GF130082RO
                                  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.:  GF130082RO
                                                  
          TRB-ESSEX HOUSE CORP.                   RENT
                                                  ADMINISTRATOR'S DOCKET 
                                                  NO.: FK130024RK
                                  PETITIONER            
          ----------------------------------x


            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
               REVOKING ADMINISTRATOR'S ORDER AND REINSTATING PRIOR RENT     
                                     RESTORATION ORDER

               On June 12, 1992 the above named petitioner-owner filed a 
          Petition for Administrative Review against an order of the Rent 
          Administrator issued May 8, 1992 concerning various housing 
          accommodations located at 42-15 43rd Avenue, Sunnyside, N.Y., 
          wherein the Administrator revoked a prior rent restoration order 
          for all rent stabilized tenants based on a finding that repairs had 
          not been completed and modified the order to exclude $10.00 from 
          the rent restoration for rent controlled tenants to reflect the 
          current amount for various cracked hallway window panes and loose 
          handles.

               The Commissioner has reviewed the record and carefully 
          considered that portion relevant to the issues raised by this 
          appeal.

               The record reveals that the on June 19, 1990 the owner filed 
          an Application for Rent Restoration (Docket No. EF130153OR) stating 
          that all services for which a rent reduction order had been issued 
          on July 27, 1987 (Docket No. AK130035B) had been restored.  The 
          Commissioner notes that there was a prior rent restoration 
          application filed by the owner, which resulted in an order issued 
          on August 17, 1987 wherein the Administrator ordered that the rents 
          of rent controlled tenants of the building be restored by $8.00 per 
          month based on a finding that services had been partially restored 
          (Docket No CA130209OR).  The August 17, 1987 order was issued 
          without prejudice to the owner's right to refile for rent 
          restoration of the remaining $12.00 per month for rent controlled 
          tenants as well as restoration of the rents of rent stabilized 
          tenants.  The application bearing Docket No. EF130153OR is such a 
          refiling. 













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               The tenants were served with a copy of the application and 
          afforded an opportunity to respond. The tenants filed responses 
          both individually and collectively, wherein they stated that the 
          owner had not restored services and requested that the application 
          be denied.
           
               The Administrator ordered a physical inspection of the subject 
          building.  The inspection was conducted on November 2, 1990 and 
          revealed the following:

                    1.   Cracked window pane on second floor left window on 
                         right side of elevators in left wing of building,

                    2.   Missing window handles on second and third floors 
                         of right wing of building.

          The inspector also reported that there was no evidence of water 
          damage to bulkhead walls throughout the building.  Additional items 
          were described in the inspector's report but the only issues to be 
          resolved in this rent restoration proceeding concerned the 
          bulkheads, windows and window handles building-wide.

               On November 29, 1990 the Administrator sent a notice to the 
          owner advising that the two conditions set forth above still 
          existed and affording 20 days to respond with evidence that these 
          specific conditions had been repaired.

               On December 10, 1990 the Administrator received a response 
          from the building's new management company, stating that the 
          building was in receivership.  The managing company asserted that 
          repairs to the second floor window pane and the missing second and 
          third floor handles had been completed.  Annexed to this letter 
          were affidavits from the building superintendent and managing 
          agent.  Both parties stated that the windows and window handles 
          described above were repaired.  

               The Administrator issued an order on January 15, 1991 and 
          granted full rent restoration to rent controlled and rent 
          stabilized tenants.  The Administrator found that all services had 
          been restored, including the repair of windows in both wings of the 
          building.

               On April 17, 1991 the tenant representative sent a letter to 
          the agency wherein she alleged that services had not, in fact, been 
          restored.  She stated that the bulkhead, roof and chimney walls had 
          not been repaired, that the laundry room, halls, stairs and 
          terrazzo floors were dirty, that the sidewalks were cracked and 
          uneven and that the windows in both wings required repairs. She 
          also stated that she never received a copy of the Administrator's 
          order restoring rent.  The representative requested reconsideration 
          of the rent restoration order.  







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               The Administrator sent a notice to the parties on November 21, 
          1991 and stated that the tenants had requested reopening of the 
          rent restoration proceeding based on the failure of the owner to 
          make the required repairs and the fact that the building was in 
          receivership.  The parties were afforded the opportunity to submit 
          responses and evidence with regard to the proposed reopening.

               The management company for the subject building filed a 
          response to the Administrator's notice on November 25, 1991 and 
          stated, in relevant part, that the windows and window handles had 
          been repaired as attested to in the affidavits previously filed 
          with the Administrator and described above.  Copies of those 
          affidavits were again submitted to the Administrator.

               The tenants filed a response to the Administrator's notice on 
          December 9, 1991 and stated, in relevant part, "We hereby attest 
          that no repairs on cited violations have been undertaken to 
          date..."  Individual tenants filed responses to the notice, however 
          these responses were not relevant to the issue of the repair of the 
          windows and window handles.

               The Administrator ordered a physical inspection of the subject 
          building.  The inspection was conducted on January 30, 1992 and 
          revealed the following:

                    1.   Fifth floor left window on right side of building 
                         has one cracked pane,

                    2.   Third floor right window handle on right side is 
                         loose

                    3.   Bulkhead ceiling on right side of building is 
                         bubbled above roof door (minor),
                    
                    4.   Third floor left window pane on left side of 
                         building cracked,

                    5.   Bulkhead right side wall on left side of building 
                         is bubbled.

               The Administrator issued the order here under review on May 8, 
          1992.  After describing the procedural history, the Administrator 
          set forth the results of the January 30, 1992 report of the DHCR 
          inspector.  Based on this report, the Administrator concluded that 
          it was error to have granted rent restoration to rent stabilized 
          tenants as well as granting full rent restoration to rent 
          controlled tenants.  Accordingly, the Administrator modified Order 
          No. EF130153OR to exclude all rent stabilized tenants from the 
          grant of rent restoration.  With regard to rent controlled tenants, 
          the Administrator modified the prior order to the effect of 
          granting the owner a $2.00 per month rent restoration based on the 
          fact that the bulkhead areas were no longer water damaged.  The 












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          rent restoration was made effective February 1, 1992.  The 
          remaining $10.00 per month rent reduction for rent controlled 
          tenants was reinstated and the owner was given leave to refile for 
          rent restoration for this amount and for complete rent restoration 
          for rent stabilized tenants when the windows and window handles had 
          been repaired.  The Administrator noted that this order applied to 
          the tenant representative, who had claimed that she never received 
          a copy of the original rent restoration order, as well as all other 
          tenants who had been granted the rent reduction

               The petition for administrative review herein has been filed 
          by the new owner of the building, as represented by counsel.  After 
          setting forth the lengthy procedural history from the time of the 
          tenants' initial complaint seeking rent reduction, the owner sets 
          forth two grounds for reversal of the Administrator's order and for 
          reinstatement of the original order granting complete rent 
          restoration for all rent regulated tenants. The arguments are:

                    1.   The Administrator failed to follow established DHCR 
                         procedures in reopening the proceeding and issuing 
                         the order of modification.  The owner contends that 
                         this failure constitutes a denial of due process.

                    2.   The determination of the Administrator is in 
                         violation of the intent of the Rent Stabilization 
                         Law.

               In stating that the Administrator failed to follow established 
          DHCR procedures, the owner argues that the Administrator's decision 
          to reopen this matter was contrary to DHCR Policy Statement 90-2.  
          This policy statement was issued to clarify DHCR procedures with 
          regard to rent reductions for failure to maintain services as well 
          as applications to restore rent based on the restoration of 
          services.  According to the owner this policy states that rents are 
          to be restored when the owner has demonstrated that it has 
          corrected the enumerated conditions set forth in the rent reduction 
          order in a workmanlike manner. 

               The owner argues that it had demonstrated that all enumerated 
          conditions were corrected, and therefore, the Administrator was 
          correct in granting the original order fully restoring all rents.  
          The owner states that the reply to the Administrator's November 29, 
          1990 notice settled the matter of whether the subject windows had 
          been repaired.  Any findings made as a result of subsequent 
          inspections constitute "new issues".  The owner states that 
          ordering the continuation of the instant rent reduction based on a 
          new issue is a violation of Policy Statement 90-2.  The owner 
          points out that the inspection conducted after the proceeding had 
          been reopened found different windows to have defects than were 
          reported by the inspector fourteen months earlier investigating the 
          initial application for rent restoration.  Furthermore, the owner 
          argues that the inspector's report was inconclusive and unrelated 






          GF130082RO

          to the original complaint. 

               The petitioner's argument with regard to the Rent 
          Stabilization Code centers around Section 2520.3 thereof.  Pursuant 
          to this section, policy implemented by the DHCR shall be done so 
          "with due regard for the preservation of regulated rental housing."  
          The owner states that the minor nature of the violations is far 
          outweighed by the financial burden of the rent reduction to this 
          financially troubled building which, the owner points out, has 
          recently been in and out of receivership.  The petitioner states 
          that the Administrator's action in reinstating the rent reduction 
          is not in keeping with the letter and spirit of the Code section 
          set forth above.

               The tenants filed a joint response on July 15, 1992 and 
          stated, in substance, that they desired the Commissioner to affirm 
          the Administrator's order issued after reopening.  One tenant filed 
          an individual response on June 27, 1992 and stated that the owner 
          had made all required repairs.  
           
               After careful review of the evidence in the record, the 
          Commissioner is of the opinion that the petition should be granted, 
          the order here under review should be revoked and the order bearing 
          Docket No. EF130153OR should be reinstated.

               The Commissioner has reviewed the records in the original rent 
          reduction proceeding, the rent restoration proceeding bearing 
          Docket No. EF130153OR as well as the record in this proceeding.  It 
          is apparent from a review of all of these records that the owner is 
          correct in that the physical inspection conducted in the rent 
          reduction proceeding revealed that certain public area windows and 
          window handles were in need of repair.  The owner filed for rent 
          restoration and a new inspection was conducted.  This inspection 
          revealed that repairs to those specific windows and window handles 
          had not been made.  The Administrator duly notified the owner of 
          the specific window panes and window handles in need of repair and 
          provided an opportunity to correct the condition and offer proof of 
          any repairs.  The record is equally clear that the owner did, in 
          fact, provide proof in the form of affidavits that the cited 
          conditions had been repaired.  The Administrator failed to order 
          another inspection to confirm the alleged repairs.

               Based on the specific facts of this case the Commissioner 
          finds that The Administrator correctly issued the order bearing 
          Docket No. EF130153OR.  It was error for the Administrator to issue 
          the order here under review based on a physical inspection which 
          revealed that public area windows and window handles different from 
          those previously reported broken and different from those the owner 
          was specifically notified to repair were now in need of repair.  
          The owner is therefore correct in asserting that the order bearing 
          Docket No. EF130153OR, which ordered complete rent restoration for 
          all rent regulated tenants, should be reinstated.  The Commissioner 












          GF130082RO

          orders that the order bearing Docket No. FK130024RK be revoked for 
          the reasons stated above and that the order bearing Docket No. 
          EF130153OR be reinstated.  The rent restoration order is reinstated 
          as of the original date of issuance, January 15, 1991, and is 
          effective as of August 1, 1990 for rent stabilized tenants and as 
          of February 1, 1991 for rent controlled tenants.

               THEREFORE, pursuant to the Rent Stabilization Law and Code and 
          Rent and Eviction Regulations for New York City it is 

               ORDERED, that this petition be, and the same hereby is, 
          granted, that the Rent Administrator's order be, and the same 
          hereby is, revoked, and that the Administrator's order bearing 
          Docket No. EF130153OR be, and the same hereby is, ordered 
          reinstated.  Rent arrears owed as a result of this order may be 
          paid in twelve monthly installments for rent stabilized tenants and 
          in amounts of $10.00 for rent controlled tenants until all arrears 
          are repaid.

          ISSUED:



                                                                             
                                             JOSEPH A. D'AGOSTA
                                             Deputy Commissioner
                                   
    

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