GA410181RO

                                  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.  GA410181RO
                                              :  DRO DOCKET NO.ZCK410005TC
          50 E. 78 CORP.                         TENANT: LANCE R. GOODWIN

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

               On  January 17, 1992, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on       
          January 9, 1992 by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as   
          50 E. 78 St., Apartment 12A, New York, NY, 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 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 by the tenant's filing a Fair 
          Market Rent Appeal (FMRA) on November 14, 1988.  The tenant stated 
          that he had commenced occupancy of the subject apartment on November 
          1, 1988 pursuant to a two year vacancy lease at a monthly rent of 
          $4000.00.  The tenant also stated that he had not received a copy of 
          the initial registration.  

               In various submissions dated April 15, 1991, May 15, 1991 and 
          August 21, 1991,  the owner asserted the following in defense to the 
          complaint:  1) the proceeding should be held in abeyance until the 
          owner's action, then pending,  to rescind the lease was determined;  
          the owner was seeking rescission on the ground that the tenant had 
          fraudulently obtained the lease;  2) the complaint should be 
          dismissed as untimely because it was filed more than 90 days after 
          the initial registration (RR-1) and the notice of decontrol (DC-2) 
          had been served on the tenant;  further, the tenant's complaint was 
          not date stamped as received by the agency so that the tenant's 
          handwritten date of November 10, 1988 should be disregarded;  3)  
          the subject apartment is unique and thus not subject to a fair 
          market rent appeal;  there is no other apartment in the building 
          with the same number of rooms or the same square footage or a 
          woodburning fireplace;  4)  although smaller in size and not as nice 







          GA410181RO

          as the subject apartment, other apartments (with rent higher than 
          would be established by the Administrator for the subject apartment) 
          in the "A" line should be considered as comparables;  5)  the tenant 
          has not paid any rent since June 1989 and any refund that is ordered 
          should not include rent  that has not been paid;  6) the rent 
          includes a valuable financial option -  the right of first refusal  
          to either buy or rent another apartment.  

               In the order here under review, the Rent Administrator adjusted 
          the initial legal regulated rent by establishing the fair market 
          rent at $1307.41 effective October 1, 1988 and directed the owner to 
          refund excess rent to the tenant.  The fair market rent was 
          determined solely on the basis of the special fair market rent 
          guideline.

               In its appeal, the owner contends that based on its responses 
          in its submissions of April 15, 1991, May 15, 1991 and August 21, 
          1991 which are incorporated in the appeal, the Rent Administrator's 
          order should be revoked as arbitrary and capricious. 

               In reply to the owner's contentions, the tenant contends that 
          1)  the complaint was filed timely;  2) apartment 11A has the same 
          layout as the subject apartment and rents for much less;  3) the 
          comparables offered by the owner are ineligible because they are 
          rented for commercial use;  4) the option to buy or rent another 
          apartment has very little actual value.  

                After careful consideration, the Commissioner is of the 
          opinion that this petition should be denied.  

               Internal DHCR computerized rent records show that the tenant's 
          complaint was filed on November 14, 1988.  The fact that the 
          complaint was not date stamped by the DHCR does not show that the 
          complaint was not timely.  Since the tenant's initial lease 
          commenced October 1, 1988, the filing was well within the 
          statutorily required filing time (not more than 90 days after 
          service of a DC-2 notice or the RR-1).  The evidence indicates that 
          the tenant did not wait for service of  the RR-1 or DC-2.  
          Therefore, the return of these documents to the owner by the postal 
          authorities as undelivered was immaterial to the timely filing of 
          the complaint.  

               The Commissioner finds it is unnecessary to hold this 
          proceeding in abeyance until the rescission litigation is resolved 
          as the issue of the fair market rent for the subject apartment is 
          not limited by such litigation.  
             
               The owner has not established that the subject apartment is 
          unique and not subject to a fair market rent appeal.  Further, it is 
          noted that the owner was specifically advised that it could submit 
          comparability data for apartments in comparable lines in buildings 
          in the vicinity of the subject building since no apartments in the 
          subject premises were considered comparable.   

               Section 2522.3(e) of the Rent Stabilization Code provides in 
          pertinent part that in determining Fair Market Rent Appeals, 
          consideration shall be given to the applicable guidelines 
          promulgated for such purposes by the Rent Guidelines Board and to 


          GA410181RO

          rents generally prevailing for substantially similar housing 
          accommodations in buildings located in the same area as the housing 
          accommodation involved.

               The record reveals that the owner was given ample opportunity 
          to submit such comparables but that it failed to do so.  The 
          Commissioner finds that the housing accommodations submitted as 
          comparables do not meet the qualification, i.e. substantially 
          similar housing accommodations, set by the statute and that 
          therefore, the Administrator correctly excluded their rents in 
          determining the fair market rent.  

               The order herein appealed established the fair market rent and 
          directed the owner to refund any excess rent.  The order merely 
          directs the owner to return any excess rent paid by the tenant but 
          did not list a specific amount so that the owner has not been 
          directed to refund any excess rent not actually paid by the tenant.  

               There is no provision in the Rent Stabilization Law or Code 
          which permits the owner to add the cost of an option to buy or to 
          rent to the legal regulated rent, regardless of the value of said  
          option.  Accordingly, the Administrator did not err in not making an 
          allowance for the alleged option.
               
               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.  

               A copy of this order is being sent to the new owner of the 
          subject building.

               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
                                                                        
                                          LULA M. ANDERSON







          GA410181RO

                                          Deputy Commissioner




                     































    

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