FK510228RO

                                  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
          APPEAL OF                              DOCKET NO. FK510228RO
                                              :  DRO DOCKET NO. U000390R
             PHIPPS HOUSES SERVICES, INC.        TENANT: MARIA DEL CARMEN
                                                         GARCIA
                                PETITIONER    : 
          ------------------------------------X                             
           ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN 
          PART


               On November 7, 1991, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          October 4, 1991, by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as 
          600 West 169th Street, New York, New York, Apartment No. 66, wherein 
          the Rent Administrator determined that the owner had overcharged the 
          tenant.

               The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2526.1 of the Rent Stabilization Code.

               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 issue raised by the administrative appeal.  

               This proceeding was originally commenced in January, 1985 by 
          the tenant's filing a complaint of rent overcharge.  In such 
          complaint, the tenant stated in substance that she first moved to 
          the subject apartment on July 1, 1981 at a rental of $380.00 per 
          month and that she had never been served with a copy of the 
          apartment registration form.

               The owner was served with a copy of the tenant's complaint and 
          afforded an opportunity to respond.  The owner was also directed in 
          notices from the DHCR dated October 27, 1986, April 27, 1987 and May 
          6, 1987, to submit proof that the tenant was served with the April 
          1, 1984 apartment registration.  Such proof was specifically stated 
          to be: Tenant's signature acknowledging receipt of the Apartment 
          Registration (RR-1 Form) and showing the date of receipt; or U.S. 
          Post Office "Carrier Route Pre-Sort" service form listing the 
          apartment number or address of the premises; or U.S. Post Office 
          "Acceptance of Registered, Insured, C.O.D. and Certified Mail" Form 
          #PO-3877, signed and dated and listing the tenant's name and 
          address, including the apartment number.  The owner was also advised 
          that if it was unable to provide proof of service as described 









          FK510228RO




          above, it must submit a complete rental history from April 1, 1980 
          or the date the last rent controlled tenant vacated the apartment, 
          whichever occurred later.  The owner submitted a rental history from 
          July 1, 1980, and did not submit the required proof of service of 
          the RR-1 Form.

               In Order Number U000390R, the Rent Administrator determined 
          that the owner had failed to establish that the subject apartment 
          was initially registered  and failed to submit the required rental 
          history from April 1, 1980.  Accordingly, the Rent Administrator 
          used established default procedures to establish an initial legal 
          regulated rent of $283.19 effective July 1, 1981; froze the rent at 
          $283.19 through June 30, 1989; and found a total rent overcharge of 
          $43,146.10 from July 1, 1981 through June 30, 1989 including excess 
          security and treble damages on that portion of the rent overcharge 
          occurring on and after April 1, 1984.

               In this petition, the owner alleges in substance that it did 
          submit a complete rental history in that the subject apartment was 
          rent controlled until April 5, 1980 and the July 1, 1980 lease of 
          the prior tenancy was the first rent stabilized lease for the 
          subject apartment.  In support of such contention, the owner 
          submitted a moving notice from the managing agent which confirms 
          that the rent controlled tenant Felix Molina had moved out as of 
          April 5, 1980; a confirmation of a new stove purchase for the 
          subject apartment dated June 26, 1980 which states "vacancy new 
          tenant" and lists the new tenant's name as "Joanne Falciano"; and 
          reference letters procured by the owner from April - June 1980 from 
          the banks and employers of three prospective tenants - Falciano, 
          Pollack, and Ushay - two of whom eventually rented the subject 
          apartment effective July 1, 1980.  The owner's petition did not 
          address the issue of the failure to establish service of the RR-1 
          Form on the tenant herein.

               In responses to the owner's petition, the tenant stated in 
          substance that the owner has not established that the subject 
          apartment was vacant from April 1, 1980 to July 1980; that it is 
          inappropriate to consider the owner's documentary evidence as it was 
          not previously submitted; that reasonable attorney's fees be 
          awarded; and that if the DHCR finds that the Rent Administrator 
          erred in calculating the maximum legal rent; the DHCR should follow 
          the rule enunciated in Smitten v. 56 MacDougal Street Co., 167 A.D. 
          2d 205, 561 N.Y.S. 2d 585 (1st Dept. 1990) and find that the maximum 
          legal rent is equal to the last rent lawfully charged under rent 
          control.

               In a reply to the tenant's responses dated November 23, 1993, 
          the owner for the first time submitted alleged proof of service of 
          the RR-1 Form on the tenant herein.  Such proof consisted of a copy 
          of the RR-1 Form listed as prepared on June 4, 1984 but not listing 
          the April 1, 1984 rent and listing the apartment as "exempt" rather  






          FK510228RO


          than as rent controlled or rent stabilized; and a copy of a 
          certified mail form indicating that the tenant herein had signed for 
          something on September 12, 1984.

               The Commissioner is of the opinion that this petition should be 
          granted in part.

