Adm. Rev. Docket Number FJ 220121 RO

                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433
          ----------------------------------X  SJR 6294
          APPEAL OF                            DOCKET NO.: FJ 220121 RO
            CATALINA LOPEZ            
                                               DRO DOCKET NO.:     
                                                      DJ 220009 OE   
                                PETITIONER     TENANT: JAMES MAGLIOZZO


          The above-named  petitioner-owner  timely  filed  a  Petition  for
          Administrative Review against an order issued on October 17, 1991,
          by the Rent Administrator  at  Gertz  Plaza,  Jamaica,  New  York,
          concerning housing accommodations known as the top floor apartment 
          at 1644 65 Street, Brooklyn, New York, wherein  the  Administrator
          dismissed the owner's application for a  Certificate  of  Eviction
          under section 2204.9(a)(4) of the Rent and Eviction Regulations. 

          Subsequently, the Petitioner filed a petition  in  Supreme  Court,
          Kings  County  (Index  Number  6580/92  was   assigned   to   that
          proceeding), under Article 78 of the New York Civil  Practice  Law
          and Rules, requesting that the "deemed denial" of the Petitioner's 
          Petition for Administrative Review be annulled.

          Thereafter, pursuant to the order of  the  Hon.  Gerald  S.  Held,
          Justice of the Supreme Court, dated June 4, 1992, the  matter  was
          remanded to the Division for further processing upon the condition 
          that if the Division did not make a decision on  the  Petitioner's
          administrative appeal on or before August 14, 1992,  the  Petition
          for Administrative Review would be deemed granted and the Division 
          would be deemed directed to issue a Certificate of Eviction. 

          The Commissioner has reviewed all of the evidence  in  the  record
          and has carefully considered that portion of the evidence relevant 
          to the issues raised in the administrative appeal.

          The issue in this appeal is whether the Administrator was  correct
          in denying the owner's application based  on  the  Administrator's
          finding that there is a reasonable possibility that the owner  can
          make a net return of 8 1/2%  of  the  assessed  valuation  of  the
          subject property without recourse to the eviction sought.

          This proceeding was originally commenced on  October  11,1989,  by
          the owner's filing an application for a  Certificate  of  Eviction
          under Section 2204.9(a)(4) of the Rent  and  Eviction  Regulations
          (the Regulations), which are issued under the New York  City  Rent
          (Control) Law (the Rent  Law).  In  that  application,  the  owner

          Adm. Rev. Docket Number FJ 220121 RO
          alleged that the tenant and his wife were approximately  67  years
          of age, that  they  had  resided  in  the  subject  apartment  for
          approximately 39 years and that they paid $45.00 a month in  rent.
          The owner further alleged that  the  subject  building  is  a  one
          family house, that she resides therein with her  disabled  son  in
          cramped circumstances and that an 8 1/2% return cannot be realized 
          from the rent paid by the subject  rent  controlled  tenants.  The
          owner further alleged that she intends to permanently withdraw the 
          subject apartment from  the  rental  market  and  to  occupy   the
          subject apartment along with the portion of the  subject  building
          she already, currently occupies.

          In answer to the owner's application, the tenant alleged  that  he
          has occupied the subject apartment since September of  1947;  that
          as soon as the owner purchased the  building in 1982  she  engaged
          in a course of conduct that constituted harassment and  which  was
          designed to wrongfully deprive him and his  wife of their right to 
          occupy  the  subject  apartment.  A  prior   application   for   a
          Certificate of Eviction had  been  filed  by  the  owner  and  was
          denied based on the grounds that the tenant was over 62  years  of
          age and he and his wife had resided in the apartment for more than 
          20 years. The tenant had asserted  that  said  facts  should  have
          provided a basis for denying the instant application  below.   The
          tenant had further alleged that said application should be  denied
          in accordance with Section 2204.4(a) of the Regulations as  likely
          to result in the circumvention or evasion of  the  City  Rent  Law
          and the Regulations. The tenant had  further  asserted  that  said
          application should be denied on the grounds that the owner lacks a 
          good faith intention to withdraw the subject  apartment  from  the
          market; that there is a reasonable  possibility  the  owner  could
          earn a return of 8 1/2% without resort  to  the  eviction  sought;
          that economic relief is  available  to  the  owner  under  various
          sections of the Rent Law and  the  Regulations;  and  the  owner's
          application should be denied on the grounds  that  the  owner  has
          violated Section 2204.2(b) in harassing  the  tenant.  The  tenant
          asked for a hearing in the event the Administrator was inclined to 
          grant the owner's application.

          The owner responded  to  the  tenant's  answer  by  asserting,  in
          substance, that it should not  have  been  considered  as  it  was
          untimely; that she had not harassed the tenants; that the  tenants
          had caused damage to the owner's building; and that the owner  was
          entitled to, and should be granted, the relief sought.  The  owner
          also asserted that if the tenant's answer was  to  be  considered,
          the owner sought a hearing.

          The Administrator denied the owner's application  on  the  grounds
          that the owner does not meet the prerequisites set  forth  in  the
          Sound Housing Law for  the  relief  requested  in  that  an  audit
          conducted by the Division indicated that  there  is  a  reasonable
          possibility that the owner could realize a  net  return  equal  to
          8 1/2 % of the assessed valuation of the subject building  without
          recourse         to         the         subject          eviction.

          In the  Petition,  the  owner,  in  substance,  charges  that  the
          Administrator's order represents  a  summary  disposition  of  the
          application which was issued in contravention  of  the  applicable
          law and the Regulations in a last minute  effort  to  comply  with
          the April 25, 1991 order of the Hon. Barry  Hurowitz,  Justice  of

          Adm. Rev. Docket Number FJ 220121 RO
          the Supreme Court, wherein the Administrator had been directed  to
          determine the owner's application within a certain period of time. 
          The owner reiterates the contention that a return of 8 1/2% cannot 
          be realized on the subject building with a rental income of $45.00 
          per month.

          In the tenant's answer opposing the Petition, the tenant  asserts,
          in  substance,  that  the  Petition  should  be  denied  and   the
          Administrator's order should be affirmed.

          The Commissioner is of the opinion that  the  Petition  should  be

          The Commissioner notes that the proceeding hereinbelow was brought 
          under Subsection 2204.9(a)(4) of the Regulations;  and  that  said
          Subsection reads, in pertinent part, as follows:

               (a) A certificate [of eviction] shall  be  issued  where
               the landlord establishes that he  seeks  in  good  faith
               permanently to withdraw occupied housing  accommodations
               from both the housing and  nonhousing  markets,  without
               any intent to rent or sell all or any part of  the  land
               or structure, and:

                                     *    *    *    *    *

                   (4) that the  continued  operation  of  the  housing
               accommodation would impose ... undue hardship upon 
               the landlord.

          The Commissioner further notes that Subsection 2204.4(g)  of  the
          Regulations reads as follows:

               (g)No application for a certificate of  eviction  shall
               be  granted   under   sections   2204.7,   2204.8   and
               2204.9(a)(2)  and  (4)  of  this   Part,   unless   the
               administrator determines, after a hearing, that:

                (1)  there  is  no  reasonable  possibility  that  the
               landlord can make a net annual return of 8 1/2  percent
               of the  assessed  valuation  of  the  subject  property
               without recourse to the eviction sought; and

               (2) neither the landlord nor immediate  predecessor  in
               interest has intentionally  or  willfully  managed  the
               property to impair the landlord's ability to earn  such

          The Commissioner finds that the Administrator's order  was  based
          on an audit performed by the DHCR in accordance  with  the  Sound
          Housing Law and that  the  method  employed  in  said  audit  for
          determining whether there is any reasonable possibility that  the
          owner could realize a return of at least 8 1/2%  on  the  subject
          building without recourse to the subject eviction was  reasonable
          and in accordance with the applicable Law and Regulations.  

          Adm. Rev. Docket Number FJ 220121 RO

          The Commissioner therefore finds  that  the  Petition  should  be

          THEREFORE,  pursuant  to  all  of  the  applicable  statutes  and
          regulations, it is

          ORDERED, that this Petition be, and the same hereby is denied and 
          that the  Administrator's  order  be,  and  the  same  hereby  is


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner

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