GA 210054 RO

                                  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.:  GA 210054 RO

               PROSPECT REALTY ASSOCIATES,      DRO DOCKET NO.: ZDJ 210280 R

                                                TENANT: RICHARD WILKERSON     
                    
                                   PETITIONER    
          ------------------------------------X                             

             ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


          On January 13, 1992, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on 
          December 20, 1991, by the Rent Administrator, 92-31 Union Hall 
          Street, Jamaica New York, concerning the housing accommodations 
          known as 925 Prospect Place, Brooklyn, New York, Apartment No. 4J, 
          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 
          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 originally commenced by the filing of a rent 
          overcharge complaint by the tenant on October 6, 1989.  The owner 
          was served with a copy of the tenant's complaint and was further 
          directed on September 18, 1991 and October 17, 1991 to submit 
          copies of leases from April 1, 1984 and bills and cancelled checks 
          to substantiate new equipment or improvements to the subject 
          apartment.

          The owner failed to submit a response.

          In Order Number ZDJ 210280 R, the Rent Administrator established 
          the lawful stabilized rent as $314.40 effective October 1, 1989,   
          determined that the tenant had been overcharged and directed a 
          refund to the tenant of $9,477.00 through December 30, 1990 
          including treble damages on overcharges collected on and after 
          April 1, 1984.


          In this petition, the owner contends in substance that the Rent 
          Administrator utilized an incorrect base rent of $255.70 rather 







          GA 210054 RO

          than the correct base rent of $365.31 in effect on December 20, 
          1988 when computing the tenant's vacancy lease which commenced 
          January 1, 1989 and not October 1, 1989 as stated in the order; 
          that the Rent Administrator failed to consider $7,000.00 in 
          improvements to the subject apartment; that the use of the correct 
          base rent and 1/40th of the cost of improvements results in no 
          overcharge and further that due to the fact that the tenant failed 
          to pay back rent of $7,875.00, the owner should not be liable for 
          overcharges for rent not collected.  With the petition, the owner 
          submitted leases in effect from March 1, 1987 through December 30, 
          1990 plus copies of a statement dated November 15, 1988 from a 
          general contractor indicating that the apartment was rehabilitated 
          at a total cost of $6,890.00.

          In answer to the owner's petition, the tenant stated in substance 
          that the improvements were really repairs which required only 2 
          hours labor by 2 workers and that the cost alleged is questionable.  
          Moreover, these repairs were performed after November 15, 1988 and 
          not prior to his occupancy.

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

          Section 2526.1(a)(3)(i) of the Rent Stabilization Code states in 
          pertinent part that the legal regulated rent for purposes of 
          determining an overcharge shall be deemed to be the rent provided 
          in the annual registration filed 4 years prior to the most recent 
          registration statement at the time of the filing of the complaint 
          plus any subsequent lawful increases and adjustments.

          Section 2523.7 of the Rent Stabilization Code obliges the owner to 
          maintain and produce records relating to rentals of accommodations 
          within the 4 year period prior to the most recent registration.

          In the instant case, the tenant filed the complaint in October 1989 
          and therefore the owner was correctly directed to produce rental 
          records from April 1985 to substantiate the rental data contained 
          in the registrations filed with DHCR.

          An examination of the record in this case discloses that in the 
          proceeding before the Rent Administrator, the owner did not submit 
          bills or the prior leases from the base date of April 1, 1985 
          although afforded an opportunity to do so and has not submitted a 
          reasonable excuse for its failure to do so.  Since this is not a de 
          novo proceeding, the owner's contention that guideline increases 
          for leases and increases for new equipment and improvements should 
          be included in the establishment of the tenant's vacancy lease rent 
          cannot be considered for the first time on appeal.  Moreover, the 
          owner's failure to submit such records precluded the Rent 
          Administrator from considering any adjustments for the period from 
          April 1, 1985 through January 1, 1989 in the absence of supporting 
          rental records and therefore, the Rent Administrator was correct in 
          utilizing the rent in effect prior to April 1, 1985 ($255.70) as 
          the base rent for calculating the tenant's vacancy lease.
          Further, the owner has failed to submit either below or on appeal 
          copies of the leases in effect from April 1, 1985 through February 
          28, 1987.



          GA 210054 RO

          The owner is correct, however, in its contention that the Rent 
          Administrator's order contained an error in the calculation chart 
          in indicating the commencement date of the tenant's vacancy leases 
          as October 1, 1989 rather than the correct commencement date of 
          January 1, 1989.  However, the Rent Guidelines Board order 
          governing increases for leases commencing January 1, 1989 (RGBO # 
          20) and leases commencing October 1, 1989 (RGBO # 21) contain 
          identical guideline and vacancy increases.  Therefore, the 
          computation of the lawful stabilized rent would be unchanged by the 
          correction on the chart from October to January 1989.

          Moreover, the correction would result in a change in the amount of 
          the overcharge for that lease term to the detriment of the owner by 
          increasing the computation of the monthly overcharge from 15 to 24 
          months.  As such, and in the absence of a timely petition for 
          administrative review by the tenant, the Commissioner finds it 
          appropriate to deny that portion of the appeal and not to adjust 
          the calculation chart to correct the incorrect commencement date of 
          October 1,1989 as shown on the calculation chart.

          Accordingly, the Rent Administrator's order was warranted.

          Because this determination concerns lawful rents only through      
          December 30, 1990, the owner is cautioned to adjust subsequent 
          rents to an amount no greater than that determined by the Rent 
          Administrator's order plus any lawful increases, and to register 
          any adjusted rents with this order and opinion being given as the 
          explanation for the adjustment.

          With regard to the owner's contention that the tenant currently 
          owes back rent and that the owner should not be liable for 
          overcharges for rent not collected, the Commissioner notes that the 
          Rent Administrator calculated the amount of overcharge only through 
          December 30, 1990 and cannot take into account any dispute over 
          rent payments subsequent to that date.   This order is issued 
          without prejudice to any action the parties may take in court 
          regarding such dispute.

          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 or not in excess of twenty percent per month 
          thereof may be offset against any rent thereafter due the owner.









          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.







          GA 210054 RO




          ISSUED



                                                                           
                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner