HC610087RO
                             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 No. 7215
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. HC610087RO

                                          :  DISTRICT RENT OFFICE
           Stanley Wasserman Real Estate,    DOCKET NO. FD610468-R
                                            
                                             TENANT: Elaine Feder             
                            PETITIONER    : 
      ------------------------------------X                             


           ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


      On March 30, 1993, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on February 24, 1993, by 
      the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 2100 Bronx Park East, 
      Bronx, New York, Apartment No. #5A, wherein the Rent Administrator 
      determined the fair market rent pursuant to the special fair market rent 
      guidelines promulgated by the New York City Rent Guidelines Board for 
      use in calculating fair market rent appeals. 

      Subsequent thereto, the petitioner-owner filed a petition in the Supreme 
      Court pursuant to Article 78 of the Civil Practice Law and Rules, in the 
      nature of mandamus, for a judgment directing the DHCR to render a 
      determination of the petitioner's administrative appeal.

      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 April 25, 1991 by the filing of a  
      complaint of rent overcharge by the tenant, who took occupancy pursuant 
      to a lease which commenced May 15, 1988 and expired May 31, 1990, at a 
      monthly rental of $795.00.  In her complaint, the tenant indicated that 
      she had received a copy of the initial apartment registration (Form RR- 
      1) for the subject apartment, but that said form did not include the 
      previous tenant's rent.  By letter dated June 24, 1991, the tenant 
      alleged that she was the first rent-stabilized tenant; that the previous 
      (rent controlled) tenant had been paying $343.32 per month in April, 
      1986; that her rent included an increase for major capital improvements 
      that had not been approved by the DHCR; that she believed that her 
      current rent was incorrect; and that she never received any notification 
      from the landlord of the Initial Legal Regulated Rent.








          HC610087RO

      In its answer, received by the DHCR on November 25, 1992, the owner, by 
      its attorney, alleged the following: that the tenant's fair market rent 
      appeal must be dismissed as untimely, since the tenant of record, the 
      husband of the complainant tenant, now deceased, had acknowledged 
      receipt of the apartment registration on May 17, 1988; that the tenant 
      of record had acknowledged receipt of a DC-2A form (Notice to Rent 
      Stabilized Tenant of Right to File a Fair Market Rent Appeal) on May 17, 
      1988; and that the tenant failed to file a timely fair market rent 
      appeal during the 90-day challenge period.  In support of its 
      assertions, the owner submitted a photocopy of the apartment 
      registration and DC-2A Form signed by the tenant of record dated May 17, 
      1988.

      By subsequent submission received on December 9, 1992, the owner 
      affirmed the following: that the claimant and her husband had previously 
      resided in one of the owner's neighboring housing accommodations; that 
      that apartment, previously rent controlled, became stabilized with their 
      occupancy; that, pursuant to the Rent Stabilization Code, the tenants 
      were served with the RR-1 and DC-2 forms for the prior premises, by 
      certified mail return receipt requested; that that envelope was returned 
      to his office unopened and unclaimed; that when the tenants chose the 
      subject premises, the owner personally served the husband, who executed 
      the lease, the Forms RR-1 and DC-2A, hoping to avoid any claim by the 
      tenants that they had not received same.  In support of these 
      allegations, the owner submitted photocopies of the lease of the 
      previous apartment, Forms RR-1 and DC-2 for the previous apartment, and 
      the undelivered envelope.

      On December 18, 1992 the tenant responded to the owner's answer, 
      alleging, among other things, that the RR-1 and DC-2A dated May 17, 1988 
      were never received; that neither the DC-2A notice nor the RR-1 Form 
      stated the prior tenant's rent; that it does not matter whether or not 
      the tenant's now-deceased husband showed the tenant his acknowledgment 
      of the RR-1, since that form was not completed properly; and that the 
      tenant did not, in fact, have a copy of this document. The tenant 
      further contended that the rent was not raised pursuant to rent 
      guidelines.

      In support of her assertions the tenant enclosed the following 
      documents: photocopies of Forms RR-1 and DC-2A for the subject 
      apartment; certified photocopies of the apartment registration from 1989 
      through 1991, and the 1984 initial registration.

      By submission received January 27, 1993, the owner, among other things, 
      reasserted that the tenant was served with the DC-2A and RR-1 forms, as 
      evidenced by the acknowledgment of receipt by the then tenant of record.

      On February 4, 1993 the owner was advised that its previous responses 
      failed to take into account the specific finding which had been mailed 
      to the owner on December 21, 1992, that the service of Forms DC-2A and 
      RR-1 on the tenant was ineffective because neither form contained the 
      required rent control information under Section 2528.2 of the Rent 
      Stabilization Code, and that, therefore, the proceeding was being 
      treated as a fair market rent appeal.

      On February 9, 1993 the tenant wrote to the DHCR contending, among other 
      things, that she has not received a signed lease for the period 
      commencing in June 1992.


          HC610087RO


      Under Docket Number FD610468-R, the Rent Administrator adjusted the 
      initial legal regulated rent by establishing a fair market rent of 
      $536.87 effective May 15, 1987, the commencement date of the initial 
      rent stabilized lease.  The fair market rent was determined solely on 
      the basis of the special fair market rent guideline.  In addition, the 
      Rent Administrator determined that the tenant had paid excess rent of 
      $10,868.89 through February 28, 1993, and directed the owner to refund 
      such excess rent to the tenant.

