DOCKET NO.:  GK420197RT
                              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   :   
     APPEAL OF                                ADMINISTRATIVE REVIEW
                                           :  DOCKET NO. GK420197RT
          ROBERT DABROWSKI,                   DISTRICT RENT ADMINISTRATOR'S 
                                           :  DOCKET NO. EH420045RP
                            PETITIONER        
     --------------------------------------X            


        ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART
                 AND REMANDING PROCEEDING TO THE RENT ADMINISTRATOR

     On November 25, 1992, the above-named tenant filed a petition for 
     administrative review of an order issued on October 29, 1992 by a Rent 
     Administrator concerning the housing accommodation known as Apartment 2-R, 24 
     Minetta Lane, New York, New York.

     The Commissioner has reviewed all of the evidence in the record and has 
     carefully considered that portion of the record relevant to the issues raised 
     by the petition for review.

     This proceeding was commenced by the subject tenant filing a "Request for 
     Registration Information," dated July 21, 1988, with the Division of Housing 
     and Community Renewal (D.H.C.R.).  In the above-mentioned tenant's request, 
     the tenant asserted, among other things, that he first took occupancy on May 
     1, 1966; that his current rent is $427.29 per month, and that the subject 
     tenant is rent controlled.

     On January 27, 1989, the Administrator mailed to the subject tenant and owner 
     a "Notice of Commencement of Proceeding to Determine Facts or Fix Maximum or 
     Legal Regulated Rent," to determine the rental status of the subject 
     apartment.

     The Administrator issued an order on May 19, 1989, under Docket No. 
     CK420007AD, which determined that the subject apartment is rent controlled, 
     and that the subject apartment's maximum rent is $30.70 per month effective 
     August 1, 1970.

     The subject owner filed a petition for administrative review, dated June 22, 
     1989, of the Administrator's order issued under Docket No. CK420007AD.  The 
     owner's petition alleged, among other things, that the aforementioned notice 
     was mailed to an address no longer used by the subject owner; that the 
     subject owner submitted an answer to the above-mentioned notice that was 
     received by D.H.C.R. on May 18, 1989; that the subject tenant is subject to 
     rent stabilization; that the subject tenant's initial rent in 1966 was 
     $225.00 per month, and that the Administrator was in error by establishing 
     the subject tenant's maximum rent at $30.70 per month effective August 1, 
     1970.









          DOCKET NO.:  GK420197RT

     The Commissioner issued an order on August 19, 1990, under Docket No. 
     DF420173RO, finding that the subject owner had "inadequate notice and 
     opportunity to submit evidence as to the regulatory status of the apartment."  
     The Commissioner remanded the proceeding to the Administrator to reconsider 
     those issues pertaining to the rental status and the legal rent of the 
     subject apartment.  The Commissioner established an interim rent of $229.00 
     per month (the average of the last rent charged by the subject owner which 
     was $427.29 per month and the rent of $30.70 per month which was established 
     by the Administrator's order issued under Docket No. CK420007AD) until the 
     Administrator issued a new order.

     On September 6, 1990, the Administrator mailed to the parties to the 
     proceeding a "Notice of Proceeding to Reconsider Order Pursuant to Remand."  
     The notice directed the parties to submit their responses to the 
     Administrator for the purpose of substantiating their allegations as to the 
     issues raised in the aforementioned Commissioner's order.

     On September 19, 1990, the subject tenant filed a response which alleged, 
     among other things, that the subject tenant first took occupancy in the 
     subject apartment in 1966 pursuant to a lease; that the subject tenant 
     "continued to receive renewal leases every two years, where until 1988 the 
     rent was $427.00 per month," and that the subject tenant has been overcharged 
     as the Administrator established the legal rent at $30.70 per month.

     On October 18, 1990, the subject owner filed a response which alleged, among 
     other things, that the subject building's current Certificate of Occupancy 
     (C. of O.) is dated April 8, 1960, which was issued based upon a substantial 
     alteration of the subject building; that the substantial alteration of the 
     subject building was performed between 1958 and 1960 by an earlier owner of 
     the building; that the subject owner stated that:  "rent control jurisdiction 
     specifically extends only to premises constructed prior to February 1, 1947, 
     and buildings having a post-February 1, 1947 Certificate of Occupancy are 
     specifically excluded from rent control coverage"; that as the subject 
     building's Certificate of Occupancy was issued in 1960, the subject owner 
     asserted, the subject building is exempt from rent control, and that, the 
     subject owner alleged, D.H.C.R. should issue an order determining that the 
     subject apartment is rent stabilized.

