GA 610047 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 610047 RO

                                          :  DISTRICT RENT OFFICE
                                             DOCKET NO. AH 610503 R
           Paquita Martir,                   
                                             TENANT: Oliver Lee               
                               PETITIONER : 

                                     IN PART

      On January 7, 1992, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on December 12, 1991, 
      by the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 2750 Morris Avenue, 
      Bronx, New York, Apartment No. 4, 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 

      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 on August 28, 
      1986 of a rent overcharge complaint by the tenant who stated in 
      substance that the rent of $680.00 charged when he took occupancy in 
      July 1986 was too high and should be about $550.00.

      In answer to the complaint, the owner stated in substance that the 
      apartment was owner-occupied from 1972 through 1986 and submitted bills 
      for new equipment and an order for major capital improvements (ZBE 
      610009 OM) used in calculating the tenant's rent.

      The owner was directed to substantiate the owner-occupied status of the 
      apartment.  However the owner's submission of checks from the owner to 

          GA 610047 RO

      Con Edison in 1983-84 indicate the owner's address was in upstate New 
      York State and not in the subject premises.  Further, the owner was 
      directed to provide proof of service of an amended RR1 from on the 
      tenant; bills for improvements; proof of registration with DHCR for 
      1985; and rental data from April 1, 1980.  The owner submitted bills for 
      new tiles, sinks, shower and repairs to windows and a copy of DHCR order 
      ZBC 610009 OM issued September 1, 1989 granting an increase of $6.17 per 
      room for new windows. 

      During the processing of the case, the owner submitted a notarized 
      statement indicating that the tenant was decreased as of July 1991. 
      However a forwarding address on behalf of the tenant was submitted.

      In Order Number ZAH 610503 R, the Rent Administrator established the 
      lawful stabilization rent through the default procedure as $481.01      
      effective July 20, 1986, determined that the tenant had been overcharged 
      and directed a refund to the tenant of $7,362.63 including treble 
      damages on that portion of the overcharge collected on and after April 
      1, 1984 and froze the rent due to improper registration in 1984 and non- 
      registration in 1985.

      In this petition, the owner alleges in substance that there is no 
      overcharge; reiterated that the apartment was owner-occupied; and 
      outlined how the rent of $680.00 was established using increases for new 
      equipment and major capital improvements granted under ZBC 610009 OM.

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

      Sections 2528.2 and 2528.3 of the Rent Stabilization Code (hereafter 
      RSC) outline the owner's obligations under the Omnibus Housing Act to 
      register subject housing accommodations with DHCR.

      Section 2528.4(a) of the RSC provides in pertinent part that the penalty 
      for failure to initially register an apartment is barring the owner from 
      collecting any rent in excess of the legal regulated rent in effect on 
      the date the housing accommodation became subject to the registration 
      requirements and that the late filing of the registration shall result 
      in the prospective elimination of such penalty.

      An examination of the record in this case discloses that the owner has 
      failed to substantiate its contention that the subject apartment was 
      owner-occupied prior to the tenant's occupancy from 1971 through 1986.  
      Further, a review of the rent control records on file with DHCR does not 
      support the owner's contention that the apartment was owner-occupied in 
      that the owner filed Rent Control MBR eligibility and other forms using 
      solely its current address in upstate NY and declared in the 1980 MBR 
      Certification that "all apartments were "decontrolled."  Consequently, 
      the tenant appears not to be the first stabilized tenant after decontrol 
      by either vacancy of the rent control tenant nor by owner-occupancy as 
      the owner contends.

          GA 610047 RO

      The owner has failed to submit either proof of registration of the 
      subject apartment in 1985 nor substantiation that the apartment was 
      owner occupied in 1984 as registered nor a rental history from the base 
      date of April 1, 1980.  Accordingly, the Rent Administrator's order 
      setting the tenant's rent through the default procedure and freezing the 
      rent due to failure to properly register in 1984 or 1985 was warranted.

      The owner is correct, however, in its contention that the Rent 
      Administrator in setting the rent for the subject apartment at the 
      lowest rent for the same size apartment in the building failed to 
      consider increases for new equipment under Section 2522.4 of the RSC for 
      which the owner had submitted bills below.

      The Commissioner, therefore, has adjusted the initial rent to reflect an 
      increase of $37.40 for new sinks, tiles, showerbody, et al, at a total 
      cost of 1/40 of $1,495.91 but excluded the following bills: (a) $109.90 
      for a toilet and installation as that is a required service; (b) $500.00 
      for installation of tiles by the owner's employee (c) $658.00 for 
      repairs to windows, plumbing and floors.  In addition, the increase of 
      $6.17 per room granted under order ZBC 610009 OM may not be used in the 
      establishment of the tenant's vacancy rent as the owner contends because 
      both the collectible date of October 1, 1989 and the effective date of 
      September 1, 1987 are subsequent to the tenant's vacancy rent in July 
      1986 and therefore the collection of the increase granted under ZBC 
      610009 OM was not permitted prior to the issuance of the DHCR order 
      granting the increase and may not be used in the calculation of the 
      tenant's vacancy rent in July 1986 since the rent is frozen due to the 
      failure to submit a complete rental history.  The addition of $37.40 for 
      new equipment to the rent established in the Rent Administrator's order 
      results in a base rent of $518.41 effective July 20, 1986.

      Taking the above factors into account, the Commissioner has recalculated 
      the lawful stabilization rents and amount of rent overcharge for the 
      subject apartment, including treble damages, on the overcharge occurring 
      on and after April 1, 1984.  The lawful stabilization rents and amount 
      of rent overcharge are set forth on the amended rent calculation chart 
      attached hereto and made a part hereof.

      Because this determination concerns lawful rents only through July 19, 
      1987, the owner is cautioned to adjust subsequent rents to an amount no 
      greater than that determined by this order plus any lawful increases, 
      and to register any adjusted rents with this order and opinion being 
      given as the explanation for the adjustment.

      This order may, upon the expiration of the period in which the owner may 
      institute a proceeding pursuant to Article 78 of the Civil Practice Law 
      and Rules, be filed and enforced in the same manner as a judgment.

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

          GA 610047 RO

      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.  The lawful stabilization rents and the amount 
      of the rent overcharge are established on the attached chart which is 
      fully made a part of this order.  The amount of the rent overcharge 
      through July 19, 1987 is $5,978.83.

      A copy of this order is being served on the current occupant of the 
      subject apartment.


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner

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