GH 430145-RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                               DOCKET NO.:   
                                                  GH 430145-RO             
                 TIMSTON CORPORATION,
                                                  RENT ADMINISTRATOR'S
                                                  DOCKET NO.:    
                                  PETITIONER      FK 430016-B  


          On August 17, 1992, the above-named petitioner owner filed a 
          Petition for Administrative Review (PAR) against an order issued on 
          July 21, 1992, by the Rent Administrator at Gertz Plaza, Jamaica, 
          New York, concerning the housing accommodations known as 250 East 
          39th Street, New York, New York, wherein the Administrator deter- 
          mined the tenants' complaint of building-wide service decreases.

          The challenged order granted the tenants rent reductions based on 
          the results of an inspection conducted on April 14, 1992 that found 
          evidence of hairline cracks in the west lobby wall, and unpainted 
          plaster in the north lobby wall, a cracked lobby closet door with 
          a defective lock, elevator fans that were not operating at the time 
          of inspection, evidence of vermin waste droppings and of peeling 
          paint and plaster in the basement laundry area, and accumulation of 
          newspaper bundles in the basement elevator area.

          On appeal, the owner requests that the rent reduction order be re- 
          voked on substantive grounds, in that all services are maintained, 
          and on procedural grounds, asserting that it never received a copy 
          of the complaint.  The owner also asserts that some of the 
          signatures on the complaint were fraudulent.

          Several tenants responded that the service decreases continue 
          unabated, particularly the vermin infestation.  However, at least 
          four tenants support the owner's claims.  In signed statements, 
          they assert that, in fact, they had not signed the complaint or 
          that the nature of the document was misrepresented to them, and 
          that services are maintained.

          GH 430145-RO

          Concerning the owner's suggestion of procedural irregularities, the 
          owner claims that it " . . . never received proper notification 
          concerning this Docket No. (FK 430016-B).  The only papers . . . 
          received from the Division of Housing and Community Renewal (DHCR), 
          was the actual order itself reducing the rents, dated July 21, 1992 
          . . . "

          The case docket containing the record below was stolen and has not 
          been recovered to date.  The circumstances of the theft are 
          detailed in a Police Complaint, identified as NO. 25260, dated 
          August 25, 1992, Command 014. 

          Measures were therefore taken to reconstruct the file in accordance 
          with DHCR procedures for recreating a lost file.

          The parties were requested to submit copies of any documents in 
          their possession pertaining to these proceedings.

          The tenants' submissions included the original Notice and Trans- 
          mittal of Tenants' Complaint (Form RA-104), dated December 5, 1991.  
          This form is, in fact, the Division's notice to the owner of the 
          tenant's complaint.

          The fact that the original notice was submitted by the tenant is 
          conclusive evidence that the owner was not properly served by the 
          Division with notice concerning the complaint.  The fact that the 
          tenant may have sent a copy of the complaint to the owner contem- 
          poraneously with filing the complaint with the Division did not 
          serve to cure the procedural defect. 

          Since the owner was never properly served with the notice of the 
          complaint, the owner was denied the opportunity to be heard.  This 
          lack of due process warrants revocation of the building wide rent 
          reduction order, notwithstanding that some conditions constituting 
          service decreases were confirmed on inspection.

          The matter must, therefore, be remanded to the Administrator for 
          further processing.  The owner has acknowledged receipt of the July 
          21, 1992 order herein under review.  The date thereof shall be 
          considered the date of notice of the proceedings to the owner.  The 
          parties shall be provided copies of the record to date, in accord- 
          ance with the normal procedures including service of the complaint 
          on the owner.  They shall be afforded the opportunity to submit 
          additional evidence and shall be afforded the opportunity to com- 
          ment thereon.  At the Administrator's discretion, an inspection may 
          be conducted.

          GH 430145-RO

          The owner acknowledges receipt of the July 21, 1991 Administrator's 
          rent reduction order, which afforded the owner notice of the defec- 
          tive conditions reported by the inspector on April 14, 1992.  If on 
          remand, a rent reduction is found to be warranted, it should be 
          effective as of August 1, 1992, the month following issuance of the 
          Administrator's order.

          The owner's allegation of fraud against one tenant notwithstanding, 
          the record, as reconstructed, reveals that the overwhelming number 
          of tenants have not retracted their signatures from the complaint.  
          The owner's assertions on appeal are not sufficient to establish 
          the claim of fraud.  However, on remand, the tenants who assert 
          they did not knowingly sign the complaint should be afforded the 
          opportunity to withdraw from the proceeding. 

          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          it is

          ORDERED, that the owner's petition be, and the same hereby is, 
          granted, and the Administrator's rent reduction order is revoked. 
          It is further 

          ORDERED, that the proceedings be remanded to the Administrator to 
          reconsider the tenants' complaint of building-wide service de- 
          creases as provided above.  It is further 

          ORDERED, that the tenants' rents be restored to pre-reduction 
          levels plus any guidelines, or other increases, as may be appli- 
          cable.  Rent arrears may be due the owner from the tenants as a 
          result of this order.


                                                JOSEPH A. D'AGOSTA
                                                Deputy Commissioner


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