GL410051RO

                                  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  S.J.R. 5993
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO. GL410051RO
                                              :  DRO DOCKET NO.ZGE410001RP
               KEN-ROB COMPANY                   TENANT: CHERYL BUSBEE

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


               On December 7, 1992, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          November 16, 1992, by the Rent Administrator, 92-31 Union Hall 
          Street, Jamaica, New York, concerning the housing accommodations 
          known as 236 East 5th Street, New York, New York, Apt. D4, wherein 
          the Rent Administrator determined the fair market rent pursuant to 
          the special fair market rent guideline promulgated by the New York 
          City Rent Guidelines Board for use in calculating fair market rent 
          appeals.

               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 under docket number 46113 on 
          September 28, 1994 by the tenant filing an objection to the 
          apartment registration in which she questioned the fair market rent 
          of the subject apartment.  The Rent Administrator dismissed the 
          tenant's fair market rent appeal as untimely filed.  On March 1, 
          1990 under docket number CF410004RT, the Commissioner issued an 
          Order and Opinion denying the petitioner-tenant's administrative 
          appeal.

               Subsequent thereto, the petitioner-tenant filed a petition in 
          the Supreme Court pursuant to Article 78 of the Civil Practice Law 
          and Rules requesting that the order of the Commissioner be annulled.  
          The Court determined that the proof of service of the initial 
          registration statement (RR-1 form) submitted by the owner was not 
          sufficient and ordered that the proceeding be remitted to the 
          Division for further consideration.

               On July 25, 1991, the Commissioner then issued an Order and 
          Opinion Remanding the Proceeding to the Rent Administrator for 









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          further processing including affording the owner an opportunity to 
          submit sufficient proof of service of the RR-1 form in accordance 
          with the court order.

               Subsequent thereto, the petitioner-tenant filed a motion for 
          contempt to the effect that the fair market rent appeal should be 
          decided on the merits and that the owner should not be given an 
          opportunity to submit proof of service of the RR-1 form.

               On March 25, 1992, Justice Schoenfeld issued an order directing 
          the Division to have the tenant's fair market rent appeal considered 
          timely filed and to determine such appeal on the merits forthwith.

               In the remanded proceeding (docket number ZGE410001RP), the 
          Rent Administrator served the owner with a fair market rent appeal 
          answering package affording the owner an opportunity to submit 
          comparability data.  In answer the owner cited the subject line 
          except for apartment A4 which it stated was not applicable due to 
          "dis-similar layout, due to different configuration of 1st floor 
          apartments (lobby)".  The owner also stated in answer to the fair 
          market rent appeal that the tenant had been served in 1981 with a 
          DC-2 Notice and submitted a copy of said DC-2 Notice along with 
          proof of service on the tenant by certified mail.  The owner was 
          afforded a second opportunity to submit comparability data and 
          submitted the same information as before.

               In Order Number ZGE410001RP, the Rent Administrator adjusted 
          the initial legal regulated rent by establishing a fair market rent 
          of $206.17 effective December 1, 1979, the commencement date of the 
          initial rent stabilized lease.  The fair market rent was determined 
          solely on the basis of the special fair market rent guideline plus 
          an allowance for apartment improvements.  In addition, the Rent 
          Administrator determined that the tenant had paid excess rent of 
          $54,567.62 through November 31, 1992, and directed the 
          owner to refund such excess rent to the tenant.  The Rent 
          Administrator determined that the comparability data submitted by 
          the owner was not acceptable because the owner cited the subject 
          line "4" but did not submit complete rental data for apartment A4 
          and did not submit either the DC-2 forms or RR-1 forms with proof of 
          service for apartments B4 and F4 (the only apartments in the "4" 
          line that could be considered comparable.  In addition the Rent 
          Administrator noted that the tenant contended that she took initial 
          occupancy of the subject apartment as a sub-tenant on December 1, 
          1979, the date of the initial lease for the subject apartment 
          following vacancy decontrol; and determined that the owner had 
          failed to submit evidence rebutting the tenant's contention that the 
          prime tenant was illusory so that the tenant herein was the bonafide 
          prime tenant of the subject apartment from the initial occupancy on 
          December 1, 1979.

               In this petition, the owner alleges in substance that the Rent 
          Administrator should have considered the fact that the tenant herein 
          had been served with the DC-2 Notice in 1981 and had not filed her 
          fair market rent appeal within 90 days of receipt of such notice so 
          that the fair market rent appeal should have been dismissed as 


          GL410051RO

          untimely; that the owner failed to submit the RR-1 forms for 
          comparable apartments B4 and F4 due to inadvertence and is 
          submitting such RR-1 forms together with proof of service along with 
          its appeal; that the Rent Administrator should have specifically 
          requested copies of the missing RR-1 forms instead of just 
          requesting the comparability data a second time; that apartment A4 
          was correctly not included because it has a different configuration 
          and is not comparable; that the Rent Administrator omitted a 5% 
          vacancy allowance to which the owner was entitled for the lease 
          commencing December 20, 1980 pursuant to Guideline 12 in that the 
          initial tenant was Julius Goodman who sublet to a Lawrence S. Ballow 
          only and not to the tenant herein so that the owner was entitled to 
          a vacancy allowance when the tenant herein signed her first vacancy 
          lease; and that the tenant received a 35 month rent credit  of 
          $292.39 per month for a rent overcharge due to a miscalculation in 
          a major capital improvement rent increase during the period from 
          February 10, 1982 to December 19, 1984 whereas there are only 34 
          months during this period.

