GE410070RO
                             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  SJR 6785
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. GE410070RO

                                          :  DISTRICT RENT OFFICE
                                             DOCKET NO. ZCD410120RP
           227 East 57th Street Assoc.,                 (TA11034, CTA04888)
                                            
                                             TENANT: Judith Beardsall         
                 
                            PETITIONER    : 
      ------------------------------------X                             

           ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


      On May 4, 1992, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on April 3, 1992, by the 
      Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 227 East 57th Street, 
      New York, New York, Apartment No. 3B, wherein the Rent Administrator 
      affirmed its prior order issued October 18, 1985, which determined the 
      fair market rent pursuant to the special fair market rent guideline 
      promulgated by the New York City Rent Guidelines Board for use in 
      calculating fair market rent appeals.

      Subsequent thereto, the petitioner-owner filed a petition in the Supreme 
      Court pursuant to Article 78 of the Civil Practice Law and Rules 
      requesting that the "deemed denial" of the petitioner's Administrative 
      appeal be annulled.  This proceeding was then remitted to the Agency for 
      a determination of the petitioner's appeal. 

      The Commissioner notes that this proceeding was filed prior to April 1, 
      1984.  Sections 2526.1 (a) (4)  and 2521.1 (d) of the Rent Stabilization 
      Code (effective May 1, 1987) governing rent overcharge and fair market 
      rent proceedings provide that determination of these matters be based 
      upon the law or code provisions in effect on March 31, 1984.  Therefore, 
      unless otherwise indicated, reference to Sections of the Rent 
      Stabilization Code (Code) contained herein are to the Code in effect on 
      April 30, 1987.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Section 26-513 of the Rent Stabilization Law.

      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 prior to March 31, 1984 by the 
      filing of a fair market rent adjustment application (hereafter FMRA) by 







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      the tenant who took occupancy of the subject apartment on September 10, 
      1979 at a rental of $700.00 per month

      The owner was served with a copy of the tenant's application and 
      afforded an opportunity to submit June 30, 1974 or post June 30, 1974 
      comparability data for determining the fair market rent of the subject 
      apartment and to submit proof of any improvements made in the subject 
      apartment.  

      In Order Number CTA0488 issued October 18, 1985, the Rent Administrator 
      adjusted the initial legal regulated rent by establishing a fair market 
      rent of $418.43 (excluding comparability or increases for improvements) 
      and directed the owner to refund $18,646.32 in excess rent covering the 
      period September 1, 1979 through August 31, 1984.

      The owner filed a petition for administrative review under docket 
      ARL6350L which was rejected on February 27, 1986 citing the owner's 
      failure to submit an affidavit or other proof of service of the 
      petition.  The owner instituted an Article 78 proceeding.  However the 
      Commissioner reconsidered and reopened the owner's petition on May 28, 
      1987 prior to the court rendering a decision because the owner's 
      petition timely filed under ARL6350L was found to contain the proper 
      proof of service.  On April 26, 1988, the Commissioner remanded the 
      proceeding to the Rent Administrator for reconsideration since all the 
      files could not be located.

      After reopening notices and copies of the Commissioner's order of remand 
      were served on the tenant and the owner's attorney on January 6, 1992, 
      the Rent Administrator proceeded to reprocess the tenant's FMRA.  Copies 
      of the FMRA notice advising the owner of comparability requirements for 
      FMRAs filed prior to April 1, 1984 were sent to the owner's prior 
      managing agent on February 5, 1992.

      In response to a directive of the Court to issue an order by March 27, 
      1992, pursuant to an Article 78 mandamus proceeding initiated by the 
      tenant, the Rent Administrator sent a Final 10-day notice to submit 
      comparability data to the owner's prior managing agent on March 4, 1992, 
      and denied the request for an extension on March 26, 1992 by the owner's 
      current managing agent.

      On April 3, 1992, the Rent Administrator issued the order appealed 
      herein which affirmed his prior determination of October 18, 1985.

      The tenant purchased the subject apartment in August 1984 under a 
      cooperative ownership plan for the premises which was declared effective 
      June 27, 1983.

