BK 410278 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.: BK 410278 RO

                  TERESA BRUSCO-OWNER,
                                                  DRO DOCKET NO.: 45735
                                                  EXAMINING UNIT
                                                  TENANT:  PHILLIP BAKALCHUK
                                  PETITIONER
          ----------------------------------X                                   


            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                       IN PART
                                          AND
                           MODIFYING ADMINISTRATOR'S ORDER


          On November 2, 1987, the above-named owner filed a  Petition  for
          Administrative Review against an order issued  on  September  30,
          1987 by the Rent Administrator, 10 Columbus Circle, New York, New 
          York concerning the housing accommodations known as 308 West 88th 
          Street,  New  York,  New  York,  Apartment  C  wherein  the  Rent
          Administrator directed the owner to roll back  the  rent  and  to
          refund $4,884.88 in overcharges inclusive of excess security  and
          interest on the overcharges occurring on or after April 1, 1984.

          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 commenced on August 28, 1984 when the  tenant
          filed  an  objection  to  the  1984  Rent/Services  Registration,
          alleging that the rent being collected was an overcharge.

          On June 16, 1987, a copy of the objection along with a demand for 
          all leases and rental records in effect for the subject apartment 
          from its base date was sent to the owner.

          In response, the owner  submitted  copies  of  leases  in  effect
          since April 1, 1980, the base rent date.  The owner  stated  that
          major renovations had been done to the  subject  apartment  after
          May 31, 1983 and submitted a copy of its 1983 tax return as proof 
          of the renovation and its cost. The owner also  stated  that  the
          complainant had moved.

          On August 26, 1987, the Division of Housing and Community Renewal 
          (DHCR) sent the  owner  a  Request  for  Additional  Information,
          advising that the income tax return was unacceptable as proof  of
          the work done and requesting  that  the  owner  submit  cancelled
          checks and paid  bills  for  all  renovations  completed  in  the






          BK 410278 RO
          subject apartment.

          The owner failed to reply.

          In the order here under review, the Administrator established the 
          lawful rent at $463.36 in the lease commencing June 1,  1984  and
          terminating May  31,  1985  and  directed  the  owner  to  refund
          overcharges  of  $4,884.88  inclusive  of  interest  and   excess
          security.

          In its appeal, the owner contends  that  it  never  received  the
          notice sent on August 26, 1987 or it  would  have  submitted  the
          required substantiating documents.  The owner  asserts  that  the
          cost of the renovation was $13,255.00 and that the  rent  charged
          was lower than the rent that could  have  been  charged.   Adding
          one-fortieth of  the  cost  ($331.38)  to  the  rent  before  the
          renovation ($450.00)  and  the  permitted  15%  vacancy  increase
          results in  a  higher  total  rent  ($848.88)  than  was  charged
          ($795.00).  The owner submitted documentation in support  of  its
          claim consisting of:

               1)   a bill and a cancelled check for  $5000.00  for
                    scraping,  plastering  and  compounding  entire
                    apartment

               2)   a bill and cancelled check  for  $1,925.00  for
                    carpentry  work  in  loft  and  sheet   rocking
                    parts of the apartment

               3)   a bill and cancelled check  for  $1,700.00  for
                    construction of  new  floors  in  bathroom  and
                    kitchen

               4)   a bill and cancelled check  for  $1,150.00  for
                    the installation of new windows

               5)   a bill and cancelled checks in  the  amount  of
                    $1,200.00  for  the  installation  of   kitchen
                    cabinets



               6)   cancelled checks,  unaccompanied  by  bills  in
                    the amount of $570.00, $500.00 and $1,200.00
                    for electrical service, painting and plumbing,
                    respectively.

          The tenant contends that he vacated the subject apartment because 
          it was unfairly and unjustly expensive.

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

          Section 20C(1)  of  the  former  Code  and  2522.4(a)(1)  of  the
          current Code provides that where there  has  been  a  substantial
          increase of dwelling space, or an increase in  services,  or  the
          installation of new equipment or  improvements  in  a  stabilized
          apartment, the monthly stabilization rent for  the  unit  may  be
          increased by 1/40th the cost  of  the  improvement  provided  the






          BK 410278 RO
          tenant then in occupancy has consented thereto  in  writing.   In
          the case of vacant housing accommodations, tenant consent is  not
          required and an  increase  for  improvements  effected  during  a
          vacancy may be collected from the new tenant.

