FJ 410204 RO
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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
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 :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
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
tenant.
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
court.
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.
ISSUED:
JOSEPH A. D'AGOSTA
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