      In this petition, the owner contends in substance that the Rent 
      Administrator arbitrarily denied the owner's request for an extension to 
      respond to the March 4, 1992 Final notice to submit comparability data; 
      that the notice had been addressed to the prior agent (Sulzberger - 
      Rolfe) and not forwarded to them until March 12, 1992; that the February 
      5, 1992 notice of reopening with the FMRA notice was also sent to 
      Sulzberger - Rolfe; that the proceeding was remanded by the Commissioner 
      in his prior order dated April 26, 1988 but that no processing was 
      initiated until January 1992 and then processed with undue haste; that 
      not withstanding the denial for an extension the owner had previously 
      submitted comparability data which was in the file in connection with 


          GE410070RO

      the owner's prior administrative review and Article 78 proceeding; that 
      neither the January 17, 1992 nor the February 5, 1992 notice of 
      reopening with the FMRA notice were received by the current managing 
      agents; that the comparability submission was sent on April 3, 1992 but 
      that the order was issued the same day without considering the owner's 
      April 3, 1992 submission which is being resubmitted with the instant 
      petition; that in DHCR's March 26, 1992 denial of the owner's request 
      for extension the owner had been advised to make a submission "as soon 
      as possible"; that the owner received the DHCR denial on April 1, 1992 
      and complied by submitting the comparability data on April 3, 1992 which 
      was "as soon as possible"; that due to the extensive amount of time to 
      process the instant case, the owner was compromised by having to 
      research records going back to 1979, a period of 13 years, in only 10 
      days from the Rent Administrator's notice of March 4, 1992; that this 
      delay and subsequent denial deprived the owner of due process; that 
      treble damages may not be found in the proceeding because the complaint 
      is a FMRA for which it is well settled in law that no treble damages may 
      be imposed and that if there is any question as to the fact that a fair 
      market rent was charged for the subject apartment in September 1979, 
      then a hearing should be held by the Agency.  The owner's comparability 
      submission was included with its petition containing various leases for 
      apartments 3D, 5B, 3C, 6H, 2C, 2B, 5B, 4B, 8B and 11B, a DC-2 for 3C and 
      a floor plan of the 2nd thru 9th floors indicating apartment layout for 
      the various lines.

      In answer to the owner's petition, the tenant stated in substance that 
      the owner's petition is without merit; that the procedural history of 
      this case is almost 10 years old during which time the owner was given 
      ample time and opportunity to respond; that the owner has participated 
      fully in this proceeding; that due to the owner's subsequent actions 
      challenging the 1985 order granting her fair market rent adjustment, she 
      has extensive legal fees for which she should be reimbursed and that new 
      material submitted should not be considered on appeal.

      In reply to the tenant's answer, the owner contends that the initial 
      determination was improperly issued and therefore remanded; that clearly 
      the owner was not afforded ample time to respond nor was there adequate 
      consideration of the matter; that the tenant failed to contest the 
      owner's comparability submission on the merits and that an award of 
      legal fees to the tenant is not warranted because it is apparent that 
      the tenant was not represented by an attorney in the DHCR proceedings 
      but only in an action to collect monies from the owner based on a 
      judgment pursuant to an order wrongfully granted by DHCR.

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

      Section 26-513 of the Rent Stabilization Law provides, in pertinent 
      part, that fair market rent adjustment applications are to be determined 
      by the use of special fair market rent guidelines orders promulgated by 
      the New York City Rent Guidelines Board and by the rents generally 
      prevailing in the same area for substantially similar housing 
      accommodations.  In order to determine rents generally prevailing in the 
      same area for fair market rent appeal cases filed prior to April 1, 
      1984, it is DHCR procedure to allow owners to submit June 30, 1974 fair 
      market rental data for complete lines of apartments, beginning with the 
      subject line.  The average of such comparable rentals will then be 
      updated by annual guidelines increases.  Alternatively, DHCR procedure 
      allows owners to have comparability determined on the basis of rents 







          GE410070RO

      charged after June 30, 1974.  In order to use this method, owners were 
      required prior to November 1, 1984 to submit rental history data for all 
      stabilized apartments in the subject premises and subsequent to November 
      1, 1984 to submit such data for complete lines of apartment beginning 
      with the subject line.  Post June 30, 1974 rent data will be utilized if 
      the comparable apartment was rented to a first stabilized tenant within 
      one year of the renting of the subject apartment and if the owner 
      submits proof of service of a DC-2 Notice or apartment registration form 
      indicating that the rent is not subject to challenge.

      An examination of the record in this case discloses that the January 17, 
      1992 reopening notice served on the owner's attorney was mailed to a 
      former address (70 Lafayette Street) and was returned by the USPS; that 
      the reopening notice along with the FMRA notice was sent to the owner's 
      prior managing agent on February 5, 1992; that a copy of the March 4, 
      1992 final notice which was also addressed to the prior agent was 
      forwarded to the current managing agent, as admitted in the March 12, 
      1992 request for an extension and a copy of a comparability submission 
      date-stamped as received by DHCR on April 7, 1992 was found in the case 
      folder.

      Essentially, however, the same cited comparable apartments and 
      comparability data submitted on April 7, 1992 was also submitted with 
      the owner's instant petition and had been submitted with the owner's 
      previous petition (ARL6350L) which was in the record before the Rent 
      Administrator during the processing of the order appealed herein.  It is 
      unclear from the record whether the Rent Administrator considered the 
      comparability submission in the file prior to the April 3, 1992 
      affirmation of his prior determination issued October 18, 1985.

