GA 610296-RO

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

      APPEAL OF                              DOCKET NO. GA 610296-RO

                                          :  DISTRICT RENT OFFICE
           Combined Associates, c/o          DOCKET NO. ZAG-610073-R
           Spring & Davis Real Estate       
           Mgmt.,                            TENANT: (The Estate of)          
                                                     Andrew Hammer
                            PETITIONER    : 


      On January 28, 1992, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on January 8, 1992 by 
      the District Rent Administrator, 92-31 Union Hall Street, Jamaica, 
      New York concerning the housing accommodations known as 2165 Chatterton 
      Avenue, Bronx, New York, Apartment No. 8E wherein the Rent Administrator 
      determined the tenant's fair market rent appeal.

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

      The applicable sections of the Law are Section 26-516 of the Rent 
      Stabilization Law and Sections 2522.3 and 2523.1 of the current Rent 
      Stabilization Code.

      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 by the filing in July, 1986 of 
      a rent overcharge complaint by the tenant, in which he stated that he 
      had commenced occupancy on November 15, 1985 at a rent of $435.00 per 
      month, pursuant to a lease commencing December 1, 1985, and that the 
      prior tenant was paying a rent of approximately $200.00.

      Among the documents submitted by the owner in answer was a copy of a DC- 
      2 notice of statutory decontrol, signed by Arthur Davis and stating "DC- 
      2 notice served by Thomas Tedeschi, Manager, Nov. 1, 1985," and a Senior 
      Citizen Rent Increase Exemption ("SCRIE") Order and Tax Exemption 
      Certificate.  The owner later submitted an affidavit of discontinuance 
      and withdrawal of the tenant's complaint, dated September 6, 1991 and 
      purportedly made by Matthew Hammer, administrator of the tenant's 
      estate.  It was signed by Charles Davis of Combined Associates and  
      notarized by Thomas P. Tedeschi.  In response, Michael Hammer stated 
      that he and his brothers did not wish to withdraw the complaint, and 
      that "there is NO Matthew Hammer."

      In an order issued January 8, 1992 the Administrator set the fair market 
      rent at $323.23 per month, this being a 20% Special Guidelines Order No. 

          GA 610296-RO

      17 increase over the 1984 Maximum Base Rent ("MBR"), without any fuel 
      cost adjustment since the 1985 adjustment had been suspended by a DHCR 

      In this petition Thomas P. Tedeschi, Managing Agent for Combined 
      Associates, contends in substance that the tenant's complaint was time- 
      barred because it was not made within 90 days of the physical delivery 
      of the DC-2 notice to the tenant on November 1, 1985; that the tenant's 
      statement in his complaint did not constitute a legally proper 
      allegation of a rent overcharge or of a rent in excess of the Fair 
      Market Rent; that the Fair Market Rent should have been determined on 
      the basis of the 1985, not 1984, MBR plus allowable fuel cost 
      adjustments; and that the tenant's action is time-barred by Civil 
      Practice Law and Rules Section 213(a), which provides that an action on 
      a residential rent overcharge shall be commenced within four years of 
      such overcharge, since a complaint to the DHCR does not constitute legal 
      action to satisfy the statute of limitations and since it has been more 
      than five years since the accrual of the tenant's cause of action.

      The Commissioner is of the opinion that this petition should be denied.

      Sections 2522.3 and 2523.1 of the Rent Stabilization Code, applicable to 
      complaints filed on and after April 1, 1984, provide in pertinent part 
      that the first tenant of an apartment previously subject to the Rent 
      Control Law may file a fair market rent appeal within 90 days of being 
      mailed, by certified mail, a prescribed notice form (DC-2) setting forth 
      the right to appeal the initial legal regulated rent.  

      On May 7, 1992 the DHCR requested the owner to provide proof of service 
      of the DC-2 notice.  In a response submitted on May 27, 1992, the owner 
      did not submit proof of service of the DC-2 notice by certified mail.
      The proof of service submitted by the owner consisted of an affidavit 
      which stated in part "I, Thomas Tedeschi being sworn, say . . .  On 
      November 1, 1985 I served the within DC-2 . . . by delivering a true 
      copy thereof personally to each person named below at the address 
      indicated."  The tenant's name and the address of the subject apartment 
      were then listed.  Thomas Tedeschi's unnotarized signature then appears 
      below the date of November 1, 1985.  On the line where the affiant's 
      signature should have appeared is the purported signature of Andrew 
      Hammer, with his name typed underneath.  Even if this were the tenant's 
      signature it would not constitute adequate proof of delivery of the DC- 
      2, since the tenant is not specifically acknowledging receipt.

      Further, in response to an earlier August 4, 1988 request to "[p]lease 
      submit a copy of the DC-2 notice along with proof of service to the 
      complaining tenant Andrew Hammer," the owner submitted only the DC-2 

      The owner also submitted a copy of the DC-2 notice in 1992.  Next to the 
      signature of Arthur Davis is the date "2/86," which might be thought to 
      refer to the month that Mr. Davis signed the form.  However, this date 
      of February, 1986 is on a copy of a form the original of which was 
      supposedly given to the tenant on November 1, 1985.  In addition, the 
      copy of the DC-2 form received from the owner on September 2, 1988 did 
      not have the "2/86" date, although in every other respect it appears to 
      be the same as the one received in 1992.  It is hard to see  how a DC-2 
      with a contemporaneous date of February, 1986 could be delivered to the 

          GA 610296-RO

      tenant in 1985 and yet not have the date appear on the form until 1992.

