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