FI 210182 RO
          FI 210079 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
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW     
          APPEALS OF                              DOCKET NOS.: FI 210079 RT
                                                               FJ 210182 RO
            121 NORTH 5TH STREET CORPORATION
                         AND                      DRO DOCKET NO.: BJ 210169 RV
                GAIL VACHON / JON RUBIN,

                                 PETITIONERS
          ----------------------------------X                                   


                     ORDER AND OPINION DENYING OWNER'S PETITION
                              FOR ADMINISTRATIVE REVIEW
                                         AND
                GRANTING TENANTS' PETITION FOR ADMINISTRATIVE REVIEW      
                              

          On September 20, 1991 and on September 18, 1991, the above-named 
          petitioners filed Petitions for Administrative Review against an 
          order issued on August 16, 1991 by the Rent Administrator, 92-31 
          Union Hall Street, Jamaica, New York concerning the housing 
          accommodations known as 121 North 5th Street, Apartment 2L, 
          Brooklyn, New York wherein the Rent Administrator determined that 
          the tenant was entitled to a renewal lease pursuant to the Rent 
          Stabilization Code and that an additional space rented by the 
          tenant did not constitute an ancillary service.  The owner's 
          petition was rejected on October 9, 1991 and the owner timely 
          refiled its petition.

          The issue herein is whether the Rent Administrator's order was 
          warranted.

          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 appeals.

          This proceeding was commenced on October 26, 1987 when the tenants 
          filed a complaint alleging that the owner had failed to offer a 
          renewal lease.

          In response to the complaint, the current owner asserted that since 
          the subject apartment is not rent stabilized, the tenants are not 
          entitled to a renewal lease.  The owner explained that the former 
          owner, in reliance on the written opinion of the DHCR that a change 












          FI 210182 RO
          FI 210079 RT

          in the number of rental units from six to five would serve to 
          remove the premises from the jurisdiction of the Rent Stabilization 
          Law, had effected the alteration before leasing the subject 
          apartment to the complainants.  Having informed the tenants of the 
          change in status of the subject accommodations, the owner asserts 
          that the tenants had no expectation ab initio of receiving any 
          benefits attaching to a rent stabilized apartment.  In support 
          thereof, the owner submitted a copy of a letter from the then - 
          Deputy Counsel of the DHCR in which he stated that the alteration 
          proposed by the owner would have the effect desired by the owner.

          While this proceeding was pending, the owner commenced a holdover 
          proceeding seeking to recover possession of a small space rented in 
          addition to the subject apartment by the tenants.  In that 
          proceeding, the Court held that the space was neither a housing 
          accommodation nor part of one but was raw space rented to the 
          tenants as storage space and rendered a final judgment awarding 
          possession of the space to the owner.

          The tenants took an appeal to the Supreme Court, Appellate Term 
          from the judgment.  Although the issue was not before it, the Court 
          reasoned that the status of the subject apartment, stabilized or 
          not, was essential to a determination as to who was entitled to 
          possession of the raw space.  Because the subject building 
          contained six housing accommodations on the date it first became 
          subject to the RSL, the court found that the tenants were entitled 
          to rent stabilized status and remanded the matter pending DHCR 
          determination of the issue of whether the subject space is a 
          required or ancillary service as defined by the Rent Stabilization 
          Code.

          In the order here under review, the Administrator determined that 
          the subject housing accommodations is subject to the RSL and that 
          the raw space is not an ancillary service under the jurisdiction of 
          the RSL.  The Administrator directed the owner to offer the tenant 
          a renewal lease and to register the subject building.

          In its appeal, the owner contends that the Administrator erred in 
          finding the premises subject to the RSL without giving sufficient 
          consideration to the written opinion of the prior Deputy Counsel 
          advising that units in the subject building would be removed from 
          the jurisdiction of the Emergency Tenant Protection Act of 1974 
          after the tenants in occupancy at the time of conversion from six 
          units to five units left the premises.

          In their appeal, the tenants contend that the Administrator erred 
          in determining that the space rented concomitantly with the 
          original leasing of the apartment was not an ancillary service.  
          The tenants further contend that the Administrator ignored the 
          guidance provided by the Supreme Court, Appellate Term in directing 
          that a determination be made as to whether the rented space is a 






          FI 210182 RO
          FI 210079 RT

          required or ancillary service.

          In reply, the owner contends that the tenants are attempting to 
          gain benefits not granted under the contract for the space which 
          limited the rental to a specified term or by the definition of 
          ancillary services provided by the Rent Stabilization Code.  The 
          owner asserts that the tenants have misunderstood the directive of 
          the Court as requiring a finding that the space constitutes a 
          required or ancillary service as defined by Section 2520.6(r)(3) of 
          the Code.

          After careful consideration, the Commissioner is of the opinion 
          that the owner's petition should be denied and that the tenants' 
          petition should be granted.

          The Supreme Court, Appellate Term found on the facts and on the law 
          that the apartment was subject to the RSL and that the tenants 
          herein were entitled to its benefits.

          Under the Code if a building contained six or more dwelling units 
          on the date the building became subject to the RSL (such as the 
          subject premises herein) any subsequent decrease in the number of 
          units will not change the rent stabilization status of the building 
          and vacancy destabilization will not occur.

          The tenants cannot be deprived of the benefits provided by the law 
          by an opinion based on an incorrect interpretation.  A review of 
          the record reveals that the Deputy Counsel's opinion in 1984 was 
          not thereafter followed by the DHCR in decisions issued before the 
          owner made the alteration herein.  See BJ 430066 RO. 

          With respect to the court's directive regarding the status of the 
          space here at issue, Section 2520.6(r)(3) of the Code defines 
          ancillary services as that space and those required services not 
          contained within the individual housing accommodation which the 
          owner was providing on applicable base dates and any additional 
          space or services provided or required to be provided thereafter by 
          applicable law.  Ancillary services may include, but are not 
          limited to, garage facilities, laundry facilities, recreational 
          facilities, and security.  The Code does not require, as the owner 
          argues, that ancillary services must be available on a building- 
          wide basis.  Contrary to the owner's assertions, the space fits the 
          Code's definition of an ancillary service and is subject to the 
          jurisdiction of the RSL.  Pursuant to Section 2520.13 of the Code, 
          the tenants' statutory rights cannot be diminished by contractual 
          limitations.


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













          FI 210182 RO
          FI 210079 RT

          ORDERED, that the owner's petition be, and the same hereby is, 
          denied, that the tenants' petition be and the same hereby is 
          granted and the Rent Administrator's order be, and the same hereby 
          is, modified in accordance with this Order and Opinion to state 
          that "raw space" rented by the tenants on the same floor as the 
          subject apartment is an ancillary service subject to the Rent 
          Stabilization Law and Code.  In all other respects, the Rent 
          Administrator's order is affirmed.







          ISSUED:

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

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