     On December 12, 1990, a physical inspection of the subject apartment was 
     carried out by the D.H.C.R.  The inspector's report noted that, among other 
     things, the subject apartment consisted of a kitchen, a bathroom, a dining 
     room, a sitting room, a living room, and a bedroom; that the subject 
     apartment is a self-contained unit; that the subject tenant does not share 
     any facilities with any other tenants, and that the subject building consists 
     of eight apartments.

     The owner submitted a further response, dated November 29, 1991, in which the 
     owner alleged, among other things, that:


               1)   The subject building was constructed in the 
                    late 1890's or early 1900's as an old law 
                    tenement;




          DOCKET NO.:  GK420197RT



               2)   When the subject building was registered with 
                    the Office of Price Administration (O.P.A.) in 
                    1943 the subject apartments did not have, 
                    among other things, central heat, hot water, 
                    mechanical refrigeration service, stoves, 
                    bathrooms and upgraded electrical system, and 
                    that toilet facilities were shared; 

               3)   The prior owner substantially gutted the 
                    subject building's interior to create eight 
                    Class "A" apartments;

               4)   There were two separate C. of O.'s issued 
                    relating to the alteration of the subject 
                    building;

               5)   The subject building is exempt from rent  
                    control as a result of the alterations 
                    performed from 1955 - 1958 which created eight 
                    new self-contained Class A apartments where 
                    none had existed before; 

               6)   The subject apartment is also decontrolled due 
                    to owner-occupancy decontrol as a prior owner 
                    of the subject building had resided in the 
                    subject apartment for one year or more; 

               7)   As a result of the alteration to the subject 
                    building, the subject apartment was expanded 
                    from a two-room apartment to a four-room 
                    apartment, and 

               8)   The subject apartment is also decontrolled due 
                    to "luxury decontrol," pursuant to Section 
                    2200.2(f)(14)(i) of the City Rent and Eviction 
                    Regulations.


     To the above-mentioned response the subject owner attached, among other 
     things, the rent registration cards of various apartments in the subject 
     building that were filed with the O.P.A. in 1943.  The registration cards 
     pointed out that the toilet facilities were shared.The registration cards 
     also noted, among other things, that hot water, a bathroom, central heating, 
     a stove, a refrigerator, light and a elevator, were not required services to 
     be supplied by the landlord.

     The Administrator requested that the Hearing Bureau of the D.H.C.R. conduct 
     a hearing to determine the rental status of the subject apartment.

     On April 9, 1992, the Administrative Law Judge mailed a "Notice of Hearing," 
     to the parties to this proceeding which directed the subject owner to submit 
     at the hearing evidence of the following:









          DOCKET NO.:  GK420197RT




               1)   That the subject apartment was owner-occupied 
                    for a period of one year or more, and that it 
                    was rented after April 1, 1953;

               2)   That the subject apartment's monthly rent as 
                    of April 1, 1960 was $250.00 or more, and that 
                    the required notices and decontrol 
                    applications were timely filed, and 

               3)   That the subject building was substantially 
                    altered on or after May 1, 1950 which resulted 
                    in additional housing accommodations 
                    consisting of self-contained family units.


     Hearings were held on June 5, 1992 and July 29, 1992 in which the subject 
     tenant and owner appeared.  The Administrative Law Judge made the following 
     determinations:


               1)   That the evidence submitted by the subject 
                    owner did not show that the subject apartment 
                    should be decontrolled due to owner occupancy; 

               2)   That the evidence submitted did not show that 
                    the alleged owner-occupant resided in the 
                    subject apartment for at least one year while 
                    owner of the subject building;

               3)   That the alleged owner-occupant "divested 
                    himself of title to the unit on July 26, 
                    1952";

               4)   That the subject apartment's monthly rent was 
                    $250.00 on April 1, 1960, but the apartment is 
                    not subject to "luxury decontrol,"  pursuant 
                    to Section 2200.2(f)(14)(i) of the City Rent 
                    and Eviction Regulations, as the rent agency's 
                    records do not show that a decontrol report 
                    was filed with the rent agency;

               5)   That the registration cards for the subject 
                    building indicates that the apartments 
                    registered in 1943 did not contain a bathroom, 
                    and a kitchen, or equipped with cooking or 
                    refrigeration equipment;

               6)   That the building plans, that were filed with 
                    the Department of Building's Alteration No. 
                    745-1955, showed that prior to the subject 
                    building's alterations there was an air shaft 
                    located in the center of the building;