      Therefore, the Commissioner is of the opinion that it is appropriate to 
      consider the owner's comparability submission included with both the 
      instant petition and the prior petition dated November 19, 1985. 

      A review of the comparability data submitted by the owner with its 
      petition dated November 19, 1985 and the instant petition discloses that 
      the apartments cited (3D, 3C, 5B, 2C and 6H) fail to meet the criteria 
      for post-June 30, 1974 comparability in the following ways, any one of 
      which would be a sufficient reason to disallow the submission: 

      A)   No proof of service of either a DC-2 notice or a RR1 forms was 
           submitted for the cited apartments.

      B)   The owner's citation of the rents contained in the leases for the 
           cited apartments failed to disclose if these rents were pursuant to 
           initial leases commencing one year before or after the initial 
           lease for the subject apartment.

      C)   No copy of either a DC-2 or RR1 was submitted for the cited 
           apartments with the exception of apartment 3C for which the owner 
           did submit a DC-2 form.  However, the DC-2 notice reveals that 
           apartment 3C was first rented in December 1980 to a rent stabilized 
           tenant which is more than the permissible one year after the 
           initial lease for the subject apartment which commenced September 
           1, 1979.

      D)   The owner failed to submit the rent history of all stabilized 
           apartments in the "comparable "H", "D" and "C" lines although the 


          GE410070RO

      complete subject "B"line was submitted.

      E)   The rent of comparable apartment 3D, is currently pending 
           Commissioner's review under docket AL410334RO pursuant to a DHCR 
           order which reduced the lawful rent of the subject apartment, 
           therefore because it is not a final rent, it may not be considered 
           in a comparability study.

      The owner has not submitted complete June 30, 1974 rental data for 
      comparability purposes.  Accordingly, the Rent Administrator correctly 
      did not consider comparability data in determining the initial legal 
      regulated rent.  

      The Commissioner rejects as without merit the owner's contention that it 
      was afforded insufficient time to respond.  The owner was served with a 
      copy of the reopening notice and FMRA package at the last address and 
      agent registered with DHCR prior to the issuance of the April 3, 1992 
      order (although the 1992 registration lists Omma Properties rather than 
      Sulzberger - Rolfe, who is listed in registrations as the owner from 
      1985 - 91, DHCR records indicate that information was received June 30, 
      1992 after the issuance of the order).  Further, as the owner's 
      attorneys have stated, they were forwarded the final notice of March 4, 
      1992 by Sulzberger - Rolfe and it would be reasonable and consistent 
      procedure for Sulzberger - Rolfe to have also forwarded the Rent 
      Administrator's notice of February 5, 1992.  Moreover, the submission 
      dated April 3, 1992, received on April 7, 1992, was untimely since it 
      was sent in excess of 21 days from the date of March 12, 1992, the date 
      on which the owner contends it received the Rent Administrator's final 
      notice dated March 4, 1992.

      Moreover, the Commissioner notes that the owner's submission of 
      comparability data both below and on appeal was not useable, for reasons 
      cited previously, and therefore the Rent Administrator properly did not 
      use the cited apartments in a comparability study.

      As to the owner's contention that treble damages are not warranted and 
      that a hearing is, the Commissioner rejects both contentions as not 
      pertinent because treble damages were in fact properly not imposed by 
      the Rent Administrator as inapplicable to a FMRA and no allegation as to 
      the facts in the case are in dispute which require adjudication in a 
      hearing.

      With regard to the tenant's contention that she should have been awarded 
      attorney's fees, it is noted that pursuant to Section 2526.1(d) of the 
      Rent Stabilization Code, the assessment of attorney's fees is 
      discretionary.  Under the circumstances of this case, including the 
      arguments raised by the parties in support of their contentions, the 
      Commissioner deems it inappropriate to award attorney's fees.  Further, 
      the tenant did not raise the issue of attorney's fees in the proceeding 
      before the Rent Administrator and did not file her own petition so that 
      this matter cannot properly be considered for the first time on 
      administrative appeal in a proceeding brought by the owner.

      Accordingly, the Rent Administrator's order was warranted.

      In the event the owner does not take appropriate action to refund the 
      excess rent, as shown in the Administrator's order, within 60 days from 
      the date of this order, the tenant may seek to satisfy her claim in a 







          GE410070RO

      court of competent jurisdiction.

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

      ORDERED, that this petition for administrative review be, and the same 
      hereby is, denied, and, that the order of the Rent Administrator be, and 
      the same hereby is, affirmed.



      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner
    

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