      Further, the Administrator determined that the preponderance of evidence 
      indicated that an initial apartment registration (Form RR-1) and a DC-2 
      notice were served on the husband of the complainant on May 17, 1988; 
      that subsequent to May 1, 1987 an owner was required to serve the Form 
      RR-1 rather than the DC-2 notice; that Section 2528.2 of the Code 
      requires that the initial apartment registration must state the Maximum 
      Base Rent (MBR) immediately prior to the date the apartment became 
      subject to the Rent Stabilization Law; that in this instance, it was 
      undisputed that the owner failed to advise the tenant of the immediately 
      prior MBR under Rent Control, and that, therefore, the registration 
      served on the tenant was incomplete and inadequate to commence the 
      running of the 90-day period in which to challenge the rent initially 
      charged the complainant.  Accordingly, this proceeding was treated as a 
      timely challenge to the $795.00 monthly rent commencing May 15, 1988.

      In this petition, the owner alleges in substance that he was not 
      provided with enough time to respond to DHCR requests for information; 
      that the DHCR wrongfully processed the case as a fair market rent 
      appeal, since the Administrator was in error in determining that the 90- 
      day challenge period had not begun; and that the DHCR had a duty to 
      inform him that the initial registration form was inadequate.  The owner 
      further contends that the proceeding below was expedited in violation of 
      his due process rights, in that the order was issued one day prior to 
      the owner's deadline to reply to the DHCR notice dated February 4, 1993.  
      With his petition, the owner submits a copy of a submission date-stamped 
      "received" by the DHCR on February 25, 1993.  The owner alleges that it 
      submitted no comparability data in the proceeding because it had not 
      been informed that service of the DC-2 and RR-1 forms was no longer an 
      issue.

      In an amendment to the petition for administrative review, the owner 
      seeks reversal based on an alleged impropriety in DHCR's expedited 
      processing of the case.

      The Commissioner is of the opinion that this petition should be denied.

      Pursuant to Section 2522.3 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 of the initial 
      lease for the housing accommodation involved; and 







          HC610087RO


      (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 
      accommodation involved.

      The record indicates that the owner's February 25, 1993 submission was 
      timely filed by the owner, but did not reach the Administrator prior to 
      issuance of the Administrator's order.  That submission will therefore 
      be considered at this time.

      Concerning the owner's allegation that no comparability data was 
      submitted to the Administrator because the owner had not been advised 
      that service of the DC-2 and RR-1 forms was no longer an issue, the 
      Commissioner finds that adequate opportunity was given the owner during 
      the proceeding before the Administrator to provide the requisite 
      information.  On October 15, 1992 the owner was provided with answer 
      forms requesting comparability data and on December 21, 1992 and 
      February 4, 1993 a Summary Notice was sent to the owner which provided 
      the owner with an opportunity to comment, and advised the owner that the 
      DC-2A and apartment registration forms were ineffective.  The owner's 
      February 25, 1993 submission included no comparability data, but rather 
      reiterated the owner's arguments that he had served Forms RR-1 and DC-2A 
      on the complainant tenant.

      The Commissioner finds that even if service of Forms DC-2A and RR-1 had 
      been accomplished, and acknowledged by the tenant, it would not be 
      sufficient to alter the outcome herein, since the new form of Form RR-1 
      was not utilized.  The Commissioner finds that the owner was under an 
      obligation to utilize the proper RR-1 form.  At the time the owner 
      served the initial registration form the new Rent Stabilization Code was 
      in effect.  Section 2523.1 of the new Code requires service of the 
      initial registration form and Section 2528.2 mandates that such form 
      contain the maximum rent immediately prior to the date that such housing 
      accommodations became subject to the Rent Stabilization Law or Code.  At 
      the time of service in this case, the revised registration instructions 
      were available and the new initial registration form had been 
      promulgated to implement the mandate of the Code.  It is undisputed that 
      the owner failed to advise the tenant of the immediately prior maximum 
      rent (MBR) under Rent Control.  The Commissioner finds that the initial 
      registration was rendered insufficient by the use of an improper form 
      and failure to include the required rent control data.  The Commissioner 
      notes that while the DC-2 notice provided for inclusion of rent control 
      data, the DC-2A which was used in this case did not provide for 
      inclusion of such data.  The DC-2A notice was not intended to stand 
      alone as a substitute for the initial registration.  Service of such 
      notice by the owner cannot compensate for the service of an inadequate 
      initial registration.  The Commissioner therefore finds that the 
      Administrator was correct in concluding that the tenant's period in 
      which to challenge the initial rent had not begun.

      Regarding the owner's allegation of impropriety in the DHCR's expedited 
      handling of the instant complaint, it is noted that DHCR Policy 
      Statement 91-4, "Expediting Proceedings" outlines those considerations 
      which warrant expedited processing of proceedings, at the discretion of 
      the Deputy Commissioner, for good cause shown.  Numerous filings by the 
      tenant adequately evidenced extreme hardship, and the Commissioner finds 
      that it was appropriate to expedite these proceedings.



          HC610087RO

      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.

      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





    

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