HI210004RO

                                  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. HI210004RO
               EQUITY INVESTMENTS/            :  DRO DOCKET NO.CI210009RP
               JRD MANAGEMENT CORP.              TENANT: A. & L. FINTZ
                                PETITIONER    : 
          ------------------------------------X                             
             ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


               On September 7, 1993, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on August 
          4, 1993, by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as 
          1680 Ocean Avenue, Brooklyn, New York, Apartment No. 4K, wherein the 
          Rent Administrator determined the fair market rent pursuant to the 
          special fair market rent guideline promulgated by the New York City 
          Rent Guidelines Board for use in calculating fair market rent 
          appeals.
               
               The Commissioner notes that this proceeding was filed prior to 
          April 1, 1984.  Sections 2526.1 (a) (4)  and 2521.1 (d) of the Rent 
          Stabilization Code (effective May 1, 1987) governing rent overcharge 
          and fair market rent proceedings provide that determination of these 
          matters be based upon the law or code provisions in effect on March 
          31, 1984.  Therefore, unless otherwise indicated, reference to 
          Sections of the Rent Stabilization Code (Code) contained herein are 
          to the Code in effect on April 30, 1987.

               The Administrative Appeal is being determined pursuant to the 
          provisions of Section 26-513 of the Rent Stabilization Law.

               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 by the tenant's filing of a rent 
          overcharge complaint in September, 1983.  On May 21, 1986, the Rent 
          Administrator issued an order under docket TC75886G finding a rent 
          overcharge of $27,088.92 based upon the owner's failure to submit a 
          complete rental history.  The owner then filed a petition for 
          administrative review against such order and on August 30, 1988, 
          under docket ARL11264K, the Commissioner issued an order revoking 
          the Rent Administrator's order on the basis that the prior tenant 
          was rent controlled and the tenant herein was the first rent 
          stabilized tenant so that it could not be said that the owner had 
          failed to submit a complete rental history.  In said order, the 









          HI210004RO




          Commissioner remanded the proceeding to the Rent Administrator to 
          treat the tenant's complaint as a fair market rent appeal.  In such 
          remanded proceeding, the owner was afforded an opportunity to submit 
          comparability data to help determine the fair market rent.

               In Order Number CI210009RP, the Rent Administrator adjusted the 
          initial legal regulated rent by establishing a fair market rent of 
          $332.93 effective January 14, 1981, the commencement date of the 
          initial rent stabilized lease.   The Rent Administrator also 
          directed that the owner refund excess rent of $8,247.61 to the 
          tenant. 

               In this petition, the owner alleges in substance that the Rent 
          Administrator erroneously and arbitrarily established an Initial 
          Legal Regulated Rent "in complete derogation of any and all 
          submissions, documentation, leases, all previously made in this 
          proceeding and related Rent Overcharge proceedings".

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

               Section 26-513 of the Rent Stabilization Law provides in 
          pertinent part that fair market rent adjustment applications are to 
          be determined by the use of special fair market rent guidelines 
          orders promulgated by the New York City Rent Guidelines Board and by 
          the rents generally prevailing in the same area for substantially 
          similar housing accommodations.  In order to determine rents 
          generally prevailing in the same area for substantially similar 
          housing accommodations, it is DHCR's procedure for fair market rent 
          appeal cases filed prior to April 1, 1984 to allow owners to submit 
          June 30, 1974 fair market rent data for complete lines of 
          apartments, beginning with the subject line.  The average of such 
          comparable rentals will then be updated by annual guidelines 
          increases.  Alternatively, DHCR procedure allows owners to have 
          comparability determined on the basis of rents charged after June 
          30, 1974.  In order to use this method, owners were required prior 
          to November 1, 1984 to submit rental history data for all stabilized 
          apartments in the subject premises and subsequent to November 1, 
          1984 to submit such data for complete lines of apartments beginning 
          with the subject line.  Post June 30, 1974 rent data will be 
          utilized if the comparable apartment was rented to a first 
          stabilized tenant within one year of the renting of the subject 
          apartment and if the owner submits proof of service of a DC-2 Notice 
          or apartment registration form indicating that the rent is not 
          subject to challenge.

               In the instant case, the owner was afforded an opportunity to 
          submit June 30, 1974 or post June 30, 1974 (updated comparability 
          data) during the course of the overcharge and fair market rent 
          proceedings before the Rent Administrator.  The owner also submitted 
          comparability data in the earlier PAR proceeding under docket number 






          HI210004RO


          ARL11264K.  However, the owner failed to submit usable comparability 
          data in that it submitted maximum base rents for apartments in the 
          "K" line in 1974, added 15% to such rents allegedly pursuant to Rent 
          Guideline Board Order No. 6B and added appropriate guideline rent 
          increases for each year from June 30, 1974 to the date the 
          complainant took occupancy in order to get a fair market rent.  This 
          is not acceptable comparability data as the owner was required to 
          submit comparability data on rent stabilized apartments and not rent 
          controlled apartments.  Further, the owner submitted lease 
          information on apartments 3K and 5K after said apartments were 
          decontrolled but did not submit proof as to when such apartments 
          were decontrolled or proof that the initial rents of such apartments 
          were not subject to challenge as required.  

               In addition, an examination of the records in this case shows 
          that the fair market rent was correctly determined using the correct 
          1980 maximum base rent of $277.90 plus 15% pursuant to special 
          guidelines order 12 plus an improvement increase of $13.34 resulting 
          in a fair market rent of $332.93.  Accordingly, the Rent 
          Administrator's order was warranted.
               
               The record reveals that the tenant vacated the subject 
          apartment and that the subject apartment has been purchased as a 
          cooperative.

               In the event the owner does not take appropriate action to 
          comply with this order within sixty (60) days from the date of 
          issuance of this order, the tenant may seek to enforce this order by 
          filing an appropriate action in a court of competent jurisdiction.  
          It is noted that the Rent Administrator's order stated that the 
          order may be filed and enforced as a judgment.  This language is 
          incorrect and accordingly the following phrase is hereby deleted 
          from the Rent Administrator's order: "In the event the owner fails 
          to make the refund within the time limit as specified in this order 
          the tenant may file and enforce this order as a judgement of the 
          Supreme Court once the time has expired for an Appeal from this 
          Order".

               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 as modified 
          herein.

          ISSUED

                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner





                     







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