Adm. Rev. Docket No.: GI420265RT
                                 STATE OF NEW YORK 
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          IN THE MATTER OF THE ADMINISTRATIVE  SJR 7122                      
          APPEAL OF                           
                                               ADMINISTRATIVE REVIEW         
                                               DOCKET NO.: GI420265RT  
           KATHLEEN O'REILLY,         
                                               DRO DOCKET NO.:     
                                                      FD 430014 UC   
                                PETITIONER     OWNER: AHMED NAJI         

                                ADMINISTRATOR'S ORDER

          The above-named petitioner-tenant timely filed a Petition for 
          Administrative Review (PAR) against an order issued on July 31, 
          1992, by the Rent Administrator at Gertz Plaza, Jamaica, New York, 
          concerning housing accommodations known as Apartment 3 at 246 East 
          23rd Street, New York, New York, wherein the Administrator 
          determined the owner's application for a determination as to 
          whether or not the subject apartment was exempt from regulation by 
          finding that that apartment is not subject to regulation under the  
          Rent Stabilization Law and is not situated in a horizontal multiple 
          dwelling containing six or more units.

          On June 29, 1993, the Commissioner issued an order and opinion 
          wherein said PAR was granted. Thereupon the owner sought judicial 
          review of that order and opinion in the Supreme Court for New York 
          County (Naji v DHCR ., Index No. 121853/93). Thereafter, the Court 
          issued an order remanding the matter to the Division pursuant to a 
          stipulation entered into between the owner and the Division.

          The proceeding below was commenced by the owner's application for 
          a determination of the status of the subject apartment. The owner 
          filed said application during the pendency of the tenant- 
          petitioner's application for an order directing the owner to issue 
          a renewal lease in accordance with the Rent Stabilization Law and 
          Code. The tenant's proceeding, to which Docket No. ED 410043 RV had 
          been assigned, was terminated without prejudice to the tenant's 
          rights to a renewal lease; depending on the determination made with 
          respect to the owner's application.

          Both below and on this appeal, the owner has, in substance,

          Adm. Rev. Docket No.: GI420265RT

          asserted that the subject building is separate and distinct from 
          the surrounding buildings and that it does not constitute a 
          component of a horizontal multiple dwelling.

          Both below and on appeal, the petitioner-tenant has, in substance, 
          taken the position that: the subject building is one of several 
          buildings occupying the Eastern half of the block bound by East 
          23rd Street on the North, Second Avenue on the East, East 22nd 
          Street on the South and Third Avenue on the West (Block 903), which 
          have been owned and operated, from at least 1955 up until around 
          1983, as a single complex of rental units; up until 1983 the heat 
          and hot water for the subject building, and others in the complex, 
          had been furnished from the boiler in the building known as 235 
          East 22nd Street (one of the other buildings in the alleged 
          complex) and 235 East 22nd Street contains well over six units 
          itself; that the issue herein has been litigated between the owner 
          and the other tenant of the subject building (there being now only 
          three residential occupants of the subject building: the owner, the 
          petitioner-tenant and the other tenant, the tenant of Apt. 4) and 
          that the Housing Court's dismissal of the owner's Holdover Petition 
          upon a determination that the other tenant's apartment was subject 
          to rent stabilization bars the owner from asserting that the 
          petitioner-tenant's apartment is not subject to regulation and is 
          not a part of a horizontal multiple dwelling containing six or more 
          housing units.

          The Administrator issued his order after receiving the report of 
          the February 26, 1992 inspection conducted by a DHCR staff 
          inspector. The Administrator had instructed the inspector to 
          examine, and report on, the present condition of the subject 
          building. Relying on said report, the Administrator determined that 
          the subject apartment is not part of a horizontal multiple dwelling 
          containing six or more housing units.

          The Commissioner finds that the Housing Court decision issued by 
          Judge Spires in the holdover proceeding relating to Apartment 4 
          does not bar the owner from seeking a determination that the 
          subject apartment (Apartment 3) is exempt from regulation. In order 
          to effect a collateral estoppel against one of the litigants in a 
          proceeding, a determination must be res judicata as to the 
          litigants in that proceeding. That would not appear to be the case 
          as to the litigants in the Apartment 4 holdover proceeding were 
          they to come before the Division on the issue of whether Apartment 
          4 is rent stabilized (the Commissioner cautions the reader that no 
          issue as to Apartment 4 may be deemed to be determined in this 
          Order and Opinion). Moreover, Judge Spires did not reach the issue 
          of whether the subject building is subject to rent stabilization on 
          the basis that it was part of a horizontal multiple dwelling on the 
          base date, but merely determined that the tenant of apartment 4 was 
          protected by rent stabilization  based on Judge Spires's reading of 
          the records of the Division for that apartment. Therefore Judge 

          Adm. Rev. Docket No.: GI420265RT

          Spires's determination is limited to the apartment that was the 
          subject of the proceeding before him: Apartment 4 and cannot 
          collaterally estop the owner before this Agency as to Apartment 3.

          The Commissoner notes that under the established law, whether the 
          subject building may be deemed subject to the Rent Stabilization 
          Law as part of a complex that was a horizontal multiple dwelling 
          containing six or more residential units depends on whether it was 
          part of such a complex on May 6, 1969. Shubert v. DHCR 162 AD2d 
          261, 556 N.Y.S.2d 618 (1st Dept, 1990) 

          The Commissioner has determined that it will serve the best 
          interests of all concerned to have this question finally resolved 
          in the proceeding commenced hereinbelow, the Commissioner believes 
          that this matter should be remanded to the Administrator for 
          additional factfinding and, thereafter, reconsideration of the 
          owner's application. The issue to be determined is whether the 
          building was part of a horizontal multiple dwelling as of the base 
          date, May 6, 1969.

          The Commissioner directs that a hearing be held on remand. The 
          Commissioner believes that this matter will best be resolved upon 
          the parties being afforded a full opportunity to present evidence; 
          including the testimony of any witnesses who were familiar with the 
          management, operation and detailed physical layout of the alleged 
          complex on May 6, 1969 and whatever other evidence may be available 
          that provides explicit information about the subject building and 
          the alleged complex on that date.

          THEREFORE, pursuant to all of the applicable statutes and 
          regulations, it is

          ORDERED, that this Petition be, and the same hereby is granted to 
          the extent that the Administrator's order be, and the same hereby 
          is revoked and that this proceeding be and the same hereby is 
          remanded to the Administrator for processing in accordance with 
          this Order and Opinion.


                                        JOSEPH A. D'AGOSTA
                                        Deputy Commissioner



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