SJR6945, HC410059RO
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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.IF410014RP,
HC410059RO
Moonglo, Inc. : DRO DOCKET NO. AG410415-R
TENANT: Juan Aroca/Lisa
PETITIONER : Mastropole
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On March 22, 1993, the above-named petitioner-owner refiled a
Petition for Administrative Review against an order issued on
December 6, 1991, by the Rent Administrator, 92-31 Union Hall
Street, Jamaica, New York, concerning the housing accommodations
known as 201 East 38th Street, New York, NY apartment no. 6, 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 owner's original appeal was dismissed as untimely
and the owner subsequently instituted a proceeding pursuant to
Article 78 of the Civil Practice Law and Rules in the Supreme Court
New York County seeking reversal of the dismissal order. By order
dated July 29, 1993,the proceeding was remitted to the DHCR for
processing the appeal on the merits,
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 by the filing of a fair market
rent appeal on June 27, 1986 by the former tenant, Juan Aroca. The
tenant stated that he was the first rent stabilized tenant to occupy
the apartment and that while the rent prior to his occupancy
was $102.83, he was paying $574.00 which was the highest rent in the
subject building. The tenant stated also that the tenancy had begun
pursuant to a one year vacancy lease commencing January 1, 1986,
that he had first moved to the subject apartment on January 15, 1986
and that he had never received a copy of the apartment registration
form(RR-1 form).
The record indicates that ownership of the subject building
changed several times during the pendency of this proceeding and
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that the petitioner took title in 1988.
On October 14, 1991, in response to the complaint, the owner
stated that the complainant had been evicted and was precluded from
filing a Fair Market Rent Appeal because he had been served with a
DC-2 notice on January 22, 1986 and the statutory time to file the
appeal had expired within ninety (90) days thereafter. The owner
submitted proof which allegedly had been found in the records of a
prior owner, a copy of an envelope postmarked January 22,1986
which had been mailed by certified mail to the complainant at the
subject address. Notations on the envelope indicated that the
recipient was deceased and that said envelope had been returned
unopened to the owner. The owner stated that although said envelope
was still sealed, it believed that a DC-2 notice and the initial
apartment registration were contained therein. The owner requested
that a hearing be held to resolve the issue of whether proper
service had been effected.
Subsequent thereto, the Administrator advised that since the
tenant's initial lease commenced February 1, 1986, proof of service
of the RR-1, dated January 22, 1986, a date prior to the
complainant's tenancy, was not proof of valid service and that the
proceeding would be processed as a Fair Market Rent Appeal.
In a response dated October 30, 1991, the owner disputed the
Administrator's conclusion based upon the lease commencement date
and submitted evidence - i.e. the tenant's complaint in which the
tenant stated that he had been in occupancy on January 15, 1986 and
a transmittal letter from the rental broker, enclosing a money order
of $203.85 representing rent for January 20, 1986 to January 31,
1986- that notwithstanding the lease commencement date, the tenancy
had actually begun before service of the RR-1 and the DC-2 on the
tenant on January 22, 1986. The owner again requested dismissal
of the fair market rent appeal as untimely.
In the order issued on December 6, 1991, the Rent
Administrator, determining that the appeal was timely and that the
tenant was eligible to file a fair market rent appeal, adjusted the
initial legal regulated rent by establishing a fair market rent of
$417.78 effective February 1, 1986, 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 its appeal, the owner contends that the Rent Administrator's
order should be reversed for the following reasons:
1. although the owner's submission of October 30, 1991 was timely
received by the DHCR, the Administrator failed to consider the
import of the submission, thus depriving the owner of an opportunity
to be heard with a consequent denial of due process;
2. the Administrator's failure to set forth the facts and evidence
relied upon to sustain the timeliness of the Fair Market Rent Appeal
constituted a further violation of the owner's due process;
3. because the tenant was properly served with a DC-2 notice by
certified mail, the complaint should have been dismissed;
4. the Administrator arbitrarily disregarded documentary evidence
of the tenant's actual date of occupancy when in fact the tenant had
admitted the alleged date of occupancy and there had been no
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statement from the tenant disputing same. Any factual dispute
concerning the validity of the service should have been resolved at
a hearing which the owner had requested.
Although afforded the opportunity to do so, the current tenant,
Lisa Mastropole, who has been substituted for the complainant,
failed to respond to the petition.
With due regard for the owner's due process rights, the
Commissioner has given full consideration to all of the owner's
submissions and to the entire record and is of the opinion that this
petition should be denied.
Section 2522.3(a) of the Rent Stabilization Code provides that
where the firsttenant taking occupancy after December 31, 1973 of a
housing accommodation previously subject to the City Rent Law (rent
control) was served with the notice required by Section 26 of the
former Rent Stabilization Code (DC-2 notice), the time within which
such tenant may file a fair market rent appeal is limited to 90 days
after such notice was mailed to the tenant by the owner by certified
mail.
The mailing requirement imposed by Section Code 2522.3(a) are
reasonably calculated to provide notice to the first stabilized
tenant of the right to challenge the initial stabilized rent. The
record indicates that the prior owner ostensibly complied with these
mailing requirements. However, the envelope's return with the
notation "deceased" by the postal authorities should have provided
notice to the owner that the tenant had not been given the
requirednotice. Valid service has been upheld where a tenant fails
to claim the mailing or where a tenant refuses the mailing. There
is no evidence in the record that the tenant refused to claim or to
accept the certified mail. The owner's statement that it believed
that the tenant's father had the same name and had died at that time
is not sustained by the record. Moreover, a case for refusal is not
made out by the allegation. The owner knew that the tenant was
alive and paying rent and by the return of the unopened certified
mail, that the tenant had not received notice of his right. The
record confirms, despite the tenant's statement on the complaint and
the broker's transmittal letter regarding commencement of the
tenancy, that the lease commenced February 1, 1986. Given the
apparent lack of receipt of notice by the tenant and the ambiguity
regarding the commencement date of the tenancy, the Commissioner
finds that the owner did not serve a valid DC-2 notice on the
complainant. Therefore, the tenant's application was timely and the
Administrator was correct in processing the tenant's fair market
rent appeal.
Pursuant to Code Section 2527.5, the granting or ordering of a
hearing is discretionary. Where it is possible to resolve an issue
without holding a hearing, as is the case herein, a hearing will not
be ordered.
The owner is directed to roll back the rent to the lawful
stabilized rent consistent with this decision.
The owner is directed to reflect the findings and
determinations made in this order on all future registration
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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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