DHCR Decisions
FC 410280 RO
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.: FC 410280 RO
242 MOTT REALTY CORPORATION,
DRO DOCKET NO.: CA 410340 R
PETITIONER
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ORDER AND OPINION DENYING ADMINISTRATIVE APPEAL
On March 21, 1991 the above-named petitioner-owner filed an
Administrative Appeal against an order issued on February 14,
1991 by the District Rent Administrator, 92-31 Union Hall Street,
Jamaica New York, concerning the housing accommodations known as
242 Mott Street, New York, New York, Apartment 2B.
Subsequent thereto, the petitioner filed a petition in the
Supreme Court pursuant to Article 78 of the Civil Practice Law
and Rules requesting that the "deemed denial" of its
administrative appeal be annulled. On October 10, 1991, an order
was signed by Justice Ira Gammerman remitting the proceeding to
the Division for an expeditious determination of the owner's
administrative appeal.
The Administrative Appeal is being determined pursuant to the
provisions of 9 NYCRR 2522.3.
The issue herein is whether the District Rent Administrator's
order was proper.
A review of the record indicates that on January 25, 1988, the
tenant filed a Complaint of Rent Overcharge and/or Excess
Security Deposit wherein he stated that he moved into the subject
apartment on November 1, 1987 pursuant to a lease from November
1, 1987 to October 31, 1988 at a monthly rent of $950.00; that
the owner did not provide the tenant with a copy of the apartment
registration; that he is the first rent-stabilized tenant; that
about a month previously, he received Form DC-2A from the owner
showing that the last rent-controlled rent was $183.85; that it
is his understanding that the owner is entitled to an increase of
35% above the rent-controlled rent plus one-fortieth of the total
renovation cost; that the renovations consisted of the floor
being sanded and painted, the walls and ceilings being painted,
new cabinets being installed in the kitchen, a new stove, a new
refrigerator, a new sink in the bathroom, new tiles in the
bathroom, and five new storm windows; that he approximates the
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maximum renovation cost at $5,000.00; and that he therefore
believes that he is being overcharged by about $570.00 per month.
The tenant attached to his complaint a copy of the DC-2A Notice
to Rent Stabilized Tenant of Right to File a Fair Market Rent
Appeal which was signed by a the owner and dated November 2,
1987.
A copy of the tenant's complaint was mailed by the Division to
the owner on February 17, 1988. The owner responded on March 8,
1988 by stating that the subject apartment w s previously rent-
controlled; that the tenant is the first occupant after the
apartment was decontrolled; that the tenant's complaint of rent
overcharge is therefore not applicable and it is the
responsibility of the tenant to file the proper complaint; and
that at such time that the tenant files the proper complaint on
the proper forms, the owner will have no problem fully answering
such complaint.
On October 10, 1990, the Division re-served the tenant's
complaint on the owner together with a Notice to Owner of
Tenant's Fair Market Rent Appeal, a Notice of Clarification, a
Challenge to Fair Market Rent Answering Package, and a Request
for Additional Information/Evidence requesting certain rent
records and other evidence and advising the owner that it may
also submit comparability data.
On October 31, 1990, the owner responded that it had previously
answered the tenant's complaint by stating that at such time as
the tenant files the proper complaint, it will respond; that the
owner has now received a converted fair market rent appeal not
signed by the tenant and having the same docket number as the
previous rent overcharge complaint; and that at such time as the
proper complaint is sent to the owner on the proper forms with
the tenant's signature, it will fully answer such complaint.
On November 8, 1990, the Division mailed to the owner a Summary
Notice advising the owner of the subject apartment's 1986 Maximum
Base Rent and fuel cost adjustment; and further advising that the
fair market rent will be determined on the basis of such figures
increased by the appropriate Special Fair Market Rent Guidelines
Order. The owner was given twenty-one days within which to
respond.
On November 23, 1990, the owner replied by reiterating its
previous answers and stating that since the tenant had not signed
a fair market rent appeal within the specified time period, the
proceeding should be dismissed and all further action stopped.
On December 11, 1990, the Division mailed to the owner an Amended
Summary Notice on which the 1986 Maximum Base Rent figure was
revised.
On January 30, 1991, the owner again stated that since the tenant
has not signed a fair market rent appeal within the specified
time period, the proceeding should be dismissed and all further
action stopped.
No further reply from the owner was received and on February 14,
1991, the District Rent Administrator issued the order appealed
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herein.
