CD410097RO
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. CD410097RO
: DISTRICT RENT OFFICE
Vickers Management Corp., DOCKET NO. U3124342R,
CDR 33,000
TENANT: Maureen Havican &
Jill Schwadron
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On April 27, 1988 the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on March 23, 1988 by the
Rent Administrator, 10 Columbus Circle, New York, New York, concerning
the housing accommodations known as 1379 Lexington Avenue, New York,
New York, Apartment No. 2C wherein the Rent Administrator determined
that the owner had overcharged the tenants.
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.
This proceeding was originally commenced by the filing of a rent
overcharge complaint by the tenants in March, 1984, in which they stated
that they had commenced occupancy on November 1, 1981 at a rent of
$595.00 per month.
The owner was served with a copy of the tenants' complaint, and
submitted leases from the base date. The owner claimed that furniture
was installed for tenants in occupancy from November 1, 1979 to
September 20, 1980; that the owner occupied the subject apartment from
September 20, 1980 to November 6, 1981; and that the owner occupancy
allowed the next tenants, the complainants, to be charged a "first
rent."
On March 23, 1988 the Administrator, deeming a three-year vacancy lease
for the period of owner occupancy, issued an order finding an overcharge
of $13,978.06 through August 31, 1985 when the tenants vacated.
In this petition, the owner contends in substance that a new
refrigerator was installed at the time of a 1977 renewal lease; that
CD410097RO
furniture costing in excess of $3,500.00 was installed in 1979; that new
kitchen cabinets, new stove, and new kitchen sink costing $3,000.00 were
installed in 1981 prior to the complainants commencing occupancy; that
the refrigerator was retained because it was only two years old; that,
even though owner occupancy did not result in entitlement to a free
market "first rent," the improvements and furniture mean that the owner
was entitled to charge the complainants $554.44 in their first lease,
rather than $312.46 as calculated by the Administrator; and that, while
the owner is unable to provide documentation of expenditures for
improvements, it has previously furnished leases indicating a furnished
apartment.
In answer, the tenants assert in substance that the refrigerator in the
apartment when they signed their lease in 1981 was much older than four
years old; that the owner claims both that the refrigerator was new in
1977 and that it was two years old in 1981; that there were no new
kitchen cabinets, stove or sink installed just prior to their occupancy;
that the owner has reached a settlement with the current tenants of the
subject apartment, refunding $7,500.00 and rolling the rent back to
$456.90; and that this constitutes an admission that the complainants
were being overcharged.
The tenants subsequently submitted an application made by the owner to
the DHCR in September, 1988 to increase the rent of the current tenant
based upon the installation of a new range, new refrigerator, and new
kitchen sink and cabinet at a total cost of $850.00, on the grounds that
the old ones were "beyond repair."
The Commissioner is of the opinion that this petition should be denied.
Section 2522.4(a)(1) of the Rent Stabilization Code provides for a rent
increase for, among other things, new furniture or furnishings. On
October 27, 1978 a lease for the subject apartment was made by a
landlord and two tenants. (One of the tenants had the same last name as
the owner; it is not apparent whether or not they were related.)
Article 29 of the lease provided as follows:
29. Apartment is leased as a furnished apartment, containing
wall-to-wall bookcases along width of living-room, Rust color
sofa, coffee table (malachite color), music cabinet containing
television set, radio & record player, cardboard container
with drawers, one bed, one dresser, 1 pair of side brackets,
together with such other furnishings which may be given, for
which the tenant agrees, when so provided, to give landlord a
receipt for same.
The owner has not submitted any evidence of spending $3,500.00 to
purchase these items new in 1978. Further, the complainants' leases do
not mention that the apartment is furnished, and the apartment services
registration does not mention furniture as being included. No increase
is allowed for furniture.
Nor is any increase allowed for the $3,000.00 supposedly spent on a new
stove, refrigerator and kitchen cabinets in late 1981. The owner has
submitted no evidence of such new equipment, and the tenants have denied
that any was installed. It is interesting in this respect to note the
CD410097RO
owner's 1988 application for an increase for new range, refrigerator,
kitchen sink and cabinet. Section 2522.4(a)(11) of the Code provides
that no rent increase will be allowed for the installation of new
equipment during the useful life of equipment for which a rent increase
was previously charged. DHCR Operational Bulletin 90-2, which provides
a useful life schedule for major capital improvements, gives a useful
life of 15 years for refrigerators, and 20 years for ranges, sinks,
cabinets and vanities. In 1988 the refrigerator was allegedly either 9
or 11 years old, and the range, sink and cabinet were allegedly 7 years
old, yet the owner's application was contending that they were all
beyond repair. This gives support to the tenants' claim that those
items were already old in 1981.
The Commissioner has determined in this Order and Opinion that the owner
collected overcharges of $13,978.06. This Order may, upon expiration of
the period for seeking review of this Order and Opinion pursuant to
Article Seventy-eight of the Civil Practice Law and Rules, be filed and
enforced as a judgment. Where the tenant files this Order as a
judgment, the County Clerk may add to the overcharge interest at the
rate payable on a judgment pursuant to Section 5004 of the Civil
Practice Law and Rules from the issuance date of the Rent
Administrator's Order to the issuance date of the Commissioner's Order.
A copy of this order is being sent to the current occupant of the
subject apartment.
The owner is directed to reflect the findings and determinations made in
the Administrator's order on all future registration statements,
including those for the current year if not already filed, citing the
Administrator's order as the basis for the change. Registration
statements already on file, however, should not be amended to reflect
the findings and determinations made in the Administrator's order. The
owner is further directed to adjust subsequent rents to an amount no
greater than that determined by the Administrator's order plus any
lawful increases.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this Petition be, and the same hereby is, denied and that
the Rent Administrator's order be, and the same hereby is, affirmed.
The total overcharge is $13,978.06.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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