STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.:
KREISEL COMPANY RENT ADMINISTRATOR'S
PETITIONER TENANT: ZOLTAN MASON
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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
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
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
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
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