BJ 410068-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. BJ 410068-RO

                                              :  DISTRICT RENT OFFICE
               225 East 25th Street Corp.,       DOCKET NO. L 3111102-R
                                                 
                                                 TENANT:    Jimmy    Carter
                        
                                PETITIONER    : 
          ------------------------------------X 

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW 
                                       IN PART


          On October 8, 1987,  the  above-named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          September 3,  1987,  by  a  Rent  Administrator,  concerning  the
          housing accommodations known as 225 East 25th Street,  New  York,
          New York,  Apartment  No.  2A,  wherein  the  Rent  Administrator
          determined that the owner had overcharged the tenant.

          The Administrative Appeal is being  determined  pursuant  to  the
          provisions of Section 2526.1 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.  

          The tenant originally  commenced  this  proceeding  by  filing  a
          complaint of rent overcharge.  The owner was served with  a  copy
          of the complaint and was directed to  submit  a  complete  rental
          history.  The owner  was  advised  that  if  it  claimed  a  rent
          increase for the installation of new equipment, it  was  required
          to submit invoice(s) showing the cost and date  of  installation.
          The owner submitted proof of new equipment installed  during  the
          vacancy period prior to the occupancy of the complaining tenant.

          In his/her order, the Rent Administrator  established  the  legal
          regulated rent; granted a rent increase for new equipment in  the
          amount of $73.30 per month, but disallowed  several  claims,  and
          determined a rent overcharge.

          In its petition, the owner claims  in  substance  that  the  Rent
          Administrator should have granted a rent increase for the  entire
          claim, and  specifically  objects  to  the  disallowance  of  the
          following:

               1)   $500.00 that was paid to an administrative employee  of






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          the owner for interior design, because the employee  is
                    also  a  professional   interior   designer   and   had
                    "contracted independently" with  the  owner  for  those
                    services;  since  this  is  not  part  of  her  regular
                    employment duties, it should be allowed;

               2)   $350.00 to the same employee as reimbursement for  that
                    amount paid by the employee to a  "general  contractor"
                    in the course of her independent work for the owner  as
                    an interior designer, since this is also outside of her 
                    regular duties;

               3)   $540.05 that was paid to  the  building  superintendent
                    for h s  work  on  the  renovations  of  the   subject-
                    apartment that was outside his  "ordinary"  employment,
                    but that, if the disallowance  remains,  it  should  be
                    reduced to $365.00, which was the amount actually  paid
                    him; and

               4)   $241.69, which  was  disallowed  because  the  invoices
                    indicated that they were  paid  after  the  complainant
                    moved into the premises; however, since  the  materials
                    were actually ordered while the apartment  was  vacant,
                    it should be allowed.

          In response to the petition, the tenant  challenges  the  $500.00
          and $350.00 fees to the owner's employee, stating that this  work
          was not distinguishable from her other duties.  The  tenant  then
          disputes the  actual  extent  of  renovations  performed  in  the
          apartment and asserts that  the  apartment  showed  no  signs  of
          professional design consultation.

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

          The Administrator correctly determined  to  disallow  the  "fees"
          paid to  the  owner's  employee  as  interior  decorator  and  as
          reimbursement for an amount paid to a general  contractor,  since
          the owner fails to establish that these expenses were in  payment
          for "new equipment or  improvements"  that  qualify  for  a  rent
          increase under Section 2522.4(a) of the RSC.  The $350.00 claimed 
          as reimbursement to the  owner's  employee  for  payment  to  the
          general contractor is totally unsubstantiated  because,  firstly,
          there is no copy of a check from  the  employee  documenting  the
          employee's personal expense  and,  secondly,  because  the  owner
          fails to document what equipment or improvement was paid  for  by
          these funds.  Furthermore, if the $350.00 is part of the  general
          contractor's total fee of $2,315.00,  this  expense  was  already
          counted in the Administrator's total allowance of $4,563.60.   As
          for the employee's $500.00  "fee"  as  a  "professional  interior
          designer," the owner  fails  to  establish  that  the  employee's
          service in this capacity has added to the valure of the apartment 
          in any way.  Regarding the payments  to  the  superintendent  the
          owner has  failed  to  establish  that  the  work  performed  was
          outside  the  scope  of  the  superintendent's   normal   duties.
          However,  the  owner  is  correct  that  the  payments   to   the
          superintendent total only $365.00 and not the $540.05  disallowed
          by the Administrator.  Finally, the Commissioner finds  that  the
          amount of $241.69 was improperly disallowed by the Administrator, 






          BJ 410068-RO
          since the materials were ordered prior to the tenant's  occupancy
          while the apartment  was  vacant.   With  the  exception  of  the
          checks  to  the  managing  agent  and  the  superintendent,   the
          documentation submitted is sufficient proof of the  cost  of  the
          new equipment and renovations.

          As a result, an additional $10.42  per  month  is  added  to  the
          tenant's lawful initial rent (1/40 of $175.05 + 1/40 of $241.69 = 
          $10.42) for a total of $335.44.  A  recomputation  of  the  lease
          history results in a reduction of total overcharges to $3,660.75, 
          from $4386.79, as  documented  in  the  rent  calculations  chart
          attached hereto and made a part hereof.

          This order may, upon the expiration of the period  in  which  the
          owner may institute a proceeding pursuant to Article  78  of  the
          Civil Practice Law and Rules, be filed and enforced in  the  same
          manner as a judgment or not  in  excess  of  twenty  percent  per
          month thereof may be offset against any rent thereafter  due  the
          owner.


          If the owner has already complied with the  Rent  Administrator's
          order and there are arrears due to the owner as a result  of  the
          instant determination, the tenant shall be permitted to  pay  off
          the arrears in twelve (12) equal  monthly  installments.   Should
          the tenant vacate after  the  issuance  of  this  order  or  have
          already vacated, said arrears shall be payable immediately.


          THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

          ORDERED, that this Petition be, and the same hereby  is,  granted
          in part; 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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