DOC. NO.: BJ 410122-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 :   ADMINISTRATIVE REVIEW
          APPEAL OF                               DOC. NO.: BJ 410122-RO
                                                  D.R.O. DOC.: 47021
              THE GREENWICH CO., A LIMITED    :
              PARTNERSHIP, c/o ENGELMAN & CO.                               
                              PETITIONER      :
          ------------------------------------X

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

          On October 13, 1987, the above-named petitioner-owner filed a 
          Petition for Administrative Review of an order issued on September 
          16, 1987, by the Rent Administrator, 10 Columbus Circle, New York, 
          N.Y. concerning housing accommodations known as Apartment 2N at 50 
          East 8th Street, New York, New York wherein the Rent Administrator 
          determined that the tenant had been overcharged.

          The issue in this appeal is whether the 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 
          issues raised by the administrative appeal.

          This proceeding was originally commenced by the filing of a 
          Tenant's Objection to Rent/Services Registration on August 29, 
          1984.  The tenants took occupancy pursuant to a lease commencing 
          November 1, 1981 and expiring on October 31, 1984 at a monthly rent 
          of $479.02.  By their filing, the tenants claimed, among other 
          things, that the rent being paid was an overcharge and that air 
          conditioner electricity was included in the rent at a monthly 
          charge of $15.00.

          The owner was served with a copy of the complaint, and was afforded 
          an opportunity to answer and to submit rent records to prove the 
          lawfulness of the rent being charged.  In answer to the
          complaint, the owner supplied the lease in effect on April 1, 1980, 
          the base rent date, and all leases subsequent thereto.  The
          owner also submitted a photocopy of the paid bills for a stove and 
          refrigerator.  The owner confirmed that the tenant was charged 
          $15.00 per month for the tenant-installed air conditioner unit.

















          DOC. NO. BJ 410122-RO



          By order dated September 16, 1987, under Docket No. 47021, the 
          District Rent Administrator determined, among other things, that 
          the owner had overcharged the tenant in the amount of $1459.54, 
          including a penalty of treble damages on overcharges collected from 
          April 1, 1984 to March 31, 1986, based on the owner's failure to 
          establish lack of willfulness.  The Administrator further 
          determined that the air conditioner charge for 1981 was $13.27, and 
          is part of the base rent, subject to annual guidelines increases 
          and that the charge is to be dropped from the base rent upon 
          removal of the air conditioner.

          In this petition, the owner, by its agent contends that the 
          District Rent Administrator's order should be modified to reflect 
          that the equipment cost was $652.75, not $625.69, as found by the 
          Administrator; that to the best of his recollection, the owner 
          called DHCR for guidelines regarding the air conditioner charge, 
          and was told that $15.00 per month was the correct figure; that the 
          difference of $1.73 between the lawful air conditioner charge and 
          the amount charged by the owner indicates that this was not a 
          willful overcharge; and that the overcharge for the apartment was 
          not willful, but the result of errors in computation.  With the 
          petition the owner's agent and his secretary submitted affidavits 
          that the error was inadvertent clerical error. 

          In response to the owner's petition, the tenants contend, among 
          other things, that the surcharge for the appliances should not have 
          included the sales tax; that they never requested a larger 
          refrigerator; that the overcharge was willful; that the air 
          conditioner surcharge originally offered, and upon which 
          representation they relied, was $5.00, and that the owner was 
          estopped from charging more than that sum; that the 1984 renewal 
          offer accepted by the tenants should have been treated as a binding 
          contract, and the rent increase based on it; and that interest 
          should be assessed on all overcharges preceding April 1, 1984, and 
          from September 16, 1987 to the date the owner actually refunds all 
          overcharges.

          The Commissioner is of the opinion that this petition should be 
          denied.

          Section 2526.1 of the Rent Stabilization Code provides, in 
          pertinent part:  "A penalty of three times the overcharge may not 
          be based upon an overcharge having occurred more than two years 
          before the complaint is filed, or upon an overcharge which occurred 
          prior to April 1, 1984....



          With regard to the owner's assertion that the monthly appliance 
          increase should have been based on $652.75, the Commissioner finds 






          DOC. NO. BJ 410122-RO

          that the owner is correct and that the Administrator selected an 
          incorrect figure from the invoice.  However, a review of the record 
          indicates that the Administrator failed to correctly apply the 
          statutory penalty of treble damages by limiting treble damages to 
          two years following April 1, 1984.  Application of the correct 
          processing procedures, recomputing all overcharges and penalties, 
          would more than negate any benefit to the owner based on the 
          argument raised by the owner in its petition.  As such, and in the 
          absence of a timely petition for administrative review by the 
          tenants, the Commissioner finds it appropriate to deny this portion 
          of the owner's appeal.

          Concerning the owner's allegation that it charged the $15.00/month 
          air conditioner surcharge based on a telephone conversation with a 
          Division employee, the Commissioner finds that this unsupported 
          allegation lacks probative value, and is without merit on the issue 
          of establishing the owner's lack of willfulness.  Equally lacking 
          conclusory weight are the owner's statements that the overcharge 
          was not willful, and the affidavits to that effect by the owner and 
          its employee, submitted for the first time on appeal.  The self- 
          servicing nature of these documents renders them valueless as 
          evidence that the overcharge was not willful.  Further, the 
          allegation of the owner that the error was inadvertent clerical 
          error, inadequate to overcome the presumption of willfulness.  The 
          owner failed to establish a lack of willfulness; therefore, the 
          Commissioner finds that the imposition of treble damages was 
          warranted.

          Regarding the allegations of the tenants in their answer, the 
          Commissioner finds that the appropriate vehicle for these arguments 
          would have been the filing by the tenants of their own petition for 
          administrative review; they may not be raised in answer to the 
          owner's petition for administrative review.  However, it is noted 
          that the allowable increase for improvements pursuant to Section 
          2522.4 of the Rent Stabilization Code is 1/40 of the total cost, 
          including sales tax; and that the penalty of interest, pursuant to 
          Section 2526.1 of the Rent Stabilization Code, is established from 
          the date of the first overcharge on or after April 1, 1984.  

          This order may, upon the expiration of the period for seeking 
          review pursuant to Article Seventy-Eight of the Civil Practice
          Law and Rules, be docketed and enforced in the manner of a judgment 
          of the Supreme Court.  The total overcharge is $1459.54.





          Because this determination concerns lawful rents only through 
          September 30, 1987, the owner is cautioned to adjust subsequent 
          rents to an amount no greater than that determined by this order 
          plus any lawful increases, and to register any adjusted rents with 












          DOC. NO. BJ 410122-RO

          this order and opinion being given as the explanation for the 
          adjustment.  A copy of this order and opinion is being sent to the 
          current occupant of the subject apartment.


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

          ORDERED, that this petition be and the same hereby is, denied, and 
          the District Rent Administrator's order be and the same hereby is 
          affirmed.

          ISSUED:

                                                                          
                                             JOSEPH A. D'AGOSTA
                                             Deputy Commissioner

    

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