DE410240RO
                             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. DE410240RO

                                          :  DISTRICT RENT OFFICE
           Beerma Realty,                    DOCKET NO. ZCG410235R
                                            
                                             TENANT: Caryn Montak             
             
                            PETITIONER    : 
      ------------------------------------X                             


          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                     IN PART


      On May 18, 1989, the above-named owner filed a Petition for 
      Administrative Review against an order issued on April 28, 1989, by a 
      Rent Administrator, concerning the housing accommodations known as      
      325 West 77th Street, New York, Apartment No. 5C, wherein the Rent 
      Administrator determined that the owner had overcharged the tenant.

      This proceeding was originally commenced by the filing of a rent 
      overcharge complaint by the tenant in July of 1988.  The owner was 
      served with a copy of the tenant's complaint and submitted a complete 
      rental history as required.  The owner stated in substance that 
      extensive renovations prior to the tenant's occupancy in October, 1986, 
      justified an increase pursuant to Section 2522.4 of the Rent 
      Stabilization Code.  The owner submitted bills and cancelled checks 
      totaling $16,232.23.  Approximately $13,000 in cancelled checks, 
      however, were corroborated only by a handwritten receipt for 
      "renovations" to the subject apartment.  The remainder was substantiated 
      by itemized bills for the purchase of: a refrigerator; windows; and 18 
      items from "Square Deal Plumbing Sales."

      The Rent Administrator directed the owner to submit the contractor's 
      itemization for the renovations totaling $13,000.  The owner submitted 
      in response a typed breakdown of work done in the apartment, without 
      documentation from the contractor.  

      In Order Number ZCG410235R, the Rent Administrator established the 
      lawful stabilized rent as $606.96 effective October 15, 1986, determined 
      that the tenant had been overcharged and directed a refund to the tenant 
      of $28,331.00, including treble damages on overcharges collected on and 
      after April 1, 1984.  The Administrator excluded the aforementioned 
      $13,000 ("the $13,000" herein) in calculating the increase for new 
      equipment or improvements, because the owner had not itemized or 
      properly documented the expenditure.  The order grants only a vacancy 
      improvement increase of $80.81, based on expenditures totalling 
      $3,232.23.







          DE410240RO


      In this petition, the owner contends in substance: that the Rent 
      Administrator arbitrarily excluded the $13,000 when applying  Section 
      2522.4(a)(1) of the Code; that the Administrator had erroneously failed 
      to consider the owner's submission dated April 20, 1989, and received by 
      the DHCR on April 27, 1989 in timely rebuttal to the treble-damage 
      notice dated April 10, 1989; that the failure to consider that 
      submission before issuing the subject order constituted a denial of due 
      process of law; that the tenant did not contest the renovations and the 
      owner substantiated the costs thereof, so that itemization was not 
      required; and that at any rate treble damages are not warranted because 
      the Commissioner has held that they are not to be imposed where the 
      overcharge is the result of disallowing unsubstantiated expenditures for 
      improvements.  

      In answer to the owner's petition, the tenant states in substance: that 
      the order correctly excludes the $13,000 because there is no evidence 
      that such renovations were in fact made; that the tenant did dispute the 
      renovations; that no new floors were installed, contrary to the owner's 
      breakdown of the renovations; that the only bathroom "renovation" was a 
      resurfacing of the existing tub and a new "vanity"; that the kitchen 
      renovations consisted of a new sink, appliances and cabinets for which 
      the Rent Administrator did grant an increase (based on the $3,232.23 
      that was properly documented); and that some of the owner's cancelled 
      checks are dated after the tenant's occupancy in October, 1986.

      During the processing of this appeal, the owner has been served with 
      copies of the tenant's responses to the PAR, as well as with the 
      tenant's submission, disputing the renovations, which had been submitted 
      below but not previously served on the owner.

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

      Section 2522.4 of the Rent Stabilization Code provides in pertinent part 
      that an owner is entitled to a rental increase where there has been an 
      installation of new equipment or improvements in an apartment during the 
      vacancy between tenancies.  Such increase in the monthly stabilization 
      rent shall be equal to 1/40 of the total cost, including installation, 
      but excluding finance charges.

      No appeal has been taken of the Administrator's determination to 
      recognize the owner's aforementioned itemized purchases.  The issue 
      herein concerns the remaining $13,000.  Because it was corroborated only 
      by a summary bill for "renovation" and by the owner's checks to the 
      order of the party mentioned on that bill, the Administrator was 
      correct, in such absence of documentation as to what that renovation 
      consisted of, in refusing to allow 1/40 of the $13,000 to be added to 
      the lawful rent herein as an improvement-based increase.

      On the other hand, however, (1) the checks in question were all drawn in 
      the latter half of 1986, and the tenant took occupancy in October of 
      that year, (2) the tenant concedes that windows were installed and (in 
      her answer to the PAR) that the bathroom was "refurbished" and (3) 
      someone has to have done that installation and refurbishing, as well as 
      providing the labor connected with the aforementioned 18 items that the 
      Administrator found were purchased for the subject apartment.  The 
      Commissioner will therefore find that some additional amount (although 


          DE410240RO

      a specific amount of $13,000 was not proven by the owner) was spent for 
      allowable vacancy improvements.  Although the aforementioned lack of 
      itemized documentation precludes permitting the rental increase taken by 
      the owner therefor, the owner has shown nonwillfulness as to the 
      resulting overcharge, and the treble-damage penalty pertaining to it 
      must therefore be removed.


      In this case the entire overcharge found by the Administrator is 
      attributable to the excessive vacancy improvement increase discussed 
      above.  The total will therefore be divided by three, with interest 
      assessed on each month's overcharge and excessive security deposited 
      added to that total, to arrive at the amount now due the tenant.


      Other contentions of the owner do not require extended discussion; thus 
      the Commissioner has considered all the owner's submissions, eliminating 
      any due-process problem associated with the Administrator's inadvertent 
      failure to do so; and contrary to petitioner's contention, the tenant 
      does contest the greater part of the claimed renovations, so that the 
      requirement of itemization cannot be excused in calculating the vacancy- 
      improvement increase herein.


      The owner is directed to reflect the findings and determinations made in 
      this order on all future registration statements, including those for 
      the current year if not already filed, citing this 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 
      this order.  The owner is further directed to adjust subsequent rents to 
      an amount no greater than that determined by this order plus any lawful 
      increases.  


      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 owner.


      If the owner has already complied with the Rent Administrator's order 
      and there are arrears due to the owner as a result of this 
      determination, the tenant may pay them off in 24 equal monthly 
      installments.  Should the tenant vacate have already vacated, said 
      arrears shall be payable immediately. 


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



      ORDERED, that this petition be and the same hereby is, granted to the 
      extent set forth above, the Rent Administrator's order being modified 
      consistently therewith.  The total overcharge and lawful rent, as of 
      April 30, 1989, were $11,112.44 and $661.59, respectively.









          DE410240RO

      ISSUED:


                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner
    

TenantNet Home | TenantNet Forum | New York Tenant Information
DHCR Information | DHCR Decisions | Housing Court Decisions | New York Rent Laws
Disclaimer | Privacy Policy | Contact Us

Subscribe to our Mailing List!
Your Email      Full Name