               In addition, the owner filed a court motion in the Article 78 
          proceeding to renew the two prior motions that resulted in the court 
          decisions to have the tenant's fair market rent appeal determined on 
          the merits forthwith.  The owner contended that the fair market rent 
          appeal should have been dismissed as untimely because it was not 
          filed within 90 days of service of the DC-2 Notice.  In a decision 
          dated December 21, 1993, Justice Schoenfeld denied the owner's 
          request that the court direct the Division to consider the "DC-2" 
          evidence and reiterated his prior finding that the tenant's fair 
          market rent appeal is to be considered as timely filed and that the 
          issue of the tenant's right to file a fair market rent appeal is 
          closed.

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

               Pursuant to Section 2522.3(e) of the Rent Stabilization Code, 
          applicable to fair market rent appeals filed after April 1, 1984, 
          comparability will be determined based on the following:

          (1) Legal regulated rents, for which the time to file a Fair Market 
          Rent Appeal has expired and no Fair Market Rent Appeal is then 
          pending, or the Fair Market Rent Appeal has been finally determined, 
          charged pursuant to a lease commencing within a four year period 
          prior to, or a one year period subsequent to, the commencement date 
          of the initial lease for the housing accommodation involved; and

          (2) At the owner's option, market rents in effect for other 
          comparable housing accommodations on the date of the initial lease 
          for the housing accommodations involved.

               The owner's allegations regarding service of the DC-2 form 
          cannot be considered in accordance with the court determination. 





          Rather the tenant's fair market rent appeal was properly considered 







          GL410051RO

          on the merits.  Further the record shows that the fair market rent 
          and the amount of the excess rent paid were correctly determined by 
          the Rent Administrator.

               The owner's contentions regarding the submission of 
          comparability data are without merit.  The owner was twice afforded 
          an opportunity to submit comparability data and each time was 
          advised of the necessity to submit a copy of the RR-1 form or DC-2 
          form along with proof of service for each comparable apartment 
          cited.  The owner did not do this in the proceeding before the Rent 
          Administrator and the owner's submission on appeal cannot be 
          accepted as this is not a de novo proceeding.  Further, data on 
          Apartment A4 should have been submitted since the owner did not 
          establish in what way Apartment A4 is distinguished from other 
          apartments in the "4" line.  

               The owner's contention that it was entitled to a 5% vacancy 
          allowance in the lease commencing December 20, 1980, is without 
          merit.  It is noted that during the earlier proceeding (46113), the 
          tenant submitted an affidavit to the effect that she and her husband 
          Lawrence Ballow moved to the subject apartment on December 20, 1979 
          pursuant to a sublease signed by her husband in the presence of the 
          owner and a real estate agent, but that the alleged prime tenant 
          Julius Goodman was not at such meeting; that Julius Goodman never 
          took occupancy of the subject apartment, never had a phone, never 
          was seen by anybody in the building and must be considered as an 
          illusory prime tenant; and that she and her husband Lawrence Ballow 
          were the first rent stabilized tenants to occupy the subject 
          apartment after the rent controlled tenant had vacated.  This 
          affidavit was made part of the tenant's petition for administrative 
          review filed under docket CF410004RT and was served on the owner as 
          part of said petition.  However, the owner never submitted any 
          evidence to refute the statements made in the affidavit.  
          Accordingly, the Rent Administrator correctly considered that the 
          tenant and her husband were the real prime tenants effective 
          December, 1979.  Therefore, the lease commencing December 20, 1980 
          was a renewal lease and the owner was correctly found not to be 
          entitled to a vacancy allowance for it.

               Finally, although the period from February 20, 1982 to December 
          19, 1984, represents a 34 month period and the excess rent listed by 
          the Rent Administrator was $292.39 per month for a 35 month period, 
          the owner was not hurt by this error.  This is so because for the 
          immediately prior period of December 20, 1981 to February 19, 1982, 
          the Rent Administrator found excess rent of $305.21 per month to 
          have been paid for a one month period rather than the correct two 









          month period.  Therefore the owner benefitted slightly by this error 
          and since the tenant did not file her own petition for 
          administrative review regarding this point, the Commissioner deems 


          GL410051RO

          it appropriate not to make any changes to correct these errors. 

               The owner is directed to roll back the rent to the lawful 
          stabilized rent 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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