FG 410101-RT
                                  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 SJR 5997 (Remit)
          IN THE MATTER OF THE ADMINISTRATIVE  ADMINISTRATIVE REVIEW
          APPEAL OF                            DOCKET NO.: FG 410101-RT
                                                           
               Patricia Avila,                 DISTRICT RENT ADMINISTRATOR
                                               DOCKET NO.: ZBH-410011-RP,
                                               (L-3110064-R, CDR 28954,
                                               BC                410154-RO)
                                               Owner:        
                                   PETITIONER    Friedman Mgmt. Company
          -----------------------------------X

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

          On July  5,  1991  the  above  named  petitioner-tenant  filed  a
          Petition for Administrative Review against an order issued on May 
          30, 1991 by the Rent  Administrator,  92-31  Union  Hall  Street,
          Jamaica, New York  concerning  housing  accommodations  known  as
          Apartment 1A at 15 East 94th Street, New York, New York,  wherein
          the Rent Administrator determined that the owner had  overcharged
          the tenant.

          On August  14,  1991  the  petition  was  rejected  as  untimely.
          Subsequent thereto, the tenant filed a petition in Supreme  Court
          pursuant to Article 78  of  the  Civil  Practice  Law  and  Rules
          contending that her Petition for Administrative Review should  be
          deemed to be timely filed.  The proceeding was  remitted  to  the
          DHCR, and the tenant's petition is herein decided on the merits.

          The Commissioner notes that this proceeding was  filed  prior  to
          April 1, 1984.  Sections 2526.1(a)(4) and 2521.1(d) of  the  Rent
          Stabilization  Code  (effective  May  1,  1987)  governing   rent
          overcharge  and  fair  market  rent  proceedings   provide   that
          determination of these matters be based  upon  the  law  or  code
          provision  in  effect  on  March  31,  1984.   Therefore,  unless
          otherwise  indicated,  reference  to   Sections   of   the   Rent
          Stabilization Code (Code) contained herein are  to  the  Code  in
          effect on April 30, 1987.

          The issue in this appeal  is  whether  the  Rent  Administrator's
          order was warranted.

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law, Sections 2523.5(f), 2526.1(a) and 2526.1(d) of 
          the current Rent Stabilization Code and Section 2J of the  former
          Rent Stabilization Code.

          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  March,
          1984 of a rent overcharge complaint (Docket No.  L-3110064-R)  by






          FG 410101-RT
          the tenant, in which she stated that she had commenced  occupancy
          on August 20, 1979 at a rent of $450.00 per month.

          The owner was served  with  a  copy  of  the  complaint  and  was
          requested to submit rent records to prove the lawfulness  of  the
          rent being charged.   In  answer  to  the  complaint,  the  owner
          submitted a  complete  rental  history  from  the  base  date  as
          required.

          In an  order  issued  on  February  9,  1987  the  District  Rent
          Administrator determined that the tenant had been overcharged  in
          the amount of $18,255.96 as of August 31, 1986, and directed  the
          owner to refund such overcharge to  the  tenant  as  well  as  to
          reduce the rent.   The  overcharge  resulted  because  the  owner
          charged the prior tenant a rent of $228.97 in  his  last  renewal
          lease, rather than the $385.92 that could have been charged,  but
          then based the complainant's vacancy rent on $385.92.

          The owner's appeal of the order was assigned Docket No. 
          BC 410154-RO.  In his appeal Bernard Friedman contended that when 
          he bought the building he was given a February  14,  1978  letter
          [this also being the date of the  closing],  from  the  assistant
          treasurer of the trust department of a bank to a realty  company,
          explaining that the [prior] tenant had been given a renewal lease 
          commencing November 1, 1977 for approximately $150.00  less  than
          could have been charged by the Managing  Agent  of  the  bank  as
          executor of the estate of the prior owner; and that this  was  in
          lieu of compensation for work that the [prior] tenant was  doing,
          at the request in late 1977 of a  member  of  the  prior  owner's
          family, to oversee and  help  in  the  operation  of  four  small
          apartment buildings connected with the estate.   The  owner  also
          contended that the selling broker had assured him that the credit 
          was handled properly and would not be construed to be a reduction 
          of rent.

          In an order issued on August 14, 1987 the  Commissioner  remanded
          the proceeding for a thorough  consideration  of  the  allegation
          that the prior tenant's rent did not accurately reflect the  full
          rental value to  the  then  tenant  because  said  rental  amount
          incorporated a credit for services rendered to the estate of  the
          prior owner.  

          The new proceeding was assigned Docket No. BH-410011-RP.  In that 
          proceeding the owner  was  requested  to,  but  did  not,  submit
          documentary evidence to establish the rent actually paid  by  the
          prior tenant in his last lease from November 1, 1977  to  October
          31, 1978.  On May 30, 1991 the Administrator issued a new  order,
          which based the complainant's vacancy rent on the $362.37 rent in 
          the prior tenant's penultimate lease rather than the $385.92 that 
          could have been charged in the prior tenant's  final  lease,  and
          determined an overcharge of $4,431.71  as  of  August  31,  1986,
          including treble damages on overcharges occurring  on  and  after
          April 1, 1984.

