DH 410369-RO

                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                               DOCKET NO.:   
                                                  DH 410369-RO
                   KREISEL  COMPANY                  RENT   ADMINISTRATOR'S
                                                  DOCKET NO.:
                                                  BC 410482-R
                                  PETITIONER      TENANT: ZOLTAN MASON

                                       IN PART

          On August 15, 1989, the above-named petitioner filed  a  Petition
          for Administrative Review against an order  issued  on  July  24,
          1989 by a Rent Administrator concerning  housing  accommodations,
          known as Apartment 6-C at 225 East 63rd Street, New York, 
          New York, wherein the Rent Administrator determined that the 
          tenant had been overcharged in the amount of $4,323.69, including 
          treble damages.

          The issue in this appeal is whether the  District  Rent  Adminis-
          trator's order was warranted.

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law and Sections 2526.1(a) of the current Rent Sta 
          bilization Code.

          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 tenant on March 27, 1987.

          The tenant took occupancy pursuant to a one year lease commencing 
          October 1, 1986, and expiring September 30, 1987,  at  a  monthly
          rent of $1,500.00.

          The owner was served with a copy of the  complaint  and  was  di-
          rected to submit a complete rent  history  from  the  base  date,
          including copies of all leases.  

          The owner submitted the  requested  lease  history,  as  well  as
          documentation to verify the installation of improvements  to  the
          subject apartment costing $22,891.68  immediately  prior  to  the
          complainant's occupancy.

          DH 410369-RO

          On May 3, 1989, the owner was sent a Final Notice  informing  him
          of the possible imposition  of  treble  damages  for  overcharges
          unless he submitted evidence to rebut a finding  that  the  over-
          charge was willful.

          In response, the owner submitted an  itemized  breakdown  of  the
          total cost of the aforementioned improvements.   The  owner  also
          objected to the omission of an MCI increase (DHCR Order  No.  ZLS
          000813-OM issued on July 31, 1987) from the prelimina y  calcula-
          tions of overcharges listed on the notice.

          In Order No. BC 410482-R, issued on July 24, 1989,  the  Adminis-
          strator determined that the tenant had been  overcharged  in  the
          amount  of  $4,323.69,  including  treble  damages.   An  initial
          overcharge of $72.66 per month was found  for  the  complainant's
          vacancy lease rent of $1,500.00 per month.  A  lesser  overcharge
          of $33.11 per month was determined for the  complainant's  subse-
          quent renewal lease.

          The petitioner contends, firstly, that the Administrator  miscal-
          culated overcharges by tallying 13 months for  the  complainant's
          one-year vacancy lease; secondly, that the  Administrator  under-
          valued the base for calculating the complainant's  renewal  lease
          because he failed to consider an MCI increase, and, finally, that 
          treble damages were improper because the owner had shown that the 
          overcharges were not willful by cooperating fully with the Admin 
          istrator's repeated requests for documentation  of  the  cost  of
          improvements.  Furthermore, the owner claims  prejudicial  injury
          due to the amount of actual overcharges being greater  than  what
          was stated on the Final Notice.

          In his answer, the tenant contends that the improvements actually 
          made to  the  apartment  were  different  from  those  the  owner

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

          The owner is incorrect in his contention that  the  Administrator
          undervalued the base rent used  to  calculate  the  complainant's
          renewal lease.  Although the collectible rent  was  $1,511.34  on
          the base date of September 30, 1987, this  included  a  temporary
          MCI increase of $42.50,  which  is  not  used  in  calculating  a
          guidelines increase.  Moreover, the record fails to  support  the
          owner's  contention  that  overcharges  were  not  willful.   The
          deciding factor is not whether  the  owner  cooperated  with  the
          Administrator's request for information  but  whether  the  over-
          charges were willful at the time the  tenant  signed  the  lease.
          The fact that the owner satisfied the  requirements  for  proving
          the cost of improvements is irrelevant since  the  owner's  claim
          was accepted in its entirety and this never became  part  of  the
          determined overcharges.  Similarly, the calculation  of  the  MCI
          increase did not result  in  overcharges  since  the  overcharges
          either remained the same or were reduced after the  MCI  increase
          became effective.  Therefore, since the origin of all overcharges 

          DH 410369-RO
          is not attributable to any reason other than the owner's willful 
          ness, treble damages must be  imposed.   Finally,  the  claim  of
          prejudicial injury is without merit as no actual  harm  from  the
          difference in the overcharge amounts is evident.   The  owner  is
          correct, however, that the Administrator counted one extra  month
          of overcharges of $72.66.  As reduced by this  amount,   trebled,
          total overcharges are reduced to $ 4,105.71 from $4,323.69.

          The tenant's contention that some  of  the  claimed  improvements
          were not actually made cannot be entertained,  since  the  tenant
          did not file a petition, and th s  proceeding  is  therefore  re-
          stricted to the issues raised in the owner's petition.

          The records of DHCR indicate that the tenant has vacated from the 
          premises, and a copy of this Order and Opinion is being forwarded 
          to the tenant's current address.

          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 by the former 
          tenant in the same manner as a  judgment  or  not  in  excess  of
          twenty percent thereof per month may be offset against  any  rent
          thereafter due the owner.

          A copy of this Order and Opinion is also being forwarded  to  the
          current tenant in occupancy, who  is  notified  herein  that  the
          lawful rent for the subject-premises as of the expiration of  the
          former tenants lease on September 30, 1989 was $1,564.39.

          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 that the  Administrator's  order  be,  and  the  same
          hereby is, amended in accordance with this Order and Opinion.


                                                JOSEPH A. D'AGOSTA 
                                                Deputy Commissioner



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