The District Rent Administrator's order granted the tenant's fair
market rent appeal; determined that the fair market rent was
$322.26 per month during the lease term from November 1, 1987
through October 31, 1988; determined that the owner had
collected $24,551.63 in excess rent and excess security from the
tenant during the period from November 1, 1987 through October
31, 1990; and directed the owner to adjust the rent to the lawful
stabilized amount and make full refund to the tenant.
The fair market rent was determined solely on the basis of the
Special Guidelines Order No. 19 which was in effect when the
tenant took initial occupancy. The District Rent Administrator's
order noted that the owner failed to submit competent evidence of
comparability, as well as any evidence to substantiate claimed
renovations and new equipment allegedly installed in the
apartment.
On appeal, the petitioner-owner alleges, in substance, that the
proceeding was commenced by the tenant filing a complaint of rent
overcharge and/or excess security allegedly in January, 1988;
that on February 17, 1988, the Division forwarded the overcharge
complaint to the owner; that the owner filed an answer to the
overcharge complaint on February 17, 1988; that almost three
years later, the District Rent Administrator, sui sponte,
attempted to re-serve the tenant's complaint and convert same to
a fair market rent appeal; that in response, the owner noted that
the tenant did not file a fair market rent appeal within the
permissible time period and that any attempts to convert the
overcharge complaint to a fair market rent appeal were therefore
untimely; that, nonetheless, the District Rent Administrator
improperly treated the tenant's overcharge complaint as a fair
market rent appeal; that said unilateral conversion by the
District Rent Administrator is unfairly and impermissibly
prejudicial to the owner and represents a serious deprivation of
due process; that the owner previously served the tenant with a
notice of the tenant's right to file a fair market rent appeal
(Notice Form DC-2A); that the 90-day time period permitted for
the filing of a fair market rent appeal after service of t e DC-
2A notice had long since passed; that the Court held in East 7th
Street Assoc. v. DHCR, Index No. 13811/90, Justice Dontzin,
Supreme Court, State of N.Y. (Queens County) that the Division
may not convert a complaint of rent overcharge to a fair market
rent appeal; that had the tenant timely filed a fair market rent
appeal, the owner could have properly defended against it and
through the use of comparable apartments validated the initial
fair market rent; that in the event the processing of the
tenant's rent overcharge complaint as a fair market rent appeal
is upheld, the evidence of comparable rent which the owner
submitted with its administrative appeal should be applied to a
recalculation of the fair market rent; and that the rent should
be further adjusted for the new equipment and improvements which
were installed in the apartment when it was vacant just prior to
the commencement of the tenant's occupancy.
On April 22, 1991, the owner supplemented its administrative
appeal by submitting additional evidence of comparable rents and
of improvements to the apartment.
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After a careful consideration of the entire evidence of record
the Commissioner is of the opinion that the administrative appeal
should be denied.
The owner's argument that the tenant's complaint of January 25,
1988 did not constitute a valid fair market rent appeal is
without merit. Said complaint, which was filed within ninety
days of the tenant's having received the DC-2A form, was clearly
and unambiguously a challenge of the initial stabilized rent
charged for the apartment. The tenant stated that he was the
first rent-stabilized tenant; that he was challenging his initial
rent; that he recently received the DC-2A Notice Form; and that
the owner would only be entitled to an appropriate adjustment of
the last rent-controlled rent. The owner was clearly on notice
that this proceeding involved a fair market rent appeal. This is
not a case in which an overcharge complaint was later converted
to a fair market rent appeal. The nature of the complaint was
obvious from the start.
The Commissioner notes that the Court's decision in East 7th
Street Assoc. v. DHCR is being appealed. It has be n the long-
standing policy of the Division to consider any complaint or
application filed with the Division on the merits of the issues
actually raised, regardless of the form used. Moreover, in 1988,
at the time the instant complaint was filed, there was no
separate form in use specifically for Fair Market Rent Appeals.
The record reveals that the owner was repeatedly afforded
opportunities to submit comparability data and evidence to
substantiate improvements to the apartment in connection with the
processing of the tenant's fair market rent appeal, but that the
owner steadfastly refused to avail itself of such opportunities.
The District Rent Administrator properly determined the fair
market rent appeal on the basis of the owner's default.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this administrative appeal be, and the same hereby
is, denied, and that the order of the District Rent
Administrator be, and the same hereby is, affirmed.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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