          In her petition  against  that  order,  the  tenant  contends  in
          substance that the February 14, 1978 letter from a  colleague  of
          the executor of  the  estate  of  the  former  owner  constitutes
          hearsay of  little  probative  value,  since  it  refers  to  the
          executor's  "records"  as  the  source  of  authority   for   the






          FG 410101-RT
          reduction, without either enclosing such records or furnishing an 
          elaboration by someone with actual knowledge of the matter;  that
          the odd amount of the reduction - $156.95 - calls  into  question
          the credibility of the executor as well as the unknown reason for 
          the estate giving the prior tenant a  reduced  rent  rather  than
          simply paying him a salary for his services; that no evidence was 
          offered showing that the work was the kind for which  rent  could
          legally be temporarily  reduced,  and  then  increased  with  the
          advent of a vacancy; and that case law establishes  both  that  a
          complete rental history from the base date is required  and  that
          affidavits from former tenants, analogous to the  belated  letter
          offered by the owner, may be found by the DHCR to lack  probative
          value.  The tenant also asserts in  substance  that  the  owner's
          failure to abide by the Rent Stabilization Code entitles  her  to
          be awarded attorney's fees.  With her  petition  the  tenant  has
          enclosed  an  invoice  from  her  attorney  for   preparing   and
          submitting the petition.

          The owner did not submit an  answer  to  the  tenant's  petition,
          although given an opportunity to do so.

          The Commissioner is of the opinion that this petition  should  be
          denied.

          While the tenant is correct about the necessity of a full  rental
          history, the  owner  did  furnish  leases  from  the  base  date,
          including the prior tenant's last lease at a rent of $228.97 even 
          though the rent could have been as much  as  $385.92.   When  the
          owner did not substantiate the prior tenant's payment of  a  rent
          of $228.97, the Administrator  based  the  complainant's  initial
          rent on the rent of $362.37 in the previous lease, which has  not
          been disputed, and imposed treble damages.  If the  Administrator
          had based the complainant's rent on the purported  rental  value,
          including credit for services rendered, of $385.92  in  the  last
          lease, there would have been  no  overcharge  found.   While  the
          February 14, 1978 letter from the Assistant  Treasurer  of  Chase
          Manhattan Bank was probably written because of the  sale  of  the
          property on that same day (although not for the  purpose  of  any
          pending  Conciliation  and  Appeals   Board   proceedings),   the
          Commissioner finds plausible the bank  officer's  explanation  of
          the reason behind an offer of a lease for $228.97 to a tenant who 
          had paid $362.37 in his previous lease and $330.93 in  his  first
          lease.  This is clearly not a situation where an owner has waived 
          a right to base future rents on a higher rent by charging  a  low
          rent, typically in whole dollars, in an attempt to fill a  vacant
          apartment.  The Commissioner considers  it  sufficient  that  the
          prior tenant's last lease is not allowed to increase  the  lawful
          stabilization rent above the amount charged  in  his  penultimate
          lease, and that treble  damages  were  imposed  for  the  owner's
          failure to document that the rent recited in his last  lease  was
          actually paid.

          Without deciding the circumstances where it might be  appropriate
          to award attorney's fees for the work of a tenant's  attorney  in
          appealing an Administrator's order,  the  Commissioner  does  not
          find that  the  owner  should  be  required  to  pay  the  tenant
          $1,750.00 for her costs of attacking  an  order  which  has  been
          found by this order to have been warranted in the first instance, 
          and which is unchanged from the way it would  have  been  if  the






          FG 410101-RT
          tenant had not gone through the expense of challenging it.

          Because of the  possibility  that  the  rents  charged  were  not
          reduced after  the  Administrator's  order  [indeed,  the  annual
          apartment registrations indicate that the owner has been charging 
          a rent of $624.87 per month from September  1,  1986  through  at
          lease April 1, 1991], the owner is cautioned to adjust the  rent,
          in leases after those considered by the Administrator, to amounts 
          no greater than that determined by the Administrator's order plus 
          any lawful increases, and to register any adjusted rents with the 
          Administrator's  order  being  given  as  the  reason   for   the
          adjustment.  Because of the possibility that  the  tenant  herein
          may have vacated by the time that this determination is issued, a 
          copy of this determination  s  being  mailed  to  the  tenant-in-
          occupancy.

          This order may, upon the expiration of the period  in  which  the
          owner may institute a proceedi g  pursuant  to  Article  seventy-
          eight of the civil practice law and rules, be filed and  enforced
          by the tenant in the same manner as a judgement or not in  excess
          of twenty percent thereof per month may  be  offset  against  any
          rent thereafter due the owner.


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

          ORDERED, that this petition be, and the same  hereby  is,  denied
          and that the Rent Administrator's order be, and the  same  hereby
          is, affirmed.  The lawful stabilization rent is $530.76 per month 
          in the lease commencing September 1, 1984.  The total  overcharge
          as of August 31, 1986, including excess security  of  $32.60,  is
          $4,431.71.

          ISSUED:

           
                                                       JOSEPH A. D'AGOSTA
                                                       Deputy Commissioner


    

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