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
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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 :
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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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