BG 210383 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          APPEAL OF                               DOCKET NO.:  BG 210383-RO

                  A & A REALTY COMPANY,
                                                  D.R.O ORDER NO.:  ZK 005144-R
                                                  TENANT:  RIVA EZEKOWITZ

                                       IN PART

          On  July  17,  1987  the  above-named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          June 16, 1987,  by  the  Rent  Administrator,  92-31  Union  Hall
          Street, Jamaica,  New  York,  concerning  housing  accommodations
          known as Apartment 5B, 1280 East 12th Street, Brooklyn, New York, 
          wherein the Rent Administrator determined that there had been  an
          overcharge and ordered a refund of  $928.21,  including  interest
          and excess security.

          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 tenant commenced this  proceeding  on  October  21,  1985  by
          filing an overcharge complaint alleging that her initial two year 
          lease commencing June 1, 1985 had a rent of $510.00, whereas  the
          prior rent had been $278.00.  The tenant noted that the rent  had
          been  raised  an  unspecified  amount  for  a   new   stove   and
          refrigerator and "other work," including new windows installed in 
          1983.  More specifically, she claimed the owner was charging  two
          much for work and equipment such as $4,100.00 for a new sink  and
          cabinets for which the tenant alleged she priced a comparable set 
          for approximately $2,000.00.

          In answer to the complaint, the tenant alleged that the April  7,
          1984 registered rent was $278.40 and the  prior  tenant  had  not
          challenged that figure, although given the opportunity to do  so.
          Proof of service of the registration forms was submitted.

          In addition the owner submitted  documentation  of  $7,110.84  in
          improvements to the subject apartment,  including  $1,050.00  for
          six thermal  windows.   ($362.63  for  floor  scraping  was  also
          alleged, but not included in the $7,110.84 total.)

          Based thereon the  owner  contended  it  was  allowed  a  $177.77
          increase so that the tenant's initial rent was lawful.

          BG 210383 RO

          In Order Number  ZK  005144-R,  herein  under  review,  the  Rent
          Administrator determined that the prior rent of $278.40  was  the
          base rent and allowed the owner a rent increase  of  one-fortieth
          of $6,060.84 ($151.52), being all the alleged improvements except 
          for the $1,050.00 for windows and the $362.63 for floor scraping. 
          The windows were disallowed because they were part of a building 
          wide improvement.

          In  this   petition,   the   owner   contends   that   the   Rent
          Administrator's Order is incorrect and should be modified because 
          the Administrator should have either allow d  the  owner  a  one-
          fortieth increase for the windows,  or  used  the  Major  Capital
          Improvement (MCI) increase therefor (Z-KCS 000490-OM, issued June 
          18, 1986) to offset the overcharge.   The  owner  submitted  rent
          calculations for each alternative.  In addition the owner alleges 
          certain spelling errors in the Administrator's  Order.   Finally,
          the owner contends that the  Administrator's  Order  was  invalid
          since it was not signed.

          In answer to this petition, the tenant contends  that  the  order
          should be upheld because  neither  the  floor  scraping  nor  the
          windows should be part of the rent increase for improvements.  In
          addition,  the  tenant  alleges  that  the  cost  of  the   other
          improvements was "exorbitant" and that she had not been given  an
          opportunity  to  challenge  the  owner's   evidence   for   these
          improvements.  She asks for a hearing on this issue.

          Regarding the owner's calculations  in  which  the  windows  were
          treated as part of an MCI, the tenant states that the  MCI  order
          allowed a 7.69% increase based on the March 1985  rent  ($278.40)
          rather than on the $475.86 determined by the Administrator to  be
          the lawful June 1, 1985.  (The owner used the  latter  figure  in
          its calculations.)  The tenant showed the owner's calculations in 
          a column marked "A", her corrections in "B" and said that "Column 
          C" would show an even lesser lawful rent if the tenant were given 
          the opportunity to challenge the cost of the other improvements.

          In addition, the tenant alleges her initial lease did not contain 
          a  clause  specifically   authorizing   an   MCI   increase   for
          improvements already applied for.  Accordingly, she contends that 
          she could not be charged for the MCI until Jun  1,  1987  and  no
          part of the retroactive  portion  of  the  MCI  increase  can  be
          charged to her.

          Finally, she alleges that no kitchen floor was ever installed.

          In a reply dated December 1,  1987  the  owner  (1)  alleges  the
          tenants answer was  untimely,  (2)  notes  that  the  "Column  C"
          referred to by the tenant does not  appear  in  her  answer,  (3)
          points out  that  the  $362.63  floor  scraping  charge  was  not
          included  in  the  increase  for  improvements  granted  by   the
          Administrator, (4) alleges that  an  owner  is  not  required  to
          renovate at the lowest possible price, (5) notes that the  tenant
          did not file a timely  petition,  implying  that  the  tenant  is
          limited in her answer to this petition  to  those  issues  raised

          Regarding  the  tenant's  allegation  that  her   vacancy   lease

          BG 210383 RO
          contained no clause specifically informing her of a  pending  MCI
          application, the owner alleges that the tenant had  been  give  a
          copy  of  the  Rent  Stabilization  Rider  but  "she  refused  to
          acknowledge its receipt."  In  addition,  the  owner  notes  that
          paragraph 31 of her lease obligates both  parties  herein  to  be
          bound by determinations made  by  the  Division  of  Housing  and
          Community Renewal (DHCR) and in particular requires the tenant to 
          pay any rent increase "in the manner set by the DHCR."

          Finally the owner states its willingness to waive those  portions
          of the MCI increase which were not for windows  if  the  tenant's
          original "preferential" rent of  $510.00  is  deemed  to  be  the
          lawful rent.

          The Commissioner is of the opinion that this petition  should  be
          granted in part.

          At   the   outset   the   Commissioner   hereby   modifies    the
          Administrator's order to show the owner as A & A  Realty  Company
          c/o Ralph Akselrad  and  the  prior  tenant  as  Molly  Weitzman.
          Furthermore, the Commissioner hereby finds that the fact that the 
          Administrator's order was unsigned does not invalidate the order. 
          The Administrator's log sheet clearly shows that  the  Order  was
          issued as intended, i.e., with a base  rent  of  $278.40  and  an
          increase for improvements limited to $151.52.

          The Commissioner notes that Division policy allows an  answer  to
          be considered even if not received within the time limit.  Hence, 
          the  tenant's  answer  to  this  petition  will  be   considered.
          However, the owner is correct that the tenant's  answer  must  be
          limited to the issues raised in the owner's petition.

          Most importantly, her request for  a  hearing  to  challenge  the
          owner's costs for  various  improvements  could  only  have  been
          raised in a timely petition of her own.  Similarly, the  tenant's
          contention that the floor scraping should have been  excluded  by
          the Administrator  could  only  have  been  raised  in  a  timely
          petition.  Nevertheless, the Commissioner notes that the owner is 
          correct that in fact the Administrator did not include that  cost
          in computing the rent increase for improvements.

          It remains only to discuss the heart of the  owner's  appeal  and
          the tenant's  reply  thereto,  i.e.,  whether  the  Administrator
          should have granted the owner a rent increase for the cost of the 
          thermal windows.

          Since the owner had applied for and received a building-wide  MCI
          increase  which  included  the  cost  of   those   windows,   the
          Administrator was clearly correct not to grant the own r  a  one-
          fortieth increase for the  same  improvement.   Furthermore,  the
          record indicates that  the  windows  were  installed  before  the
          vacancy   prior   to   the   complaining   tenant's    occupancy.
          Accordingly, no increase for  an  improvement  to  an  individual
          apartment could be granted  without  the  proof  of  the  consent
          thereto  by  the  tenant  in  occupancy  at  the  time   of   the

          Therefore, the owner can only get an increase for the windows  as
          part of the MCI increase granted on June 16, 1986 in order number 

          BG 210383 RO
          Z-KCS  000490-OM,  which  also  included  increases  for   doors,
          pointing and waterproofing.  This order granted a 7.69%  increase
          for stabilized apartments, to be computed from  the  March,  1985
          rent for each such apartment.

          Thus, the tenant is correct  that  the  7.69%  increase  must  be
          computed from $278.40 rather than from $475.86, the  lawful  rent
          established by the Administrator  for  the  complaining  tenant's
          June 1, 1985 two year vacancy lease.

          Furthermore, Section 2522.5(d)(4) of the Code requires that  when
          an MCI application is pending at the commencement  of  a  vacancy
          lease,  the  owner  may  not  collect  such  increase  until  the
          expiration of the vacancy  lease  unless  the  lease  contains  a
          clause stating "that such application is pending before the  DHCR
          and the basis for the adjustment, and that the increase which  is
          the subject of such appliction,  if  granted,  may  be  effective
          during the term of the lease" This section codified long-standing 
          policy of the New York City Conciliation and Appeals Board (CAB), 
          the  agency  formerly  charged  with  the  enforcing   the   Rent
          Stabilization Law.

          A general clause allowing a rent increase during the term of  the
          lease does not satisfy this requirement.  Accord:  Administrative 
          Review Docket Number ART 02715-Q, et al.

          Accordingly, since the Administrator's order computed overcharges 
          only through May 31, 1987, the expiration date  of  the  tenant's
          vacancy lease, the Administrator was correct not to have included 
          the MCI increase in the lawful rent for that period.

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

          ORDERED, that this petition be, and the same hereby  is,  granted
          in part and the Rent  Administrator's  order  be,  and  the  same
          hereby is, modified by correcting the names of the owner and  the
          prior tenant stated therein.

                                                  ELLIOT SANDER
                                                  Deputy Commissioner

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