DOCKET NO.:  EJ210461RT
                              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       :  SJR NO. 6730, 6492
     APPEAL OF                                    ADMINISTRATIVE REVIEW  
                                               :  DOCKET NOS. EJ210461RT
               NILDA ROMERO,                      D.R.O. DOCKET NO. DG210003UC
                           PETITIONER          :  OWNER:  FISHER ASSOCIATES
     ------------------------------------------X   


               MODIFIED ORDER AND OPINION REMANDING PROCEEDING TO THE
                            RENT ADMINISTRATOR UPON REMIT


     This Order and Opinion is issued after an Order of the Supreme Court, County 
     of Kings, Justice Irving S. Aronin, dated May 11, 1993, which ordered remit 
     of an Article 78 Proceeding, Index Number 44242/92, directing the Division to 
     reconsider its former Order and Opinion issued on October 15, 1992, upon 
     which the Court proceeding was based.

     That Order and Opinion itself was issued pursuant to a Mandamus Order after 
     an Article 78 Proceeding before the Supreme Court, County of Kings, Justice 
     Held, dated August 11, 1992, Index Number 21893/92, which directed the 
     Division to issue an Order and Opinion in the underlying Petition for 
     Administrative Review on or before October 22, 1992.

     On October 24, 1990, the above named petitioner-tenant filed a Petition for 
     Administrative Review against an order issued on September 28, 1990, by the 
     Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, concerning 
     housing accommodations known as Apartment 3L, 1090 Flastbush Avenue, 
     Brooklyn, New York, wherein the Rent Administrator determined that the 
     subject premises was not subject to Rent Stabilization.

     The issue in this appeal is whether the subject premises are stabilized.

     The applicable sections of the Rent Stabilization Code (Code) are Sections 
     2520.11(d) and 2527.3(a).

     The Commissioner has reviewed all of the evidence in the record and has 
     carefully considered that portion of the record relevant to the issues raised 
     by the administrative appeal.

     The owner commenced this proceeding on July 7, 1989 by filing an application 
     to determine whether the subject apartment was exempt from the Rent 
     Stabilization Law on the basis that it is located in a building containing 
     less than six dwelling units.


     In the body of the application the owner stated that the building known as 
     1090 Flatbush Avenue is also known as 2118 Cortelyou Road.  However, in the 






          DOCKET NO.:  EJ210461RT

     same sentence it was stated that the premises consist of two separate 
     buildings, each containing four dwelling units and therefore not subject to 
     the Code.

     Attached to the application was a copy of order number ZAA200383RV, issued 
     June 24, 1987, in which the Administrator directed the owner to issue the 
     tenant (petitioner herein) a renewal lease pursuant to the Code.  The order 
     identified the premises as apartment 3L, 1090 Flatbush Avenue.

     Also attached to the application was a Notice of Proceeding to Modify the 
     order (CDR 27,411) in Docket No. K-3103561-R, dated June 9, 1987, and the 
     June 16, 1987 Order to Revoke the same order (CDR 27,411).  These documents 
     refer to a tenant named Bernard Glover in apartment 3L at 2118 Cortelyou 
     Road.  Nevertheless, the owner claimed in his application to have believed 
     that these documents referred to the June 24, 1987 order number ZAA-200383- 
     RV.  The June 24, 1987 order was appealed by the owner under docket number BG 
     210348RO.

     Also attached was a copy of tenant Glover's answer in K-3103561-R in which 
     the tenant stated that his building, 2118 Cortelyou Road is registered as 
     1086 Flatbush Avenue and his building address is 1090 Flatbush Avenue.  He 
     further stated that 2118 Cortelyou is "part of" 1086 Flatbush and together 
     they have one boiler, eight apartments and six stores.

     Also attached were two Certificates of Occupancy (COs) dated January 29, 1987 
     and May 18, 1987, respectively, for 1090-92 Flatbush Avenue and 2112-2122 
     Cortelyou Road A/K/A 1086-88 Flatbush Avenue showing four apartments and two 
     stores (1090-92) and six stores and four apartments (2112-2122 A/K/A 1086- 
     1088).  Both CO's show the same block and lot number.

     In addition the owner attached copies of the following three orders:

     CDR 27,411 as amended (BL210010RP [K3103561R]) regarding tenant Glover at 
     apartment 3-C (sic) 2118 Cortelyou Road, dated June 27, 1988; ZAH210553R 
     (later corrected to ZAJ210553R), regarding a tenant Chaturnal at apartment 2- 
     L, 1090 Flatbush Avenue, dated August 16, 1988; and ZBL2100003UC, regarding 
     tenant Glover at apartment 3-C, 2118 Cortelyou Road, dated May 25, 1988.  In 
     all three orders the Administrator found the subject building to be exempt 
     from stabilization on the basis that it had less than six dwelling units.

