DK 410299 RO

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

      APPEAL OF                              DOCKET NO. DK 410299 RO 

                                          :  DISTRICT RENT OFFICE
                                             DOCKET NO. CJ 410204 R
           John Schreiber,                   
                                             TENANT: Janine Pearce            

                            PETITIONER    : 


      On October 31, 1989, the above-named owner's representative timely 
      refiled a Petition for Administrative Review against an order issued   
      by a Rent Administrator on September 5, 1989, concerning the housing 
      accommodations known as 22 West 90th Street, New York, New York, 
      Apartment No. 1F, wherein the Administrator determined that the above- 
      named tenant had been overcharged.

      This proceeding originated with the tenant's 1988 overcharge complaint.  
      In response the owner submitted inter alia: a memorandum addressed to 
      him under the letterhead of "Ja-Dar Remodeling" of Stamford, 
      Connecticut, dated April 1, 1986, which states in pertinent part:

           Replace kitchen and kitchen cabinets    $2500.00

           Remodel bathroom incl. new sink, 
           toilet, bath and tiles                  $6000.00
           Replace wood floors, stain and varnish  $2000.00;

      a similar memorandum dated April 28, 1986, on which it is hand-written 
      that $10,893 has been "paid in full"; and a lease rider dated May 1, 
      1986, in which the tenant at that time stated "To Whom it May Concern" 
      that she was aware of "substantial improvements" to the subject 
      apartment, consisting of "a new bathroom, a new floor and new kitchen 
      appliances and cabinets."

      The tenant herein replied in February, 1989, stating inter alia: that 
      she was shocked at the owner's above-described answer; that neighbors 

          DK 410299 RO

      who had resided in the building in 1986 (and who could hear everything 
      through their paper-thin walls) had assured her the apartment had not 
      been remodeled as claimed; that those tenants were willing to submit 
      affidavits to that effect; that the tenant's refrigerator had no freezer 
      door and that the shelf brackets therein had rusted off; that the "tiles 
      in the bathroom are old, cracked and many are missing"; that the kitchen 
      appliances "are ancient"; and that the tenant would "welcome a visit 
      from an inspector if that is possible."  Along with her reply the tenant 
      submitted several photographs portraying (a) an open freezer compartment 
      encrusted with several inches of ice on all sides, (b) an old stove and 
      (c) chipped and/or missing wall tiles (labelled "bathroom"); the tenant 
      added that she could "provide a lot more [photographs] if necessary."  
      (It appears that the tenant's reply was not served on the owner.)

      In response to queries from the Administrator, the owner stated inter 
      alia that the kitchen had been "totally remodeled," including a new 
      refrigerator and a new stove.

      The Administrator's order, here appealed, followed.  It includes , for 
      the lease period commencing on May 1, 1986, a rental increase based on 
      $1,903.00 in improvements instead of the aforementioned $10,593.00 that 
      the owner claimed he had spent.  The reason given for the smaller 
      allowance is that because the owner had paid cash for the improvements, 
      the "J-51 schedule" was being used to determine the amount deemed to 
      have been spent thereon.

      In this petition, the owner attacks the determination of overcharge on 
      the ground that the policy of employing a schedule as aforementioned 
      rather than acknowledging sums paid in cash for improvements is 

      In answering the instant petition, the tenant reiterates her position 
      before the Administrator, not addressing petitioner's argument regarding 
      cash payments and the J-51 schedule.

      Having carefully considered the record, the Commissioner is of the 
      opinion that the petition should be granted in part, and this proceeding 
      remanded to the Administrator for redetermination of the amount spent 
      for the improvements in question.

      Pursuant to judicial decision, it is no longer DHCR policy to employ a 
      schedule when an owner claims to have paid cash for improvements; rather 
      the evidence submitted must be evaluated on its merits within the 
      Administrator's sound discretion.  The determination herein cannot, 
      therefore, be sustained.

      Because the subject order appealed herein does not itemize the total 
      that the Administrator deemed spent on the improvements in question, the 
      Commissioner cannot now ascertain to what extent the Administrator found 
      each claimed improvement worthy of inclusion therein.  This matter will 

          DK 410299 RO

      therefore be remanded to the Administrator for a determination, de novo, 
      of this issue and of the consequent total overcharge, if any.  Further 
      the tenant's contention that the improvements claimed were not actually 
      made should be considered and an inspection should be conducted and/or 
      a hearing should be held, if warranted.  Tenant's February 1987 answer 
      should be served on owner and owner given a chance to reply.

      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, and that this proceeding be, and the same hereby 
      is, remanded to the Rent Administrator for redetermination of the 
      tenant's overcharge complaint in accordance with this order and opinion.  
      The automatic stay of so much of the Rent Administrator's order as 
      directed a refund is hereby continued until a new order is issued upon 
      remand.  However, the Rent Admnistrator's determination as to the rent 
      is not stayed and shall remain in effect, except for any adjustments 
      pursuant to lease renewals, until the Administrator issues a new order 
      upon remand.


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner


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