FG 410358 RO

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

      APPEAL OF                              DOCKET NO. FG 410358 RO

                                          :  DISTRICT RENT OFFICE
                                             DOCKET NO. DK 410018 RP
           Classic Properties, L.P.,                    (L 3118034 RT)

                                             TENANT: EIS/Aghion               
                            PETITIONER    : 

                                     IN PART

      On July 26, 1991, the above-named petitioner filed a Petition for 
      Administrative Review of an order issued on July 3, 1991, by the Rent 
      Administrator, concerning the housing accommodations known as Apartment 
      7J at 2 Horatio Street, New York, New York, wherein the Administrator 
      determined the fair market rent pursuant to the special fair market rent 
      guideline promulgated by the New York City Rent Guidelines Board for use 
      in calculating fair market rent appeals.

      In the herein-appealed order, the Rent Administrator, after affording 
      the current owner the opportunity to address the tenants' fair market 
      rent appeal on the merits in accordance with a July 26, 1989 Supreme 
      Court Order, determined that the Administrator's order previously issued 
      on November 3, 1986 should be affirmed, and that excess rent totalling 
      $38,740.90 (through September 30, 1986) had been collected.

      In its petition, the owner contends that the tenants' fair market rent 
      appeal was untimely; that the owner provided full comparability data, 
      which the Division failed to use; that the Administrator erroneously 
      failed to grant it a rent increase for vacancy improvements; and that 
      the Administrator failed to serve a Summary Notice upon the owner, thus 
      depriving it of due process.  With the petition, the current owner 
      resubmits a photocopy of documentation supporting its allegation that 
      vacancy improvements had been made by the prior owner.  That 
      documentation had been first submitted by the then owner during 
      processing of the tenant's objection filed under Docket Number 001423, 
      which included a fair market rent appeal which was subsequently 
      dismissed as untimely filed.
      The tenants did not raise any substantive objections to the owner's 
      petition for administrative review in their response.

          FG 410358 RO

      The Commissioner is of the opinion that the petition for administrative 
      review should be granted in part, and that the order of the 
      Administrator should be modified.

      Section 2522.4 of the Rent Stabilization Code provides, in pertinent 
      part, that for dwelling units for which there has been an increase in 
      dwelling space or the installation of new equipment or improvements, the 
      monthly stabilization rent shall be increased by 1/40th of the total 
      cost of such added dwelling space, equipment or improvements.

      The Commissioner finds that the Administrator erred in omitting from his 
      computations vacancy improvements which had been adequately documented 
      by a prior owner in the tenants' objection proceeding under Docket No. 
      001423.  Accordingly, the legal regulated rent of $461.48, per month, as 
      found by the Administrator, is increased by $279.64, per month, 
      representing 1/40 of the sum expended for vacancy improvements, 
      totalling $11,185.81.  The revised rent calculation chart is attached, 
      and hereby is made a part of this order.  The total excess rent 
      collected through September 30, 1986 is $29,993.80, including excess 

      Concerning the timeliness of the tenants' fair market rent appeal: the 
      issue of timeliness was determined in a previous petition for 
      administrative review (AL 410317 RO).  The subsequent court order did 
      not disturb the decision of the Commissioner with regard to timeliness.  
      The Commissioner finds no basis for reconsidering the issue in this 

      With regard to the comparability data provided by the owner: the owner 
      has failed to supply the requisite documentation of proof of service of 
      either the Initial Apartment Registration or the Notice of Initial Legal 
      Registered Rent on the first stabilized tenants of those apartments 
      which it indicated were to be utilized as comparables, rendering them 
      unusable.  Consequently, the tenant's fair market rent was correctly 
      determined on the basis of the special guidelines order promulgated by 
      the New York City Rent Guidelines Board.

      Concerning the allegation of the owner that the failure of the 
      Administrator to serve a summary notice denied the owner due process in 
      that it deprived the owner of the "opportunity to comment and urge the 
      Administrator to accept the comparables offered": the owner, on appeal, 
      was given full notice that certain documentation was required; was 
      granted several extensions of time in which to provide such information; 
      and, nevertheless, failed to provide the requisite information.  
      Accordingly, no denial of due process has taken place.

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

      ORDERED, that this petition for administrative review be, and the same 

          FG 410358 RO

      hereby is, granted in part, and, that the order of the Rent 
      Administrator be, and the same hereby is, modified to the extent 
      hereinabove indicated.  The total amount of excess rent owed to the 
      tenants is $29,993.80, through September 30, 1986.


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner


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