     In an November 29, 1989 answer to the owner's application, tenant Nilda 
     Romero asserted that the two buildings constitute a horizontal multiple 
     dwelling consisting of eight apartments and seven stores.  In support of this 
     conclusion she states that both buildings have the same owner, the same 
     boiler, the same block and lot number, are registered as one building known 
     as 1090 Flatbush Avenue with the City Department of Housing Preservation and 
     Development (HPD), and they "may" share the same water main.  The tenant 
     requests a hearing and inspection if the Division deems her assertions 
     inadequate.

     On January 26, 1990 the tenant submitted a copy of a deed which allegedly 
     showed the properties were purchased as one building known as 1090 Flatbush 
     Avenue.  (The dimensions in those deed correspond to those of the entire 
     block 5164 lot 9 on a map submitted by the tenant.  This is the block and lot 
     the tenant asserted above that was common to both buildings.)





          DOCKET NO.:  EJ210461RT

     In a response dated February 5, 1990, the owner cited the orders submitted 
     with its application and said that since certain of these orders, which found 
     the buildings to be exempt from stabilization, were not appealed they 
     constitute the law with respect to the subject premises and are therefore 
     binding on tenant Romero as well.

     On May 3, 1990, the Administrator sent the owner a notice requesting the 
     following information:


               "1.  Certificate of Occupancy in effect as of May 
                    31, 1968.
                2.  Certificate of Occupancy in effect as of 
                    present date.
                3.  Tax, lot and block number (Tax bills since 
                    1984).
                4.  Water, sewer bills.
                5.  Rent Roll for subject premises (apt. number, 
                    tenants date of initial occupancy, Rental 
                    amount).
                6.  Any altered building application filed.
                7.  When/If the sewer lines, electrical system, 
                    water lines and boiler system separated.
                8.  Copy of Deed.
                9.  Any other pertinent information regarding the 
                    status of the subject premises."


     The file contains no response by the owner to this request.

     On August 8 and 20, 1990, the subject premises were inspected by the Division 
     under the docket number DG210003UC.  The inspector found that each building 
     has separate bell systems, entrances, chimneys and basements.  The inspector 
     was unable to gain access to determine whether the water mains, sewer pipes, 
     lighting systems, electric meters, or gas connections were separate or 
     common.  However, the inspector found a common boiler (at 2118 Cortelyou 
     Road) and that the buildings which are adjacent, "share[d] the same roof 
     space," and had identical front facades.

     The Administrator's file also contains a copy of a 1987 inspection report 
     under docket number K 3103561-R in which the inspector found that the sewers, 
     electrical systems, gas system, basements, entrances, water systems and roofs 
     were separate.  That inspector also found a common heating system,  but did 
     not comment on the facades.  Nevertheless, the inspector concluded that the 
     "buildings comprise[d] a single multiple dwelling."  [As noted above, the 
     Administrator in that proceeding originally found the premises to be 
     stabilized but later revoked that order and found them to be exempt, based on 
     a similar finding in another order (ZBL2100003UC), issued May 25, 1988.]

     In order number ZDG210003UC, herein under review, the Administrator found, 
     based on the October 20, 1987 and August 8, 1990 inspections, and "pursuant" 
     to the Administrator's Order number ZBL210003UC, issued May 25, 1988, that 
     the subject apartment is exempt from the Rent Stabilization Code.  The 
     Administrator noted that the courts had found that buildings containing only 
     one common facility, such as a boiler, do not constitute a horizontal 
     multiple dwelling within the meaning of Code Section 2520.11(d).

     In this petition the tenant contends that the Administrator's order is 






          DOCKET NO.:  EJ210461RT

     incorrect and should be reversed because the buildings comprise a horizontal 
     multiple dwelling for the reasons stated in her answer to the owner's 
     application.  In addition, the tenant alleges that "an inspection of the 
     exterior of the building shows that the entire structure was built as a 
     single unit;" that there appear to be only one water main (at 1090 Flatbush) 
     which supplies water to both buildings; that the dry cleaner at 2118 
     Cortelyou Road "appears" to have a water tank, the water for which "upon 
     information and belief" comes from the water main at 1090 Flatbush Avenue.

