STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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
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
1) $500.00 that was paid to an administrative employee of
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
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
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,
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
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.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner