Adm. Rev. Docket No. FI910168RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          ----------------------------------X  SJR 7187
          APPEAL OF                            DOCKET NO.: FI910168RO
              by MICHAEL CASEY,
                 GENERAL PARTNER,              DRO DOCKET NO.: EJ910230R
                                               TENANT: NICHOLAS VARELTZIS


          The above-named petitioner-owner timely filed a Petition for 
          Administrative Review against an order issued on August 23, 1991, 
          by the Rent Administrator at 55 Church Street, White Plains, New 
          York, concerning housing accommodations known as apartment number 
          3-D at 126 Franklin Avenue, New Rochelle, New York, wherein the 
          Administrator established the stabilized rent and directed the 
          owner to refund $ 498.83, including interest from April 1, 1984.  

          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.

          Subsequently, the landlord filed an Article 78 Proceeding in 
          Supreme Court, Westchester County, in the nature of an application 
          for a writ of mandamus, requesting that a determination of the 
          Petitioner's administrative appeal be issued. Thereafter, pursuant 
          to an order of the Court, Hopkins, J. (in 126 Franklin Avenue 
          Associates v DHCR, Westchester County Index No.16892/93), the 
          matter was remanded to the Division for further processing.

          The issue in this appeal is whether the record herein is sufficient 
          to support the Administrator's  calculation of the legal regulated 
          rent for the subject apartment.

          This proceeding was originally commenced on September 17, 1990, by 
          the filing of a Tenant's Complaint of Rent Overcharge and/or Excess 

          Adm. Rev. Docket No. FI910168RO

          Security Deposit (the Complaint). In the Complaint, the tenant 
          alleged that the prior tenant had paid a rent of approximately 
          $320.00 per month; that the complaining tenant's vacancy lease 
          (7/1/90 to 6/30/91) provided for a monthly rent of $620.00; and 
          that within one month of the commencement of the vacancy lease 
          term, the landlord demanded an additional $ 44.19 in rent.

          In response to the Complaint and the Administrator's requests for 
          relevant documents, the  landlord submitted a copy of the tenant's 
          vacancy lease (dated June 7, 1990), a floor plan for the subject 
          apartment, a copy of the lease for the apartment (2-L) the landlord 
          claimed constituted the comparable apartment (which lease provided 
          for a rent of $620.00 per month and a lease which commenced on 
          6/1/90 and terminated on 5/31/91) and a copy of a floor plan for 
          apartment 2-L. The landlord also submitted a copy of the subject 
          apartment's prior tenant's last renewal lease notice. Thereafter, 
          the landlord was advised by the Administrator that the lease 
          submitted by the landlord as showing the highest comparable rent 
          could not be used for that purpose as the Guidelines required that 
          only the rent on October 1, 1989 could be used as a highest 
          comparable rent. Whereupon, the landlord submitted a copy of a 
          lease to apartment 1-L; which lease provided for a monthly rent of 
          $595.50 and a term which commenced on June 1, 1989 and terminated 
          on May 31, 1990. With the lease for 1-L the landlord submitted 
          another copy of the floor plan for 2-L. The landlord also submitted 
          copies of the two orders referred to in its letter to the tenant 
          dated August 3, 1990, wherein the landlord had advised the tenant 
          that two rent increases were due based on the installation of major 
          capital improvements (MCI's); and based whereon the landlord 
          increased the tenant's rent by $16.50, effective July 1, 1990, and 
          by an additional $27.69, effective August 1, 1990. The orders in 
          question were issued by the Division on June 29, 1990 (D.R.O. 
          Docket Number [N]DG810055-OM) and on July 12, 1990 (D.R.O. Docket 
          Number [N]DG810050-OM), respectively. The landlord also submitted 
          the tenant's first renewal notice providing for a one year renewal 
          (July 1, 1991 through June 30, 1992) at a monthly rent of $690.76.

          In the appealed order, the Administrator determined the rent for 
          the subject apartment using the comparable rent of $595.50 as the 
          base rent. The Administrator determined the tenant's July, 1990 
          rent by adding the MCI increase of $16.50 to the base; arriving at 
          a rent of $612.00. The Administrator determined the rent for the 
          balance of the vacancy lease (11 months) by adding the second MCI 
          increase in the amount of $18.46 1  to the rent for July; arriving 
          at a rent of $630.46. The Administrator determined the rent under 
          the first renewal lease by adding to the new base of $630.46, the 
          Guideline increase for a one year renewal lease commencing between 
          October 1, 1990 and September 30, 1991: 4%; arriving at a rent of 

          1The order of July 12, 1990, provided for an increase of $9.23 
          per room per month. 

          Adm. Rev. Docket No. FI910168RO

          $655.68.  Based on said calculations the Administrator directed the 
          landlord to refund the overcharges noted hereinabove.

          In the Petition, the landlord claims, in substance, that the 
          comparable lease rent the Administrator should have used was 
          $618.00 as the lease for 1-L provided for a rent of $595.50 plus a 
          charge of $22.50 for a parking space and the complaining tenant's 
          rent includes a parking space; further, the landlord claims that 
          the second MCI increase for the subject apartment was $27.69, not 

          In answering the Petition the tenant asserts, in substance, that 
          the vacancy lease contained no MCI rider and, therefore, the 
          landlord was not entitled to collect the MCI increases during the 
          vacancy lease's term; and that, for various additional reasons, the 
          Petition should be denied. 

          In its reply to the tenant's answer, the landlord asserts, in 
          substance, that the tenant in fact underpaid his rent and that the 
          landlord intends to pursue a claim for said underpayment.

          The Commissioner is of the opinion that this matter should be 
          remanded to the Administrator for further appropriate processing in 
          accordance with this Order and Opinion.

          The Commissioner notes that the floor plan for 2-L shows that it is 
          a three room apartment and that it could therefore not provide a 
          highest comparable rent for the smaller subject apartment, whose 
          floor plan shows it to be a two room apartment. For an apartment to 
          be deemed a comparable apartment, it must have the same number of 
          rooms as the subject apartment.  The record is silent on the number 
          of rooms contained in apartment 1-L except insofar as whatever 
          inference could be drawn from the landlord's submission of a copy 
          of the floor plan for 2-L with the lease for 1-L. Based on such an 
          inference, the argument proffered by the landlord as to the 
          Administrator's miscalculation of the highest comparable rent as 
          shown by the 1-L lease would have to be dismissed based on a 
          finding that 1-L, like 2-L, contains more rooms than the subject 
          apartment and, therefore, it cannot be deemed a comparable 
          apartment. The conclusion that would therefrom flow would be that 
          as 1-L's rent cannot provide a highest comparable rent, no highest 
          comparable rent has been submitted; and the tenant's vacancy lease 
          rent should be calculated on the basis of the prior tenant's last 
          rent of $347.42.

          The Commissioner believes that this question is, then, too 
          significant to the proper calculation of the legal regulated rent 
          to be determined based on this record. 

               Adm. Rev. Docket No. FI910168RO

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

               ORDERED, that this Petition be, and the same hereby is granted to 
               the extent that it is remanded to the Administrator for further 
               appropriate processing in accordance with this order and opinion.


                                               JOSEPH A. D'AGOSTA
                                               Deputy Commissioner


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