ADM. REVIEW DOCKET NO. HE420181RO
                                  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. HE420181RO 

                                                  DISTRICT RENT
                                                  ADMINISTRATOR'S DOCKET
                                                  NO. EE420091F 
          RUDD REALTY MANAGEMENT CORPORATION,
                                   PETITIONER
          ------------------------------------X

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

               On May 18, 1993, the above-named landlord filed a petition for 
          administrative review of an order issued on April 16, 1993 by a 
          Rent Administrator concerning the housing accommodation known as 
          Apartment 503, 219 West 86th Street, New York, New York.

               The subject tenant filed with the rent agency a challenge, 
          dated April 26, 1990, to the "Landlord's Report and Certification 
          of Fuel Cost Adjustment and Eligibility" for 1990.  In his 
          challenge the subject tenant asserted, among other things, that the 
          subject landlord was not eligible for an increase in fuel cost 
          adjustments as there were outstanding findings of harassment 
          against the subject building.

               In the order under review herein, the Administrator revoked 
          the landlord's fuel cost adjustment for 1990 as the record reflects 
          that there was an outstanding finding of harassment against the 
          subject building since May 4, 1981.

               In its petition the subject landlord alleges, among other 
          things, that the Administrator's order does not state a reason why 
          the landlord's fuel cost adjustment for 1990 has been revoked; that 
          on March 29, 1990 the subject tenants were served with a "Notice to 
          Tenant of Fuel Cost Adjustment Form"; that the subject tenant filed 
          a challenge to the landlord's fuel cost certification report on May 
          24, 1990; that the tenant's challenge should have been dismissed as 
          it was filed untimely; that the provisions of the rent laws and 
          regulations do not require an automatic revocation of rent 
          adjustments when there is an outstanding finding of harassment 
          against a building; that the revocation of rent adjustments when 
          there is a finding of harassment is discretionary, not mandatory; 
          that fuel cost adjustments are not considered rent, but they are 














          ADM. REVIEW DOCKET NO. HE420181RO

          compensation for the landlord's fuel costs; that, the landlord 
          states:  "To deny the Owner its 1990 Fuel Cost Adjustment is to 
          deny this Owner the ability to pay for fuel, which will only 
          adversely affect the tenants residing in this building," and that 
          the revocation of the 1990 fuel cost adjustment is unconstitutional 
          as it deprives the subject landlord of its right to "enjoy a fair 
          return on its investment."

               In his answer the subject tenant asserts, among other things, 
          that the tenant timely filed the aforementioned challenge, and that 
          the subject landlord has not provided heat and hot water to all of 
          the apartments.

               To his answer the tenant attaches, among other things, a copy 
          of an order issued by the rent agency on May 4, 1981 under 
          Enforcement Case NOS. 6940/81-HL, 7027/88-HL, and 7238/39-HL which 
          determined that the landlords of the subject premises were engaging 
          in conduct which constituted harassment.  The tenant also attaches 
          a copy of a Commissioner's order issued on May 26, 1992 under 
          Enforcement Case NO. 4647L which denied the landlord's application 
          to terminate a finding of harassment.

               After careful consideration, the Commissioner finds that the 
          subject landlord's petition should be denied.

               The record reflects that there has been an outstanding finding 
          of harassment against the subject premises since May 4, 1981.  The 
          Commissioner finds that the subject landlord has not submitted any 
          evidence showing that the rent agency's finding of harassment had 
          been removed prior to the applicable time period.

               Even if the subject tenant's aforementioned challenge were 
          dismissed, the Commissioner finds that the Administrator's order 
          under review herein would still not have been disturbed.  The 
          revocation of the landlord's 1990 fuel cost adjustment was based on 
          an outstanding finding of harassment against the subject premises 
          by the rent agency, and that it was not based on the filing of the 
          tenant's challenge.  

