GF-210204-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.: GF-210204-RO

                   SBARRO REALTY, INC.,          DRO DOCKET NO.:  DF-210187-R

                                                 TENANT.: CYNTHIA/REUBEN AHING  
                                   PETITIONER    
          ------------------------------------X                             

                  ORDER AND OPINION REMANDING PROCEEDING ON APPEAL 


          On June 23, 1992, the above-named petitioner-owner timely filed (as 
          explained below) a Petition for Administrative Review against an 
          order issued on November 15, 1991, by a Rent Administrator, 
          concerning the housing accommodations known as 1703 65th Street, 
          New York, Apartment No. 1 Front, wherein the Rent Administrator 
          determined that the owner had overcharged the tenant.

          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 in June 1984 by the filing 
          of a rent overcharge complaint by the tenant.  The owner did not 
          submit an answer to the complaint.

          In Order Number DF-210187-R, the Rent Administrator determined that 
          the tenant had been overcharged in the amount of $20,100.28, and 
          directed the owner to refund such overcharge to the tenant.

          In this petition, the owner contends in substance that this is a 
          timely PAR because the Agency never served the complaint or Order 
          on the owner using the owner's correct address.  The owner asserts 
          that it first received notice of the proceeding on May 22, 1992 
          when the tenant entered a judgment against the owner in Civil 
          Court; that the original Order dated November 15, 1991 was issued 
          against J. Sbarro 1705 65th Street, Brooklyn, New York 11204; that 
          a second Order was mailed on May 19, 1992 which changed the name of 
          the owner to Sbarro Realty Inc. but kept the same issuance date; 
          that the owner's correct address is 763 Larksfield Road, Commack, 
          New York 11725; that there is a restaurant located at the subject 
          building called "Sbarro The Italian Eastery," but that the 
          restaurant is separate and distinct from "Sbarro Realty Inc."; that 
          in general mail mistakenly sent to the restaurant is forwarded to 
          the owner's Commack Office, but the owner never received the 
          November 15, 1991 Order; that the Commack office did receive the 
          May 19, 1992 Order forwarded from the restaurant on or about May 







          GF-210204-RO

          27, 1992; and that the owner thereafter filed this timely PAR.

          The owner further contends that there is no overcharge because the 
          subject building is not subject to the Rent Stabilization Law and 
          Code in that the subject building contains 4 apartments over a 
          store and is separate and apart from the neighboring building at 
          1705 65th Street so as not to constitute a horizontal multiple 
          dwelling pursuant to Section 26-505 of the Rent Stabilization Law; 
          that the two buildings have separate water, sewers, chimneys, 
          entrances, stairways, mailboxes, bell/buzzer, electric source, gas, 
          tax lots and certificates of occupancy, and the premises are 
          separated by a firewall and have no shared use of space.

          In answer to the owner's petition, the tenant states in substance 
          that the PAR is not timely due to the fact that the owner received 
          adequate notice.  The tenant states that the owner admitted that it 
          receives mail at the subject premises despite the fact that its 
          corporation is headquartered in Commack.  The tenant submits a copy 
          of the mortgage for the subject premises which indicates that the 
          owner has an office at the subject premises in Brooklyn.  The 
          tenant additionally claims that the subject premises is a 
          horizontal multiple dwelling because it has a shared heating 
          boiler, and contains 6 apartments located above the "Sbarro food 
          store" which occupies the entire ground floor.  The tenant asserts 
          that the owner sealed two doors connecting the buildings.

          The Commissioner is of the opinion that this petition should be 
          remanded to the Rent Administrator for additional processing.

          Regarding the owner's contention that it was never served with the 
          complaint or the Order at its correct address, the record in this 
          case indicates that the complaint and Order were mailed to the 
          address provided by the complaining tenant, which was the subject 
          premises.  It is uncontested that the owner does not have a realty 
          office at the subject premises, but does generally receive mail 
          forwarded from the restaurant.  However, the owner asserts that in 
          this case, the complaint and November 15, 1991 Order were not 
          forwarded to it.  The documentation submitted by the tenant is not 
          dispositive as to the owner's business address.  The Commissioner 
          finds that service on the owner at the subject premises cannot be 
          considered proper service where the maile was not forwarded since 
          this was not the owner's correct business address.  Moreover, since 
          it is not clear if the subject premises are subject to rent 
          stabilization, the owner had a reasonable basis to believe that it 
          was not required to register its address with the Division of 
          Housing and Community Renewal (DHCR).  Based on the circumstances 
          in this case as explained above, the Commissioner finds that this 
          petition is timely.

          Turning to the merits of the owner's petition, the Commissioner 
          notes that in Salvati v. Eimicke, 537 NYS 2d 16, the Court of 
          Appeals held that the DHCR should consider several factors before 
          determining whether particular buildings are separate entities or 
          constitute a horizontal multiple dwelling subject to regulation 
          including the existence of common ownership, management and 
          operation and facilities, and that no one factor can be said to be 
          dispositive.



          GF-210204-RO

          Accordingly, the Commissioner is of the opinion that this 
          proceeding must be remanded to the Rent Administrator for 
          additional fact finding including a physical inspection, an 
          opportunity for both sides to submit additional evidence and a 
          hearing, if warranted.  Further if it is found that the subject 
          premises are a horizontal multiple dwelling, a finding must be made 
          on the issue of whether in the circumstances of this case any 
          overcharge could be considered willful warranting the imposition of 
          treble damages.  If it is found that the subject premises do not 
          constitute a horizontal multiple dwelling, then a finding must be 
          made that the subject apartment is not subject to the Rent 
          Stabilization Law and Code and there is no rent overcharge.

          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, granted to the extent of remanding this proceeding 
          to the Rent Administrator for further processing in accordance with 
          this Order and Opinion.  The automatic stay of so much of the Rent 
          Administrator's order as directed a refund is hereby continued 
          until a new order is issued upon remand.  However, the 
          Administrator's determination as to the rent is not stayed and 
          shall remain in effect, except for any adjustments pursuant to 
          lease renewals, until the Administrator issues a new order upon 
          remand.



          ISSUED



                                                                      
                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner





    

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