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

      ------------------------------------X 
      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    : 
      ------------------------------------X                             


           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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