FJ 410204 RO

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

      APPEAL OF                              DOCKET NO. FJ 410204 RO

                                          :  DISTRICT RENT OFFICE
                                             DOCKET NOS. ZFD 410027 RP/
           Clarkson Arms Inc.,                           AF 410391 R
                                             TENANT: Steven Arabatzis         

                            PETITIONER    : 


      On October 4, 1991, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on August 30, 1991, by 
      the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 230 West 99th Street, New 
      York, New York, Apartment No. 4S, wherein the Administrator granted the 
      tenant's Fair Market Rent Appeal, establishing the legal stabilized rent 
      and directing the owner to refund $40,018.74 in excess rent to the 

      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.  

      The tenant originally commenced this proceeding on June 30, 1986 by 
      filing a complaint of rent overcharge in which the tenant alleged that 
      he was the first rent stabilized tenant to occupy the apartment.

      In response to the complaint, the owner asserted that since the tenant 
      was the first rent stabilized tenant, he should have filed a Fair Market 
      Rent Appeal which then should have been dismissed as untimely.

      Based upon the alleged failure to challenge the initial rent within 90 
      days of receipt of the DC-2 notice, the Administrator terminated the 
      proceeding in an order issued on March 20, 1990.

      Subsequent thereto, the tenant's petition for administrative review was 
      granted and the proceeding was remanded for processing of the fair 
      market rent appeal on the merits.  

      The owner was advised that the fair market rent would be determined on 
      the basis of two criteria, the applicable guidelines promulgated by the 
      Rent Guidelines Board for such purposes and rents generally prevailing 
      for substantially similar housing accommodations in buildings located in 
      the same area as the housing accommodation involved.  For the 
      comparability study, the owner was requested to submit comparable 

          FJ 410204 RO

      apartments which had been decontrolled four years prior to and one year 
      subsequent to the commencement date for the initial lease for the 
      subject apartment and to submit rental information for the entire line 
      for each apartment submitted.  The owner was also directed to submit a 
      Notice of Initial Legal Regulated Rent (hereafter DC-2 Notice) or an 
      Initial Apartment Registration form for each comparable apartment as 
      well as proof of service.

      The owner submitted various apartments in the "S" line as well as 
      apartment 6N and 3E for the comparability study.  Of the apartments 
      submitted, only apartment 6N met the time constraints imposed by Section 
      2522.3 of the Code.  However, apartment 6N was found unusable for 
      comparability purposes because the owner failed to submit the required 
      documentation - certified proof of service of the DC-2 Notice and rental 
      data on the complete "N" line of apartments.

      In the order here under review, using only one criterion, Special 
      Guidelines Order number 17, the Administrator established the Fair 
      Market Rent and directed the owner to refund $40,018.74 inclusive of 
      excess security.

      In its appeal, the owner asserts that the order should be reversed or, 
      in the alternative, the matter should be remanded to give the owner an 
      opportunity to submit comparables.

      The owner contends that the Administrator erred in not considering 
      apartment 6N for comparability because the owner had submitted all that 
      it had been required to: proof that the DC-2 was served on the tenant in 
      apartment 6N; it had not been requested to submit the entire "N" line. 
      The owner also contends that the order is in error in failing to take 
      notice of 1) prevailing rents in the surrounding area and 2) the 
      uniqueness of the subject apartment.  The owner further contends that it 
      is entitled to additional rent for various improvements made to the 
      apartment and to the subject building.  Finally, the owner contends that 
      the tenant's Fair Market Rent Appeal should have been dismissed as not 
      timely filed.

      In a response filed on December 11, 1991, the tenant contends that the 
      appeal should be denied because 1) the DHCR has already ruled and found 
      that the tenant's claim was timely; 2) the owner has engaged in 
      fraudulent acts against the tenant; 3) since apartment 6N is the subject 
      of a lawsuit it is inappropriate for use in a comparability study; 4) 
      prevailing rents submitted by the owner are for apartments in 
      neighborhoods which command higher rents; and 5) the tenant is entitled 
      to triple damages for "key money" paid directly to the owner.

      On February 24, 1992, the petitioner filed a supplement to its petition 
      for administrative review in which it stated in substance that from 
      February 1987 through August 1991, the tenant was not current with his 
      rent payment.

      After careful consideration, the Commissioner is of the opinion that 
      this petition should be denied.

      With respect to the comparability study, a review of the record reveals 
      that the answer forms sent to the owner contain instructions and 
      requirements for the correct submission of data for consideration of 
      comparability, including the need for information on a complete line of 

          FJ 410204 RO

      apartments.  The owner did not submit proof of service by certified mail 
      as was required.  Nor did the owner submit data on the complete "N" line 
      in the proceeding below.  Since an administrative appeal is not a de 
      novo proceeding, the data provided in the appeal cannot be considered in 
      this determination.

      The consideration of comparable rents in determining fair market rents 
      is governed by Section 2522.3 of the Code.  The owner's submission of 
      newspaper advertisements does not meet the legal requirements 
      established therein.

      With regard to the owner's contention that it is entitled to a rent 
      increase based upon uniqueness, the owner has not substantiated that the 
      subject apartment has unique features warranting a rent increase.

      The Commissioner notes that the Administrator allowed an increase of 
      $19.28 pursuant to Section 2522.4(a)(1) for improvements to the 
      apartment.  Code Section 2522.1(a)(2) details the correct procedure for 
      obtaining rent increase based upon major capital improvements.  The 
      owner neglected to meet the requirements of the Code and is not entitled 
      to a rent increase on the basis of major capital improvements.

      Accordingly, the Commissioner finds that the Administrator properly 
      determined the fair market rent.

      The Commissioner notes that the issue of the timeliness of the filing  
      of the tenant's complaint was previously determined under Docket # ED 
      410060 RT on March 1, 1991.  The owner failed to appeal the order and 
      thus is now precluded from challenging that determination.

      The tenant's contentions with respect to fraudulent acts and "key money" 
      are not germane to the order here under review.

      The owner's contention in its supplement to the PAR regarding the 
      tenant's payment of rent was not raised in the proceeding before the 
      Rent Administrator and cannot be considered for the first time on appeal 
      since this is not a de novo proceeding.  Further the tenant has stated 
      during the course of the proceeding that there has been a non payment 
      proceeding in court.  Accordingly such matter should be resolved in 

      Because this determination concerns lawful rents only through March 31, 
      1992, the owner is cautioned to adjust subsequent rents to an amount no 
      greater than that determined by the Rent Administrator's order plus any 
      lawful increases.

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

      ORDERED, that this petition be, and the same hereby is, denied and the 
      Rent Administrator's order be, and the same hereby is, affirmed.

                                      JOSEPH A. D'AGOSTA


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