     In answer to the tenant's petition the owner contends the Administrator's 
     order is correct and should be confirmed because the buildings do not 
     constitute a horizontal multiple dwelling and therefore the tenant's building 
     is not subject to the Rent Stabilization Code, being a building with less 
     than six dwelling units.

     The owner agrees that the two buildings are heated by a common boiler, but 
     asserts that the commonality has only existed since 1986, prior to which 
     there were separate boilers.

     The owner asserts that the buildings were not constructed as a single unit, 
     citing the DHCR's inspections.

     The owner states "upon information and belief" that there are separate water 
     mains for the two buildings.

     Regarding the registration of 1090 Flatbush Avenue with HPD, the owner 
     asserts that 21-18 Cortelyou Road is not covered by that registration, being 
     a separate building.  1090 Flatbush Avenue, although having only four 
     dwelling units is nevertheless classified as a multiple dwelling by HPD but 
     this fact does not imply that the two buildings constitute a horizontal 
     multiple dwelling within the meaning of the Rent Stabilization Code.

     The owner contends this petition should be decided in accordance with prior 
     Administrative decisions involving the same premises but different tenants in 
     which the buildings were found to be separate and not subject to stabiliza 
     tion.  Not to do so would cause "mass confusion and, in effect, rescind three 
     prior decisions".

     In response to the owner's answer the tenant contends that the owner "has 
     completely overlooked the fact that the original certificate of occupancy 
     dated April 1, 1925 (sic) indicates that the building consists of seven (7) 
     [dwelling] units and 9 stores."  Attached to the response is a copy of a 
     certified copy of a certificate of occupancy for 1086/92 Flatbush Avenue, 
     southwest corner at Cortelyou Road, stating the building has 9 stores and 7 
     family units.  The tenant notes that the 1987 Certificates of Occupancy 
     submitted by the owner were issued subsequent to the commencement of the 
     tenant's occupancy and argues that an owner "cannot remove his property from 
     Rent Stabilization by subsequently changing the certificate of occupancy."




          DOCKET NO.:  EJ210461RT


     Also attached to the tenant's response is a copy of the October 20, 1987 
     inspection report issued under docket number K 3103561-R, cited above, in 
     which the inspector stated "both buildings comprises of a single multiple 
     dwelling (sic)."

     Finally the tenant argues that the ruling in ZBL2100003UC, involving a 
     different tenant, "did not raise the issues presently in front of the DHCR 
     and therefore it is not relevant to this case."

     The Commissioner is of the opinion that this proceeding should be remanded to 
     the Administrator for further processing.

     Code Section 2520.11(d) generally excludes from Rent Stabilization buildings 
     with fewer than six housing accommodations on the date the building first 
     became subject to the Rent Stabilization Law (RSL).  However, the section 
     further provides that:


               "a building shall be deemed to contain six or more 
               housing accommodations if it was part of a multiple 
               family garden-type maisonette dwelling complex containing 
               six or more housing accommodations having common facili 
               ties such as a sewer line, water main or heating plant 
               and was operated as a unit under common ownership on the 
               date the building or complex first became subject to the 
               RSL, notwithstanding that Certificates of Occupancy were 
               issued for portions thereof as one or two-family dwell 
               ings."


     The Court of Appeals has affirmed the Division's interpretation that the 
     corresponding provisions of the RSL and ETPA apply to non-garden type 
     horizontal multiple dwellings.  Salvati v. Eimicke, 537 N.Y.S.2d 16 (Ct. App. 
     1988), motion for reargument or reconsideration denied, 540 N.Y.S.2d 1006.

     If the premises constituted a horizontal multiple dwelling within the meaning 
     of the Code so as to be subject to stabilization on the base date or any time 
     thereafter, it would not lose the status if subsequently some or all of the 
     common facilities were separated.  Certainly, the 1987 Certificates of 
     Occupancy showing four units are insufficient proof of separateness.  The Law 
     and Code are explicit on this issue - even where the certificates were in 
     effect on the base date.

     Accordingly, the Administrator was correct to request proof of when or if the 
     water, sewer, electric and/or heating facilities were separated.  Also 
     requested was the certificate of occupancy in effect on the base date.  The 
     owner failed to either submit the requested evidence or allege that none 
     existed.

     On appeal the tenant has shown that in 1925 the buildings had a common 
     certificate of occupancy showing seven dwelling units.  However, although the 
     copy was certified in 1985, it does not necessarily follow that the 
     certificate was in effect on the base date.  There could have been another 
     certificate issued between 1925 and 1987.


