GB610073RO

                                  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 
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO. GB610073RO
                                              :  DRO DOCKET NO.ZAG610539R
               SALMERG REALTY, INC.              TENANT: MANUEL LORENZO

                                PETITIONER    : 
          ------------------------------------X                             
             ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


               On February 7, 1992, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          January 6, 1992, by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as 
          2604 University Avenue, Bronx, New York, Apartment No. 2B, wherein 
          the Rent Administrator established the Fair Market Rent and directed 
          the owner to refund excess rent to the tenant.

               The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2522.3 of the Rent Stabilization Code.

               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 commenced in July, 1986, by the filing of 
          a rent overcharge complaint by the tenant in which the tenant stated 
          in substance that he first moved to the subject apartment in May, 
          1986, at a rental of $600.00 per month and that the prior tenants 
          paid considerably less rent.

               In response to the tenant's complaint, a prior owner advised 
          that the subject apartment had been rent controlled immediately 
          prior to occupancy by the tenant herein.  Thereafter the tenant's 
          complaint was treated as a fair market rent appeal and both the 
          owner herein and the prior owner were sent the fair market rent 
          answering package, including instructions for the submission of the 
          rents of comparable apartments.

               In response to the fair market rent answering package, the 
          owner herein cited the rents of apartments 21 and 31 at 2523 
          University Avenue as comparables.

               In Order Number ZAG610539R, the Rent Administrator established 
          the Fair Market Rent at $370.39 based solely on the special fair 
          market rent guideline and directed the owner to refund excess rent 









          GB610073RO



          in the amount of $16,325.89 inclusive of excess security.

               In this petition, the owner alleges in substance that DHCR had 
          no authority to convert the tenant's overcharge complaint into a 
          fair market rent appeal; and that assuming arguendo that DHCR may 
          treat the complaint as a fair market rent appeal, DHCR should have 
          considered the comparable apartments 21 and 31 in its calculation of 
          the Fair Market Rent.

               The tenant was served with a copy of the owner's petition on 
          March 18, 1992 and submitted a response through his attorney on June 
          2, 1992.  The owner then submitted a supplement to its petition and 
          a reply to the tenant's answer.   Said supplement was dated June 29, 
          1992 and stated, inter alia, that the owner herein who purchased the 
          subject premises in July, 1988, should not be responsible for any 
          excess rent collected by any prior owner.

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

               At the outset, it is noted that pursuant to DHCR Advisory 
          Opinion 92-1 promulgated May 20, 1992, supplements and answers to 
          Petitions for Administrative Review (PAR's)  which are not filed 
          within twenty days from the mailing of a copy of the PAR to the 
          adverse party may not be considered in the determination of the PAR 
          unless good cause is shown.  In the instant case, both the answer to 
          the PAR and the supplement to the PAR were not filed within the 
          twenty day period and no good cause has been shown so that these 
          documents are not being considered in the PAR determination.

               Turning to the merits of the PAR, the Rent Stabilization Code 
          does not require the filing of formal pleadings to initiate a fair 
          market rent appeal.  Pursuant to Code Section 2522.3(b) the tenant 
          need only allege in such appeal that the initial legal registered 
          rent is in excess of the fair market rent and such facts which to 
          the best of his or her information or belief, support such 
          allegation.  In the instant case, the tenant in his original 
          complaint stated that his rent exceeded the prior rent by too much 
          and it was conceded by the previous owner that the prior rent was a 
          rent controlled rent.  The Commissioner is of the opinion that said 
          complaint satisfies the requirements of Section 2522.3(b) and that 
          it was proper to treat the tenant's complaint as a fair market rent 
          appeal.  Further, the previous owner and owner herein were  served 
          with the fair market rent answering package affording them the 
          opportunity to submit data for the calculation of the fair market 
          rent or to object on the merits to the tenant's complaint thus 
          satisfying due process requirements.

               With regard to the owner's contention that the rents of 
          apartments 21 and 31 of 2523 University Avenue, should have been 
          used as comparables,  it is noted that the owner did not submit data 







          GB610073RO

          for complete lines of apartments including the subject line of 
          apartments as required, and did not establish that the apartments 
          cited were or were not rent stabilized apartments which were rented 
          to a first stabilized tenant during the appropriate period pursuant 
          to Section 2522.3(e) of the Rent Stabilization Code (between four 
          years prior and one year subsequent to the renting of the subject 
          apartment).  If rent stabilized during such period, the owner would 
          have been required to submit proof that it had served the tenant of 
          such comparable apartment with a Notice of Initial Legal Regulated 
          Rent(DC-2 Notice) or an Initial Apartment Registration.  It is noted 
          that these requirements were explained in the answering package sent 
          to the owner.  Accordingly, the Rent Administrator correctly did not 
          accept these comparables in determining the fair market rent. 

               The owner is directed to roll back the rent to the lawful 
          stabilized rents consistent with this decision and to refund or 
          fully credit against future rents over a period not exceeding six 
          months from the date of receipt of this order, the excess rent 
          collected by the owner.

               In the event the owner does not take appropriate action to 
          comply within sixty (60) days from the date of issuance of this 
          order, the tenant may credit the excess rent collected by the owner 
          against the next month(s) rent until fully offset.

               The owner is directed to reflect the findings and 
          determinations made in this order on all future registration 
          statements, including those for the current year if not already 
          filed, citing this order as the basis for the change.  Registration 
          statements already on file, however, should not be amended to 
          reflect the findings and determinations made in this order.  The 
          owner is further directed to adjust subsequent rents to an amount no 
          greater than that determined by this order plus any lawful 
          increases.

               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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