BH 410300 RT; BH 410140 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




          ----------------------------------X
          IN THE MATTER OF THE ADMINISTRATIVE
          APPEAL OF                                ADMINISTRATIVE REVIEW
                                                  DOCKET NOS.:  BH-410300-RT
                                                                BH-410140-RO
                  ELYSE RABINOWITZ-TENANT
                           AND
                   MICHAEL LINDER-OWNER,          DRO DOCKET NOS.:  TC-70794-G
                                                  
                                 PETITIONER
          ----------------------------------X


                          ORDER AND OPINION DENYING OWNER'S
                                        AND
                    GRANTING TENANT'S PETITION FOR ADMINISTRATIVE REVIEW


          The above-named petitioner-owner and petitioner-tenant filed  
          Petitions for Administrative Review against an order issued on     
          July 27, 1987 concerning the housing accommodations known as 
          Apartment 4-R at 313 West 78th Street, New York, New York wherein 
          the Rent Administrator determined that the owner had overcharged 
          the tenant in the amount of $9,871.59, including excess security 
          and interest since April 1, 1984.

          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 
          provision 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 applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law and Section 2526.1(a) of the current Rent 
          Stabilization Code.


          The Commissioner has reviewed all of the evidence in the record and 
          has carefully considered that portion of the record relevant to the 












          BH 410300 RT; BH 410140 RO

          issue raised by the administrative appeals.

          This proceeding was originally commenced by the filing on March 4, 
          1983 of a rent overcharge complaint by the tenant with the NYC 
          Conciliation and Appeals Board, one of the predecessor agencies to 
          the DHCR.  In her complaint the tenant stated that she had 
          commenced occupancy in December, 1982 at a rent of $450.00 per 
          month.

          In its answer the owner submitted a complete rental history for the 
          apartment since the date of decontrol on April 25, 1972.  The owner 
          also enclosed numerous bills and statements to document the cost of 
          work performed in the subject apartment in 1981 and 1982 including 
          bathroom walls, repair of fireplace walls, the replacement of a 
          bathroom door and the resurfacing of the terrace.

          In Order No. 40,033 issued on July 27, 1987, the District Rent 
          Administrator determined that the tenant had been overcharged in 
          the amount of $9,871.59 including excess security and interest 
          since April 1, 1984, and directed the owner to refund such 
          overcharge to the tenant as well as to reduce the rent.  Affixed to 
          the order was a rent computation chart which detailed the amount 
          and reason for the overcharges.  Overcharges were initially 
          determined for the prior tenant's lease term for the period from 
          June 1980 through May 1981, and were computed in all subsequent 
          lease terms thereafter.  The Administrator further determined to 
          deny the owner's claim for the cost of the above-cited 
          installations since they constituted no more than normal 
          maintenance and repair of the premises and did not qualify under 
          Section 20(C)(1) of the former Code.

          In her petition dated August 19, 1987, the tenant contends that the 
          Administrator failed to apply treble damages, which are required 
          under the law unless the owner proves that the overcharge was not 
          willful.  Since the owner never even alleged that overcharge was 
          not willful, treble damages should have been imposed.  The tenant 
          also contends that the owner's attempt to represent repairs as 
          improvements is actually an attempt to justify the overcharges.

          In his petition dated August 26, 1987, the owner contends that the 
          Administrator erred in calculating the legal stabilized rent, 
          although the petition did not specify any particular computational 
          error in the chart.  The owner also states that the Administrator 
          wrongfully denied an increase for the installment of new equipment 
          based on the determination that the items in question constituted 
          normal maintenance or repair.   Finally, the owner claims that the 
          tenant's overcharge complaint was "untimely" as it was filed in 
          excess of the statutory period within which the complaint must be 
          filed and also because the tenant had made no timely objection to 
          the owner's duly filed annual Registration Statements.

          The owner submitted an answer to the tenant's petition on January 






          BH 410300 RT; BH 410140 RO

          8, 1988.  The owner contends therein that the determination not to 
          impose treble damages was correct because there was no such penalty 
          in existence at the time the tenant filed the complaint with the 
          Conciliation and Appeals Board.  Furthermore, even if there was 
          such penalty, it could not be applied in this case because the 
          owner was never given notice of it, or of the opportunity to 
          prevent it by refuting the presumption of willfulness.  

          The tenant submitted a reply to the owner's answer on January 30, 
          1992 wherein the tenant reiterated that treble damages should be 
          imposed based on the owner's attempt to represent repairs as 
          improvements to justify the overcharge.

          The tenant submitted an answer to the owner's petition on September 
          25, 1988.  The tenant therein asserts that her complaint was 
          timely, filed and that it was unnecessary for her to challenge the 
          registration statements as her complaint was on record before 
          Registration Statements were ever issued.

          In a supplemental answer dated January 2, 1989 the tenant referred 
          to a case in the Supreme Court, King County, Simon v. DHCR, in 
          which the tenant states the DHCR's application of treble damages 
          was sustained.

          The owner's reply submitted March 27, 1989 is almost exclusively 
          devoted to a discussion of that case, which according to the owner, 
          is wholly distinguishable from the instant proceeding.  The owner's 
          main point is that the nature of the determined overcharges in its 
          own case precludes the imposition of treble damages as a matter of 
          DHCR policy.

          The owner cites Sections from the Court's decision wherein it is 
          recognized that the DHCR does not normally impose treble damages 
          when the overcharges are based solely on the failure to establish 
          the value of 20(C)(1) (currently Section 2522.4(a)(1)) increases.  
          The owner contends that the present situation falls clearly within 
          that policy and that the action of the owner that the Simon Court 
          cited as warranting the treble damages penalty-the failure to 
          submit records, the inadequacy of the documentation that was 
          submitted, and the failure to prove that the work was actually 
          performed - are all absent from the instant case.  The owner also 
          disputes the failure to grant a rent increase for the work 
          performed in the apartment, especially the resurfacing of the 
          terrace and the replacement of the bathroom door, since, the owner 
          asserts, these were actual improvements and not merely maintenance 
          and repair.
          The Commissioner is of the opinion that the owner's petition should 
          be denied, and that the tenant's petition should be granted.

          Sections 20C(1) of the former Code and 2522.4(a)(1) of the current 
          Code provide that where there had been an installation of new 
          equipment in a stabilized apartment, the monthly stabilization rent 












          BH 410300 RT; BH 410140 RO

          for said unit may be increased by 1/40th the cost of such equipment 
          provided the tenant then in occupancy has consented thereto in 
          writing.  In addition, the courts have ruled that an increase for 
          new equipment installed during a vacancy prior to the commencement 
          of a new tenancy or upon the commencement of a new tenancy and 
          reflected in the lease rent, may be collected without the new 
          tenant's consent to pay such increase.  (Matter of LeHavre Corp. v. 
          Gribetz, et. al., N.Y.L.J., January 20, 1971, p. 19, col. 8 (Sup. 
          Ct., Queens Co., Crisona, J.); Matter of Morton I. Hamberg v. CAB, 
          N.Y.L.J., November 9, 1972, p. 18, col. 8, (Sup. Ct., N.Y.Co., 
          Sarafite, J.).

          Regarding, the owner's contention that the work performed in the 
          apartment amount to improvements to the premises for which a rent 
          increase should be granted, the Commissioner finds that, of the 
          work performed, only replacement of the bathroom door constitutes 
          an improvement within the meaning of Section 20C(1) of the Rent 
          Stabilization Code.  All other work was in the nature of normal 
          maintenance or repair.  However, it is noted as well that, although 
          not expressly stated in the order, all the work, including the 
          replacement of the bathroom door, was completed within the tenancy 
          of the former tenant.  Written consent by that tenant was required 
          for a rent increase.  The proposed increase does not meet this 
          requirement.  Although the work was completed by March, 1982, the 
          owner did not obtain the written consent of the tenant then in 
          occupancy. Instead, the owner chose to include the increase in the 
          complainant's vacancy lease commencing in December, 1982, as if the 
          work had been performed during the vacancy period, when the new 
          tenant's consent is not required.  Under these facts, no Section 
          20C(1) increase is warranted.

          Section 26-516 of the Rent Stabilization Law provides that any 
          owner who is found by the DHCR to have collected an overcharge 
          shall be liable to the tenant for treble damages unless the owner 
          establishes by a preponderance of the evidence that the overcharge 
          was not willful, in which case interest shall be imposed.  Section 
          26-516 also provides that treble damages shall be applied only to 
          overcharges occurring on or after April 1, 1984.






          Regarding the tenant's assertion that the owner's representation of 
          the repairs as improvements was merely an attempt to justify the 
          overcharge, the Commissioner finds that this case is clearly 
          distinct from those cases where the Commissioner has found a lack 
          of willfulness where overcharges were due solely to unsubstantiated 
          20(C)(1) rent increases.  In the instant case, most of the work was 
          clearly repairs, the work was performed during the prior tenant's 
          occupancy of the apartment and the increase attributable to the 






          BH 410300 RT; BH 410140 RO

          work performed constituted only a third of the total overcharge to 
          the complainant.  Accordingly, the Administrator's failure to 
          impose treble damages, as required under the above provision of the 
          law, was incorrect.  The Commissioner hereby modifies the 
          Administrator's order to include treble damages for overcharges 
          collected on or after April 1, 1984, and the removal of interest 
          for that period, as follows:

               Pre - April 1, 1984 overcharges:  $2,570.56
               (unchanged)

               Overcharges April 1, 1984 to July 31, 1987 - 
                                                  $6,637.40 x 3 
               (trebled)                       +  $171.10                   
                                        (excess security) =                  
                                                                            
                                                  $20,083.30
               -------------------------------------------------------
               TOTAL OVERCHARGES                   =         $22,653.86

          This order may, upon the expiration of the period in which the 
          owner may institute a proceeding pursuant to Article Seventy-Eight 
          of the Civil Practice Law and Rules, be filed and enforced by the 
          tenant in the same manner as a judgment or not in excess of twenty 
          percent thereof per month may be offset against any rent thereafter 
          due the owner.

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

          ORDERED, that the owner's petition be, and the same hereby is, 
          denied; that the tenant's petition be, and the same hereby is, 
          granted; and that the Administrator's order be, and the same hereby 
          is, modified in accordance with this Order and Opinion.


          ISSUED:

                                                  ------------------------
                                                  JOSEPH A. D'AGOSTA
                                                  Acting Deputy Commissioner
           
             






    

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