     The tenant is correct that the decisions, involving other tenants in the 






          DOCKET NO.:  EJ210461RT

     subject buildings, which found the premises not to be subject to Stabiliza 
     tion, are not per se controlling on the tenant-petitioner.  The doctrine of 
     collateral estoppel can not be used against a non-party so as to deny the 
     non-party of her "day in court."

     Furthermore, the Commissioner notes that in order number ZAA200383RV, issued 
     June 24, 1987, the Administrator granted the tenant-petitioner's complaint of 
     failure to renew her lease.  The owner answered that complaint on the merits, 
     submitting prior leases which did not name the complainant.  Those leases 
     stated explicitly that the subject apartment was stabilized.  [Only in 
     appealing that order did the owner raise the jurisdictional issue.  As stated 
     above, that appeal is still pending under docket number BG210348RO.]

     On the other hand, the owner is correct that a grant of the tenant's 
     petition, i.e., finding the premises stabilized would either create 
     inconsistencies within the buildings or require the rescinding of the 
     conflicting orders.

     Accordingly, on remand the Administrator should give notice to all potential 
     ly effected tenants as well as new or prior owners in all related buildings 
     that the order on remand will be binding on them, and give each the 
     opportunity to submit evidence on the issue of jurisdiction.  The order on 
     remand will resolve this issue finally for the buildings as a whole, even if 
     it has the effect of superseding prior inconsistent orders.

     The Commissioner recognizes that this is an extreme remedy.  However, the 
     Commissioner has previously held that this remedy is required to prevent the 
     confusion and unfairness of having some units in the same complex stabilized 
     because the complex has been determined by the DHCR to be a horizontal 
     multiple dwelling of six or more units and to have other units not stabilized 
     based on a contrary ruling by the Division regarding the same complex.  See  
     Administrative Review Docket Number ARL10651Q/ARL11161Q, issued November 7, 
     1991.

     Furthermore, the Division can reconsider any order on its own initiative if 
     the order is found to be the result of fraud, illegality or irregularity in 
     the vital matter.  Policy Statement 91-5 defines illegality as "[a]n action 
     by DHCR which is contrary to the principles of law representing a complete 
     defect in the proceedings."  Surely, a determination that a building or 
     complex is exempt from the Rent Stabilization Law without notice to all 
     tenants in the building or complex violates due process.  Indeed, Section 
     2527.3(a) of the Rent Stabilization Code, which codifies this due process 
     right, requires the DHCR to serve a copy of any application, complaint or any 
     answer or reply thereto on all parties adversely affected thereby.

     In addition, Policy Statement 91-5 defines "irregularity is a vital matter" 
     as a "[f]ailure by the agency to...comply with established rules of practice 
     and procedure."  Surely the failure to comply with due process and Section 
     2527.3(a) falls within this definition.

     For the reasons stated above it is unnecessary to consider the res judicata 
     effect of those Administrator's orders which found the complex to be exempt.

     On remand the owner will have the opportunity to submit evidence that the 
     1925 Certificate of Occupancy was not in effect when the building could have 
     first become subject to Stabilization, presumably May 29, 1974, the effective 
     date of the Emergency Tenant Protection Act, since Division records show that 
     the premises were formerly rent controlled.  In any case, the Administrator 


          DOCKET NO.:  EJ210461RT

     should take evidence from all parties on the elements of commonality which 
     existed on that date.  The burden of proof will be on the owner to prove the 
     building(s) are exempt from the Stabilization Law.

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

     ORDERED, that this petition be, and the same hereby is, granted to the extent 
     of remanding this proceeding to the Rent Administrator for further processing 
     in accordance with this Order and Opinion.  Until and unless an order to the 
     contrary is issued on remand all the dwelling units of the entire premises 
     [2112-2122 Cortelyou Road AKA 1086-1088 Flatbush Avenue and 1090-1092 
     Flatbush Avenue] shall be treated prospectively as stabilized (unless exempt 
     for other reasons, e.g., coverage by Rent Control).  For example, a tenant 
     covered by a prior order finding his or her apartment not covered by 
     Stabilization now has the right to, e.g., a stabilized renewal lease at 
     lawful Guidelines increases over the rent existing on the day of the prior 
     Guidelines period.  However, this present order does not now require a rent 
     rollback to stabilized levels for a lease entered at a time when a order was 
     in effect which declared the premises covered by the lease not to be subject 
     to stabilization.

     ISSUED:


                                                                                
                                                      JOSEPH A. D'AGOSTA
                                                      Deputy Commissioner




    

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