to the DHCR for a  reduction  of  the
               legal regulated rent to the level  in  effect  prior  to
               the most  recent  guidelines  adjustment  and  the  DHCR
               shall so reduce the rent for the period for which it  is
               found that the owner has  failed  to  maintain  required

          Required services are defined in  Section  2520.6(r)  to  include
          repairs and maintenance.

          The Commissioner finds that the administrator properly based  his
          determination on the entire record; including the results of  the
          on-site physical inspections conducted on July 2 and October  29,
          1990 and on March 11, 1991 and that pursuant to Section 2523.4(a) 
          of the Code, the administrator was mandated to  reduce  the  rent
          upon determining that the owner had failed to maintain services.

          If there are arrears due to the owner as a result of the issuance 
          of this order and opinion, the tenants of apartments 6 and 7  may
          pay off such arrears in six equal monthly installments  beginning
          with the first rent payment  date  after  the  issuance  of  this

          This Order and Opinion is issued without prejudice to the owner's 
          rights as they may pertain to an application to the Division  for
          a restoration of rent based upon the restoration of services.

          THEREFORE, in accordance with  the  Rent  Stabilization  Law  and
          Code, and the Rent & Eviction Regulations for New York City,
          it is,

          ORDERED, that this petition be, and the same hereby  is,  granted
          in part and that the Rent Administrator's order be, and the  same
          hereby is, modified to the extent  f  revoking  the  rent  reduc-
          tions which were ordered for apartments 6 and 7.   In  all  other
          respects the Rent Administrator's order is affirmed.


                                                ELLIOT SANDER
                                                Deputy Commissioner


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