SJR7395, GC410188RO




                                  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  SJR 7395
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO. GC410188RO 
                                              :  DRO DOCKET NO. ZAJ410450R
          LENOX HILL APARTMENTS INC.             TENANT: Paula Bennett

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


               On March 20, 1992, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on       
          March 6, 1992, by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as   
          331 East 71 Street, New York, NY, apt. 3C,  wherein the Rent 
          Administrator determined the fair market rent.   

               Subsequent thereto, a proceeding pursuant to Article 78 of the 
          Civil Practice Law and Rules in the nature of mandamus was 
          instituted in the Supreme Court, New York County and the court 
          issued an order remitting the proceeding to the DHCR for an 
          expeditious determination.

               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 on October 27, 1986 by the 
          tenant's filing a rent overcharge complaint in which she questioned 
          the fair market rent .  The tenant stated that she had taken 
          occupancy of the subject premises on August 1,1986 pursuant to a one 
          year lease at a monthly rental of $1200.00.  The tenant further 
          stated that she believed the rent of the prior tenant had been 
          approximately $300.00.  In such complaint the tenant listed the 
          owner as Lenox Hill Apartments, Inc.

               In response to the complaint, the owner's managingagent stated 
          that the complainant was the first rent stabilized tenant of the 
          subject apartment, that the apartment had been rented to the tenant 
          at a rent lower than was permissible as an accommodation, and that 
          the owner had made various improvements at a cost of $3,779.48 while 
          the apartment was vacant.  The owner submitted invoices and 







          SJR7395, GC410188RO

          cancelled checks to substantiate the claimed improvements increase 
          and copies of the DC-2,the apartment registration,and the Landlord's 
          Report of Statutory Decontrol.  The owner also submitted various 
          apartments to be used in the comparability study.


               In Order Number ZAJ410450R, the Rent Administrator adjusted the 
          initial legal regulated rent by establishing a fair market rent of 
          $871.15 effective August 1, 1986, the commencement date of the 
          initial rent stabilized lease.  The fair market rent was determined 
          on the basis of the special fair market rent guideline and the 
          comparability study.  In addition, the Rent Administrator determined 
          that the tenant had paid excess rent of $ 11,177.13 through April 
          30, 1989, and directed the owner to refund such excess rent to the 
          tenant.

               In this petition, the owner alleges in substance that
          the Rent Administrator's order is incorrect: 1) the Rent 
          Administrator erred in computing the Fair Market Rent by failing to 
          use the 1986 MBR, by omitting from the comparability study  
          apartment 2B in the subject premises, the mirror image of the 
          subject apartment and by miscomputing the comparability rents;  2) 
          the Rent Administrator failed to include an increase for custom 
          built storm windows which were ordered before the tenant moved in 
          and installed after the tenant took occupancy;  3) the Administrator 
          should have included an increase for the installation of a new sink 
          and cabinet;  4) consideration should have been given to the fact 
          that the rent charged was a negotiated rent fully agreed to by the 
          tenant;  5) the tenant broke the lease and the owner should be 
          reimbursed for damages; and 6) finally, the owner contends that the 
          entire proceeding is defective as it names the wrong party as owner 
          and that due to this defect the tenant's complaint should have been 
          dismissed as untimely.  

               In answer to the appeal, the tenant contends that the Rent 
          Administrator's order is correct:  1) there is no evidence that 
          apartment 2B is a mirror image;  2) the tenant never consented to 
          the installation of storm windows;  3) the tenant enabled the owner 
          to receive higher rent in two apartments, the one she moved from as 
          well as the subject apartment;  4)  the tenant vacated the subject 
          apartment with the consent of the owner who re-rented it but has not 
          returned the security deposit;  5)  there is no proof that a new 
          sink and cabinet were installed; and, 6) the order names the 
          managing agent as owner but the complaint was filed against the 
          petitioner.  