               Rent control records for the subject apartment establish that 
          the last rent controlled tenant was a"Molina" and that he occupied 
          the subject apartment at least through 1979.  Records in the 
          proceeding herein disclose that the first lease submitted by the 
          owner for the subject apartment was dated June 26, 1980 and 
          commenced July 1, 1980 for tenants Falciano, Reydal, and Pollack.  
          Records also show that the tenant herein moved to the subject 
          apartment as a subtenant in July, 1981.  Based on the evidence 
          submitted by the owner on appeal that it was considering renting the
          subject apartment to two of the three tenants listed above during 
          the period from April through June 1980, the Commissioner considers 
          that the owner has established that the first stabilized lease was 
          the one effective July 1, 1980 and that the apartment was not rented 
          during the period from April 5, 1980 when the rent controlled tenant 
          vacated up through June 30, 1980.  Accordingly, since in the 
          proceeding before the Rent Administrator, the owner did submit a 
          complete rental history from the date of decontrol as confirmed by 
          rent control records and evidence submitted by the owner on appeal; 
          the owner cannot be said to have defaulted in its obligation to 
          submit said rental history.  Therefore, the initial lawful 
          stabilization rent should have been listed as the $380.00 in the 
          July 1, 1980 lease and not established based on default procedures.

               With regard to the April 1, 1984 initial rent registration, 
          DHCR records indicate that DHCR was served with the initial 
          apartment registration.  However, in her complaint, the tenant 
          stated that she did not receive a copy of the RR-1 Form as required 
          and the owner failed to establish service in accordance with one of 
          the three methods outlined above although afforded an opportunity to 
          do so in the proceeding before the Rent Administrator.  Since this 
          is not a de novo proceeding, the owner's evidence on this point 
          during the appeal proceeding cannot properly be considered.  
          Moreover, the proof submitted on appeal is not sufficient as it does 
          not consist of one of the three approved methods and the RR-1 Form 
          submitted on appeal is incomplete - does not list the April 1, 1984 
          rent nor give any reason why the subject apartment is listed as 
          exempt.  Accordingly, the rent must be frozen at the amount in 
          effect on April 1, 1984 pursuant to Section 2528.4 of the Rent 
          Stabilization Code until the owner establishes service of the 
          initial RR-1 Form on the tenant herein.  The late filing of the 
          registration (in this case service of the RR-1 Form) will result in 
          the prospective elimination of the penalty (freezing of the rent).






               Taking the above factors into account, the Commissioner has 
          recalculated the lawful stabilization rents and the amount of the 







          FK510228RO

          rent overcharge.  The lawful stabilization rents and the amount of 
          the rent overcharge are set forth on the amended rent calculation 
          chart attached hereto and made a part hereof.

               With regard to the tenant's contention that attorney's fees 
          should be awarded, it is noted that the tenant did not file a 
          petition for administrative review of her own and this issue cannot 
          properly be considered as part of the owner's petition.  It is also 
          noted that the decision in the Smitten case cited by the tenant in 
          her answer is not applicable to the situation herein.  Smitten dealt 
          with a situation involving a complaint by a first rent stabilized 
          tenant where the owner had not registered the initial rent with the 
          DHCR - factors not present in the case at bar.

               The owner is directed to reflect the findings and 
          determinations made in this order on all future registration 
          statements, including those for the current year if not already 
          filed, citing this order as the basis for the change.  Registration 
          statements already on file, however, should not be amended to 
          reflect the findings and determinations made in this order.  The 
          owner is further directed to adjust subsequent rents to an amount no 
          greater than that determined by this order plus any lawful 
          increases.

               The Commissioner has determined in this Order and Opinion that 
          the owner collected overcharges of $9,414.42.  This Order may, upon 
          expiration of the period for seeking review of this Order and 
          Opinion pursuant to Article Seventy-eight of the Civil Practice Law 
          and Rules, be filed and enforced as a judgment or not in excess of 
          twenty percent per month of the overcharge may be offset against any 
          rent thereafter due the owner.  Where the tenant credits the 
          overcharge, the tenant may add to the overcharge, or where the 
          tenant files this Order as a judgment, the County Clerk may add to 
          the overcharge, interest at the rate payable on a judgment pursuant 
          to Section 5004 of the Civil Practice Law and Rules from the 
          issuance date of the Rent Administrator's Order to the issuance date 
          of the Commissioner's Order.

               If the owner has already complied with the Rent Administrator's 
          order and there are arrears due to the owner as a result of the 
          instant determination, the tenant is permitted to pay off the 
          arrears in 24 equal monthly installments.  Should the tenant vacate 
          after the issuance of this order or have already vacated, said 
          arrears shall be payable immediately.











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



          FK510228RO

               ORDERED, that this petition for administrative review be, and 
          the same hereby is, granted in part, and, that the order of the Rent 
          Administrator be, and the same hereby is, modified in accordance 
          with this order and opinion.  

          ISSUED



                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner




                     




































    

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