          The Commissioner notes that although  the  tenant  questions  the
          rent, he does not dispute the owner's allegations  regarding  the
          renovation work.  The  evidence  of  record  indicates  that  the
          August 26th notice was sent to the owner.   However,  it  appears
          that the original of the notice is still  in  the  file.   It  is
          possible, therefore that the notice was not received.   Moreover,
          the owner did submit some evidence, although not  acceptable  for
          purposes of granting a rent increase, that  the  work  was  done.
          Accordingly, the Commissioner accepts for  evaluation  the  bills
          and cancelled checks submitted by the owner on appeal.

          Pursuant to Sections 20C(1) and  2522.4(a)(1),  the  Commissioner
          finds that the following items for which invoices  and  cancelled
          checks have been submitted qualify for rent increases:

               1)   installation of new windows ($1,150.00) and

               2)     installation   of   new   kitchen    cabinets
                    ($1,200.00).

          Division policy consistent with  that  first  instituted  by  the
          Conciliation and Appeals Board (CAB), the agency formerly charged 
          with enforcing the New York City Rent Stabilization Law,  is  not
          to allow a 20C(1) increase for the replacement of  floors  unless
          (a) the new floor is a clear upgrading of the prior floor or  (b)
          the floor replacement is part of a "moderate  rehabilitation"  of
          the apartment, e.g. the replacing of walls  etc,  necessitated  a
          replacement of the floor.   See  CAB  Opinion  Number  21,623  as
          amended.   Therefore,  the  expenditure   for   new   floors   is
          disallowed.   It  is  the  Division's   policy   that   scraping,
          plastering, compounding and spot sheet rocking do not qualify for 
          a rent increase under the Code.  Furthermore, it  is  the  normal
          policy of the Division to disallow rent increases where, as here, 
          the exact cost of the allowable item has not been proved  because
          of a lack of itemization.  However, Sections  35  of  the  former
          Code and 2522.7 of the  current  code  require  the  Division  to
          consider all equities in determining the lawful rent.  Therefore, 
          the Commissioner rejects the $5,000.00 claim to  scrape,  plaster
          and  compound  entire  apartment  and  hereby   determines   that
          $1,283.33, or two-thirds of the $1,925.00 invoice  for  carpentry
          for loft and spot sheet rocking to be an  equitable  estimate  of
          the allowable item (building a  loft)  covered  by  that  invoice
          which was supported by a  cancelled  check.   See  Administrative
          Review Docket Numbers ARL 01682-L, BC 410344 RO and CH 510027 RO. 
          Cancelled checks  representing  claims  for  electrical  service,
          painting and plumbing are rejected for lack  of  specificity  and
          because such improvements may not qualify  for  a  rent  increase
          pursuant to the Code.

          Accordingly,  the  Commissioner  has   recalculated   the   legal
          stabilization rent for the lease period June 1, 1984 through  May
          31, 1985 to include one-fortieth  of  the  sum  of  the  approved
          improvements, $1,150.00 +  $1,200.00  +  $1,283.33  =  $3,633.33,
          divided by 40 = $90.83. as follows:






          BK 410278 RO

               Base rent $445.54 increased by Guideline 15:  4%  for  a
               one year lease = $17.82 plus $90.83, = $554.19.

          The overcharges are recalculated as follows:

               Rent collected $825.00 minus lawful  stabilization  rent
               $554.19 = $270.81 overcharge per month X 12 months  plus
               interest = $3,387.18  plus  $270.81  excess  security  =
               $3,657.99 total overcharges.

          The Commissioner notes that the complaining  tenant  has  vacated
          and that in its most recent registration, the  subject  apartment
          was listed as exempt because it is being occupied by a member  of
          the owner's family.  Nevertheless, a copy of this order is  being
          sent to the current tenant.

          This order may, upon the expiration of the period  in  which  the
          owner may institute a proceedi g  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.


          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  is  modified  in
          accordance with this Order and Opinion.




          ISSUED:
                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
                                          
    

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