               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 


          SJR7395, GC410188RO

          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 Commissioner finds that the Administrator computed the Fair 
          Market Rent correctly.   Review of the record reveals that the 
          instant fair market rent was determined on the basis of the 1984 
          Maximum Base Rent plus the 1986 fuel cost adjustment increased by a 
          special Fair Market Rent Guidelines and the comparability study plus 
          1/40th of the total cost of substantiated improvements.  When the 
          subject apartment was decontrolled, Special Guidelines Order Number 
          17 which required that the 1984 Maximum Base Rent be used in 
          computing fair market rents for apartments vacancy decontrolled 
          between October 1, 1985  and September 30, 1986  was in effect.  
          Accordingly, the Commissioner finds that the Administrator used the 
          appropriate Maximum Base Rent. 
           
               Of the apartments submitted for comparability, the 
          Administrator correctly determined that only apartments 3A and 2B at 
          330 E.71 Street qualified for the study.  Apartment 2B at 331 East 
          71 Street was ineligible for inclusion in the comparability study 
          since it was vacancy decontrolled and rented to the first rent 
          stabilized tenant in 1981 whereas the subject apartment was rented 
          to the first stabilized tenant in 1986.  Therefore, apartment 2B in 
          the subject premises was not rented to the first rent stabilized 
          tenant within a four year period prior to or a one year period 
          subsequent to the commencement of the initial lease for the subject 
          apartment and therefore cannot be used as a comparable pursuant to 
          Code Section 2522.3(e).  The Administrator used appropriate 
          percentages to update the rents of the comparable apartments.  

               With respect to the the increase permitted for improvements, 
          the Administrator correctly disallowed an increase for the 
          installation of storm windows. Section 2522.4(a) permits an owner to 
          take a rent increase of 1/40th the cost of improvements provided in 
          or to the tenant's housing accommodation on written tenant consent 
          to the rent increase.  In the case of vacant housing accommodations, 
          tenant consent is not required.  There is nothing in the record to 
          support the owner's contention that the replacement windows were 
          ordered  when the tenant took occupancy.  Since the installation was 
          effected after the tenant took occupancy, tenant consent was 
          required and there was no tenant consent so that the increase was 
          not warranted.  Moreover,if, in fact, the owner did install new 
          windows twice, once in 1986 after the tenant took occupancy, and 
          then again as part of the building wide installation, the owner 
          would be entitled to only one rent increase.    The Commissioner 
          notes that the owner was granted a Major Capital Improvements (MCI) 
          rent increase for replacement windows effective October 1, 1987.  
          Therefore, the Administrator did not err in denying an individual 
          apartment improvement rent increase based on the cost of new 
          windows.   

               The owner did not submit appropriate substantiating 
          documentation for an increase based on the installation of a new 
          sink and cabinet.  Therefore, the Administrator was correct in not 
          permitting an increase for these items.  







          GC410188RO


               Legal stabilized rents are those rents permitted pursuant to 
          the Rent Stabilization Law and Code.  The tenant is not bound by a 
          negotiated rent which exceeds the permissible rent.  

               The evidence of record indicates that the complainant vacated 
          the subject apartment in 1989.  The refund ordered encompasses only 
          the tenancy period.  Accordingly, the owner's claim for 
          reimbursement for damages caused by the tenant's vacating is more 
          properly brought in a court of competent jurisdiction.  

               The tenant's complaint which was filed against the petitioner 
          as owner of the subject building was answered by the owner's 
          managing agent who is considered an owner pursuant to Section 
          2520.6(i) of the Rent Stabilization Code.  Accordingly, the order as 
          issued is not defective.

               The owner is directed to roll back the rent to the lawful 
          stabilized rent consistent with this decision and to refund 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 herein may seek to enforce this order by filing an 
          appropriate action in a court of competent jurisdiction.  A copy of 
          this order is being sent to the tenant currently in occupancy at the 
          subject apartment.

               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



                     







          GC410188RO
































    

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