          DOCKET NO.:  GK420197RT




               7)   That an architect, from the architectural firm 
                    which prepared the blueprints for the 
                    alterations of the subject building, 
                    "testified credibly that the resulting work 
                    transformed what was essentially eight cold 
                    water flats into apartments which contained 
                    kitchens and bathrooms";

               8)   That the architect also testified that the 
                    work included:  "the installation of heating, 
                    plumbing, electrical and exhaust systems," and 
                    that:  "The floors of the building were 
                    rebuilt to cover what was formerly the air 
                    shaft and in this newly constructed space the 
                    kitchens and bathrooms were built";

               9)   That the record supports the owner's 
                    allegation that the "work done was virtually a 
                    gut renovation";

               10)  That by July, 1957 the aforementioned 
                    alterations had been completed, and were 
                    approved by the Department of Buildings as 
                    indicated by C. of O. No. 47796;

               11)  That after the aforementioned alterations the 
                    area of the subject apartment was 
                    approximately 285 square feet, and therefore 
                    could not be considered as a "self-contained 
                    family unit," pursuant to the applicable rent 
                    regulations;

               12)  That the record shows that in 1958 two rooms 
                    were added to the subject apartment which 
                    increased the area of the subject apartment to 
                    673 square feet which resulted in the subject 
                    apartment qualifying as a "self-contained 
                    family unit";

               13)  That the subject building originally contained 
                    eight units and that after all of the 
                    alterations were completed the subject 
                    building still contained eight units, and

               14)  That as a result of the alterations in the 
                    subject building additional self-contained 
                    family units were created, and therefore the 
                    subject apartment should be decontrolled, 
                    pursuant to Section 2200.9 of the City Rent 
                    and Eviction Regulations.









          DOCKET NO.:  GK420197RT



     In the order under review herein, the Administrator revoked its prior order 
     issued under Docket No. CK420007AD, and determined that the subject apartment 
     qualified for decontrol pursuant to Section 2200.9 of the City Rent and 
     Eviction Regulations.  The Administrator also established that the subject 
     apartment's legal regulated rent should be $427.29 per month.

     In his petition, the subject tenant asserts, among other things, that prior 
     to the conversion of the subject building it contained eight housing 
     accommodations; that after the conversion of the subject building it still 
     contained eight housing accommodations, and that as the conversion of the 
     subject building did not result in additional housing accommodations, the 
     subject apartment should not have been decontrolled by the Administrator.  As 
     legal authority for his assertion the subject tenant cites the court cases 
     Panzer v. Berman, 53 Misc.2d 122, 277 N.Y.S.2d, 186 (1967), and Boss v. 
     Caputa, 9 A.D.2d 730, 192 N.Y.S.2d 237 (1959).  The tenant's petition also 
     alleged that the Administrative Law Judge's findings should be reversed.

     On February 17, 1993, the subject owner filed a response to the tenant's 
     petition.  In the response the subject owner asserts, among other things, 
     that the subject building was converted from "a former old law tenement 
     building containing cold water flats into a modern Class A apartment building 
     consisting of eight self-contained family units"; that the size of the 
     subject apartment doubled after the work in the subject building was 
     completed; that:  "additional housing accommodations were created in 
     apartment 2-R, so that instead of a two-room apartment, Apartment 2-R now 
     consisted of four-room apartment, plus a kitchen and bathroom"; that the 
     conversion of the subject building has met all of the conditions to be 
     eligible for decontrol as set forth in Section 2200.9 of the City Rent and 
     Eviction Regulations, and that, the owner alleges, there are court cases 
     which have interpreted the above-mentioned regulation as requiring the 
     decontrol of a housing accommodation where a conversion has resulted in 
     additional self-contained family units, even though the conversion did not 
     result in additional housing accommodations.

     As legal authority for the owner's above-mentioned assertion the owner cites 
     the court cases Schuh v. Abrams, 19 Misc.2d 668, 195 N.Y.S.2d 237 (1955), and 
     319 West 108th Street Realty Corp. v. McGoldrick, 19 Misc.2d 678, 195 
     N.Y.S.2d 236 (1954).

     The subject owner further asserts, among other things, that the subject 
     apartment has been decontrolled due to owner occupancy, pursuant to Section 
     2200.2(f)(11) of the City Rent and Eviction Regulations; that the subject 
     apartment is not rent controlled due to "luxury decontrol," pursuant to 
     Section 2200.2(f)(14)(i) of the City Rent and Eviction Regulations, as the 
     rent as of April 1, 1960 was $250.00 per month, and that the subject 
     apartment thereafter became vacant and was subsequently rented on or about 
     August 1, 1964 at a monthly rent of $250.00.

     After careful consideration, the Commissioner is of the opinion that the 
     tenant's petition should be granted in part, and that this proceeding should 
     be remanded to the Administrator for further processing.

     The relevant rent regulation in this proceeding is Section 2200.9(a)(1) of 
     the City Rent and Eviction Regulations which states in part that:





          DOCKET NO.:  GK420197RT

               Upon application of the landlord, the administrator shall 
               issue an order decontrolling additional housing 
               accommodations, other than rooming house accommodations, 
               resulting from conversion of housing accommodations on or 
               after May 1, 1950, if there has been a structural change 
               involving substantial alterations or remodeling and such 
               change has resulted in additional housing accommodations 
               consisting of self-contained family units....


     Section 2200.9(2) of the City Rent and Eviction Regulations define a "self- 
     contained family unit" as:


               [A] housing accommodation with private access, containing 
               two or more rooms, consisting of at least one bedroom and 
               a living room/dining space area in addition to a 
               kitchen...a private bathroom...and at least one closet 
               plus an additional closet for each bedroom.  Such 
               accommodation shall contain a minimum total area of 395 
               square feet, exclusive of the area of bathrooms and 
               closets....


     Pursuant to the aforementioned rent regulation, the issuance of a decontrol 
     order by the rent agency is warranted when the conversion of the subject 
     building results in additional housing accommodations consisting of "self- 
     contained family units" which exceeds the total number of housing 
     accommodations that existed before the conversion of the subject building.

     Based on the record in this proceeding, the Commissioner finds that prior to 
     the conversion of the subject building it contained eight housing 
     accommodations, and that none of them were a "self-contained family unit."  
     The Commissioner further finds, based on the record, that after the 
     conversion of the subject building it still contained eight housing 
     accommodations; but the conversion added at least one "self-contained family 
     unit" to the subject building.

     As the subject building contained eight apartments both before and after the 
     conversion, and that the conversion of the subject building did not result in  
     the subject building containing more than eight "self-contained family 
     units,"  the Commissioner finds that the subject apartment does not qualify 
     for decontrol pursuant to Section 2200.9 of the City Rent and Eviction 
     Regulations.

     The Commissioner takes note of the fact that the Administrative Law Judge and 
     the subject owner have a different interpretation of the above-mentioned rent 
     regulation.  They both contend that a decontrol order would be warranted when 
     the conversion resulted in additional "self-contained family units" without 
     there being a necessity for additional housing accommodations.  However, the 
     Commissioner is of the opinion that the above-mentioned interpretation  of 
     the aforementioned rent regulation is contrary to the current policy of the 
     D.H.C.R. and the current interpretation of the courts (see,Boss v. Caputa, 9 
     A.D.2d 730, 192 N.Y.S.2d 237).



     Accordingly, the Commissioner finds that the Administrator's order should be 
     revoked.






          DOCKET NO.:  GK420197RT


     As to the subject owner's assertion that the subject apartment qualifies for 
     owner-occupancy decontrol, the Commissioner finds that that assertion is 
     without merit.

     The Commissioner points out that the Administrative Law Judge determined that 
     the subject owner did not submit evidence showing when the alleged owner- 
     occupant became owner of the subject building.  Furthermore, the 
     Administrative Law Judge determined that the subject owner did not submit 
     evidence showing that the alleged owner-occupant resided in the subject 
     apartment as owner of the subject building for one or more years, pursuant to 
     Section 2200.2(f)(11) of the City Rent and Eviction Regulations.  In 
     addition, the Administrative Law Judge determined that the alleged owner- 
     occupant relinquished ownership in the subject building and vacated the 
     subject apartment on July 26, 1952.  The Commissioner notes that an apartment 
     does not qualify for owner-occupancy decontrol, as in this proceeding, when 
     the owner vacates that apartment prior to April 1, 1953.

     Accordingly, the Commissioner finds that the subject apartment does not 
     qualify for owner-occupancy decontrol.

     As to the issue of "luxury decontrol," pursuant to Section 2200.2(f)(14)(i) 
     of the City Rent and Eviction Regulations, the Commissioner finds that that 
     issue should also be remanded to the Administrator for further processing.