               As the Administrator's order under review herein pointed out 
          that there has been an outstanding finding of harassment against 
          the subject building, the Commissioner finds that that constituted 
          a sufficient explanation to the parties as to the Administrator's 
          reason for revoking the fuel cost adjustment for 1990.

               The Commissioner finds that the revocation of the landlord's 
          fuel cost adjustment for 1990 by the Administrator was proper.

               

               Section 2206.5(a)(3) of the City Rent and Eviction Regulations 
          provides that when the rent agency issues an order finding that the 






          ADM. REVIEW DOCKET NO. HE420181RO

          landlord is engaging in conduct constituting harassment, as in this 
          proceeding, the Administrator may "refuse to credit any adjustments 
          increasing rent mandated by Part 2202 of this title," and the 
          Administrator may "dismiss any application for an adjustment 
          pursuant to said section for such time and under such terms and 
          conditions as the Division of Housing and Community Renewal deems 
          necessary to prevent circumvention or evasion of the Rent Law and 
          these regulations."

               The Commissioner points out that Section 2202.13 of the City 
          Rent and Eviction Regulations is the relevant rent regulation 
          pertaining to fuel cost adjustments.  As the above-mentioned rent 
          regulation is contained in "Part 2202" of the Rent and Eviction 
          Regulations, the Commissioner finds, pursuant to Section 
          2206.5(a)(3) of the City Rent and Eviction Regulations, that the 
          revocation of fuel cost adjustments when there is an outstanding 
          finding of harassment is proper pursuant to the rent regulations 
          and laws.

               As to the landlord's assertion that fuel cost adjustments are 
          not rent,and for that reason they should not be revoked in this 
          proceeding, the Commissioner finds that that assertion is without 
          merit.

               The Commissioner notes that fuel cost adjustments are not 
          incorporated into the maximum base rent or the maximum rent, 
          pursuant to Section 2202.13(i) of the City Rent and Eviction 
          Regulations.  However, the Commissioner finds that a fuel cost 
          adjustment, while not included in the maximum rent, is considered 
          to be rent, and furthermore, increases and decreases to the fuel 
          cost adjustment is considered to be a rent adjustment.  The 
          Commissioner points out that the provisions of Section 2202.13 of 
          the City Rent and Eviction Regulations refer to fuel cost 
          adjustments as, among other things, rent adjustments or rent 
          increases (e.g., Sections 2202.13(a), 2202.13(b)(7), 2202.13(c)(3), 
          2202.13(d), 2202.13(e), 2202.13(f), 2202.13(h), 2202.13(j), and 
          2202.13(k) of the City Rent and Eviction Regulations).

               As to the landlord's assertion that the Administrator's order 
          under review herein has denied it the ability to pay for fuel, the 
          Commissioner finds that that assertion, even if true,does not 
          warrant a revocation of the Administrator's order under review 
          herein.  The Commissioner finds that the landlord's remedy is to 
          file an application with the rent agency to revoke the outstanding 




          finding of harassment against the subject premises.  However, if 
          such an application were granted by the rent agency, the 
          Commissioner is of the opinion that the landlord would not be 
          entitled to any retroactive rent increases.












          ADM. REVIEW DOCKET NO. HE420181RO


               As to the subject landlord's assertion that the determination 
          in the Administrator's order under review herein is 
          unconstitutional, the Commissioner finds that that assertion is 
          without merit.  The Commissioner points out that the courts have 
          determined that the rent control laws and regulations are 
          constitutional.

               Accordingly, the Commissioner finds that the landlord's 
          petition should be denied.

               THEREFORE, in accordance with the City Rent and Rehabilitation 
          Law and the Rent and Eviction Regulations, it is

               ORDERED, that this petition be, and the same hereby is, 
          denied, and that the Rent Administrator's order be, and the same 
          hereby is, affirmed.

          ISSUED:





                                                                          
                                             JOSEPH A. D'AGOSTA
                                             Deputy Commissioner
    

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