      The "proof of service" signed by Thomas Tedeschi states that he 
      personally delivered the DC-2 to the tenant on November 1, 1985 at the 
      subject apartment.  The tenant's complaint stated that he did not move 
      in until November 15, 1985 pursuant to a lease commencing December 1, 

      Based on the above, the Commissioner finds that the owner has failed to 
      prove service of the DC-2 notice so as to start the running of the 90 
      day period to file a fair market rent appeal.  Therefore, the 
      Commissioner finds that the tenant's complaint is effective to challenge 
      the initial legal regulated rent.

      The Commissioner notes that the Maximum Base Rent listed by the owner on 
      the DC-2 form was incorrect.  The 1984-85 Maximum Base Rent was $247.82, 
      not $435.00 as stated by the owner.  (The tenant's initial rent was 
      $435.00).   The DC-2 form was designed to give a tenant information to 
      use in deciding whether to file a fair market rent appeal.  A tenant 
      relying on the information furnished by the owner in this case would 
      have little reason to file such an appeal, since the fair market rent 
      was stated to be calculated above the rent actually paid by the tenant.  

      Regarding the owner's contention that the tenant's complaint does not 
      constitute a legally proper allegation of a rent in excess of the fair 
      market rent, the tenant was clearly challenging the lawfulness of his 
      rent.  When a tenant is the first tenant after decontrol, such challenge 
      is actually a challenge against the initial legal regulated rent, 
      otherwise known as a fair market rent appeal, and it is within the 
      DHCR's discretion to recognize and process it as such.  In addition, 
      this order has found that the owner has not proven the service of a DC-2 
      form on the tenant, notifying him that he was the first stabilized 
      tenant and had the right to file a fair market rent appeal.  The owner 
      should not be allowed to succeed in its claim that the tenant [unaware 
      of his status as the first stabilized tenant] should not be allowed to 
      have his complaint treated as a fair market rent appeal.

      Regarding the contention that the Fair Market Rent should have been 
      determined on the basis of the 1985, not 1984, MBR plus allowable fuel 
      cost adjustments, the Commissioner notes that MBR orders are issued on 
      a two year cycle, and that Special Guidelines Order Number 17 used by 
      the Rent Administrator provides that for dwelling units subject to Rent 
      Control on September 30, 1985, which subsequently became vacant after 
      September 30, 1985, the Special Guidelines amount to be utilized is 
      determining the fair market rent is 20% above the sum of the 1984-85 
      maximum base rent, as it existed or would have existed, plus the current 
      allowable fuel cost adjustments as established on Rent Control forms.

      No fuel cost adjustment is allowed because Order No. ZBC0850001-FR 
      suspended the total accumulated fuel cost adjustment for 1985 due to the 
      owner's failure to file a timely fuel cost decrease report.  Accordingly 
      the 1984-85 MBR was correctly used to establish the fair market rent in 
      this case.  

          GA 610296-RO

      Regarding the owner's contention that an action on a residential rent 
      overcharge has a statute of limitations of four years: Civil Practice 
      Law and Rules Section 213(a), which provides that "[a]n action on a 
      residential rent overcharge shall be commenced within four years of such 
      overcharge", is not relevant to this proceeding since it is not an 
      "action".  CPLR Section 101 provides that" [t]he civil practice law and 
      rules shall govern the procedure in civil judicial proceedings in all 
      courts of the state and before all judges, except where the procedure is 
      regulated by inconsistent statute.  "Generally speaking, the DHCR and 
      the Courts have concurrent jurisdiction to decide complaints filed under 
      the Rent Stabilization Law and Code, although the Courts will usually in 
      the first instance defer to the administrative agency in its areas of 
      expertise.  For his remedy the tenant chose the administrative agency 
      rather than the Courts.  Any resort the tenant's estate might now have 
      to the Courts regarding the lawful rent would not be an action on the 
      lease contract, but rather a CPLR Article 78 petition against the 
      administrative agency determination.  While there is a time limit to 
      file such a legal proceeding, the time runs from the date of the 
      agency's order and not from the date of either an overcharge or of an 
      administrative complaint.

      Because a senior citizen rent increase exemption (Docket No. 210710) was 
      effective from at least January 1, 1988 to November 30, 1988, a copy of 
      this order is being sent to the N.Y.C. Department for the Aging, SCRIE 
      Division, so that an appropriate adjustment can been made in the real 
      estate tax abatement the owner has been granted, if so warranted.

      The owner is cautioned to adjust the rent, in leases after those 
      considered by the Administrator, to amounts no greater than that 
      determined by the Administrator's order plus any lawful increases, and 
      to register any adjusted rents with the Administrator's order being 
      given as the reason for the adjustment.  A copy of this determination is 
      being mailed to the tenant-in-occupancy.

      If the owner does not take appropriate action to comply with this order 
      within sixty days from the date of issuance of this order, the tenant's 
      estate may bring an appropriate action in a court of competent 

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

      ORDERED, that this petition be, and the same hereby is, denied and that 
      the District Rent Administrator's order be, and the same hereby is, 
      affirmed.  The lawful stabilization rent is $323.00 per month in the 
      lease from December 1, 1985 to November 30, 1987.

                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner

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