     The Commissioner points out that for the subject apartment to be eligible for 
     "luxury decontrol" it must meet the prerequisites set forth in Sections 
     2200.2(f)(14)(i), and 2203.2(c) of the above-mentioned regulations.

     Pursuant to Section 2200.2(f)(14)(i) of the aforementioned regulation, in 
     order for an apartment to qualify for "luxury decontrol" the maximum rent 
     effective on April 1, 1960 must have been $250.00 per month or more.

     In determining whether an apartment qualifies for "luxury decontrol," 
     pursuant to the above-mentioned regulation, the Commissioner notes that the 
     determinative factor is the legal maximum collectible rent effective on April 
     1, 1960, and that it is not determined by the rent the landlord charged on 
     the above-mentioned date.

     As the issue of the subject apartment's maximum rent is being remanded to the 
     Administrator, the Commissioner finds that the issue of whether the subject 
     apartment qualifies for "luxury decontrol" can not presently be determined.

     Accordingly, the Commissioner finds that the issue as to whether the subject 
     apartment qualifies for "luxury decontrol" is to be remanded to the 
     Administrator for further processing.

     If the Administrator should determine that the subject apartment's maximum 
     rent effective April 1, 1960 is less than $250.00 per month, the Commissioner 
     is of the opinion that the Administrator should find that the subject 
     apartment does not qualify for "luxury decontrol."




     If the Administrator should determine that the subject apartment's maximum
     rent effective April 1, 1960 is $250.00 per month or more, the Commissioner 
     is of the opinion that the Administrator should determine whether all of the 
     requisite conditions, pursuant to the applicable rent regulations, have been 


          DOCKET NO.:  GK420197RT

     followed to qualify the subject apartment for "luxury decontrol."

     The Commissioner notes that the Administrative Law Judge, in his findings, 
     stated that the subject apartment did not qualify for "luxury decontrol" as 
     the requisite conditions, as set forth in Section 2203.2(c) of the City Rent 
     and Eviction Regulations, were not met.

     If the Administrator should determine that the subject apartment qualifies 
     for "luxury decontrol," the Commissioner is of the opinion that the 
     Administrator should establish the subject apartment's legal regulated rent 
     pursuant to the Rent Stabilization Law and Code.

     As to the tenant's assertion, in his petition, that the Administrative Law 
     Judge's findings should be reversed, the Commissioner points out that the 
     Administrative Law Judge's findings are not an order of the rent agency, but 
     are recommendations to guide the Administrator and/or the Commissioner in 
     resolving the issues raised in a proceeding.

     Accordingly, the Commissioner finds that the subject tenant's petition should 
     be granted in part.

     As the Commissioner has revoked the Administrator's order under review 
     herein, and that the subject apartment's legal rent is not known, the 
     Commissioner is of the opinion that the issue of establishing the subject 
     apartment's rental status and legal rent should be remanded to the 
     Administrator pursuant to Section 2202.22 of the City Rent and Eviction 
     Regulations.

     The Commissioner is also of the opinion that in establishing the subject 
     apartment's maximum rent the Administrator should take note of the 
     aforementioned alterations done to the subject apartment.

     As the Administrator's order under review herein is revoked, the Commissioner 
     finds that the subject apartment's rent should be $229.00 per month, as 
     established in Docket No. DF420173RO, until a new order is issued on remand.

     THEREFORE, in accordance with the City Rent and Rehabilitation Law and the 
     Rent and Eviction Regulations, it is

     ORDERED, that the subject tenant's petition be, and the same hereby is, 
     granted in part in accordance with this order and opinion, and that the 
     Administrator's order, issued under Docket No. EH420045RP, be, and the same 
     hereby is, revoked; and it is 

     FURTHER ORDERED, that this proceeding shall be remanded to the Administrator 
     for an administrative determination to establish the subject tenant's maximum 
     rent; and it is 

     FURTHER ORDERED, that if the facts so warrant, the Administrator shall 
     determine whether the subject apartment qualifies for "luxury decontrol"; and 
     it is 


     FURTHER ORDERED, that if the Administrator determines that the subject 
     apartment qualifies for "luxury decontrol," then the Administrator shall 
     establish the subject apartment's legal regulated rent; and it is 

     FURTHER ORDERED, that the subject apartment's interim rent shall be $229.00 
     per month, as set forth in Docket No. DF420173RO, until a new order is issued 






          DOCKET NO.:  GK420197RT

     on remand.

     ISSUED:


                                                                              
                                                     JOSEPH A. D'AGOSTA
                                                     Deputy Commissioner
       
    

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