EB510244RO

                                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. EB510244RO

                                          :  DISTRICT RENT OFFICE
           Mark Greenberg Real Estate        DOCKET NO. BC510345R
           Co.,                             
                                             TENANT: Leslie Rinehardt/
                                                     Aleta Jewell

                            PETITIONER    : 
      ------------------------------------X                             


           ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


      On February 22, 1990, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on January 18, 1990, 
      by a Rent Administrator concerning the housing accommodations known as  
      250 West 78th Street, New York, New York, Apartment No. 5AF, wherein the 
      Rent Administrator determined that the owner had overcharged the tenant.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Section 2522.4 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.  

      The tenant originally commenced this proceeding by filing a complaint of 
      rent overcharge.  The owner was served with a copy of the complaint and 
      was directed to submit a complete rental history.  The owner was advised 
      that if it claimed a rent increase for the installation of new 
      equipment, it was required to submit invoice(s) showing the cost and 
      date of installation.  

      The owner submitted the complete lease history to the Administrator.  
      Included therein were claims for the installation of new equipment in 
      the kitchen, as well as a claim for $1800.00 for the "renovation" of the 
      fireplace.




      In the order, the Rent Administrator established the legal regulated 
      rent, and determined total overcharges of $54,142.82 including treble 







          EB510244RO

      damages on overcharges collected on and after April 1, 1984.  The order 
      granted rent increases for new equipment totalling $1,155.69.

      In its petition, the owner protests the Administrator's rejection of the 
      claim for the fireplace, contending that the work constituted the 
      "installation of a brand new wood burning fireplace. . . where none 
      existed before."  It further contends that the fireplace is a "unique 
      feature" of the apartment, such as is present in only one other 
      apartment in the building, warranting an adjustment in the rent and that 
      DHCR has acknowledged such claims previously.  The owner also protests 
      the imposition of treble damages, and states that there is no evidence 
      that overcharges were willful.  The owner maintains that since the order 
      did not specify what evidence was used to determine willfulness the 
      owner is prevented from proving "by preponderance of the evidence" that 
      overcharges were not willful, thereby denying it a "reasonable 
      opportunity to be heard," as required under the Rent Stabilization Law.  
      The owner claims rather that it truly believed (and still does) that the 
      "substantial renovation" of the fireplace entitled it to a rent increase 
      and that it should not be penalized for what is at worst a mere mistake.

      The tenant's answer states that the invoice submitted by the owner 
      clearly shows that the renovation involved maintenance of an existing 
      fireplace, and not, as the owner claims in the petition, the 
      installation of a new one.  Furthermore, the tenant continues, since the 
      owner(s) are well established professionals, they were probably aware 
      that the work was only repairs and could not qualify for a rent 
      increase, which is why the overcharge should be seen as willful.

      In response to the tenant's answer, the owner contends that the work 
      described on the invoice was for more than just minimal repairs and 
      should be considered a complete renovation.  Even if the claim is 
      rejected, however, the owner feels that the work was substantial enough 
      to show that the owner only made an honest mistake in thinking that it 
      would qualify, and that the overcharge should not be considered willful.

      The Commissioner is of the opinion that the petition should be denied.

      Section 2522.4 of the Rent Stabilization Code provides, in part, that an 
      owner is entitled to a rent increase where there has been a substantial 
      increase of dwelling space or an increase in the services, or 
      installation of new equipment or improvements, or new furniture or 
      furnishings, provided in or to the tenant's housing accommodation.  An 
      owner may not, however, collect a rent increase for work that 
      constitutes normal maintenance, painting or repairs.

      Although the owner contends that the work performed on the fireplace was 
      so extensive as to make it a "new" structure, the evidence does not 
      support this contention.  The entire basis for the claim is a single- 
      page agreement which lists the work to be done as follows: 

           (1) Renovation of fireplace at 250 West 78th St. Apt. 5AF 
           Replacement of the fire tank, new fire bricks, new damper, new 
           brick collar; (2) Relining of the chimney with ceramic flues, 
           size 7 1/2" x 7 1/2".

      The total cost of the project was $1,800.00.  Significantly, the owner's 
      original claim that it had installed a "brand new" fireplace "where none 
      had existed before" was withdrawn after the tenant challenged this in 


          EB510244RO

      his answer, and the owner now states that it was only "renovated."  Much 
      is also made of the fireplace being a "unique feature"; an earlier DHCR 
      case, Kashanko Realty, Inc., which held that a garden was a unique 
      feature worth $200.00 per month, is cited to support this.

      If anything, the owner is not helped by the comparison.  A fireplace may 
      be uncommon, but it can hardly be called a "unique feature" that merits 
      a special valuation.  In fact, the owner states that there is another 
      apartment in the same building with a fireplace.   Furthermore, the 
      Kashanko case involved assessment of the fair market value of the 
      apartment for an initial stabilized tenant's fair market rent appeal, 
      rather than a complaint of rent overcharge, and involved an allowance 
      for a "unique feature" newly added to the subject apartment (access to 
      a garden), whereas the instant case involves renovation of an existing 
      feature.  The other two cases cited by the owner, Administrator Order 
      Number CTA0652 (Docket Number TA8469) and Conciliation and Appeals Board 
      Opinion Number TA5452 (Docket Number TA7376), also involved fair market 
      rent appeals rather than overcharge complaints.  Moreover, those cases 
      do not have the persuasive weight of an opinion issued by the 
      Commissioner.

      The claim rests ultimately on the owner's documentation, and whether it 
      demonstrates conclusively that "new equipment" was actually installed.  
      But this standard is not even approached.  A plain reading of the 
      invoice leads to a judgment that the replacement of several worn 
      components of the fireplace was mere maintenance and repair.

      Concerning the imposition of treble damages, Section 26-516 of the Rent 
      Stabilization Law, as amended by the Omnibus Housing Act of 1983, 
      provides that any owner who is found to have collected an overcharge 
      shall be liable to the tenant for a penalty equal to three times the 
      amount of the overcharge unless the owner establishes by a preponderance 
      of the evidence that the overcharge was not willful.  Based on the 
      entire record the Commissioner finds no satisfactory evidence to 
      establish that the overcharge was not willful.  If the overcharge was 
      only an "honest mistake" by the owner in thinking the work on the 
      fireplace would qualify for a rent increase, as the owner claims, the 
      actual increase of $45.00 per month (1/40th the total cost of $1,800.00) 
      would still only have raised the lawful rent to $482.72 ($437.72 + 
      $45.00).  However, the tenant's vacancy rent of $925.00 was more than 
      two and a half times the previous tenant's rent, and an increase for the 
      fireplace would have acounted for only small part of that.  Even in its 
      appeal, petitioner can offer no convincing explanation for how the 
      extraordinary rent increase can be supported by even the most expansive 
      reading of the guidelines.  The Commissioner concludes, therefore, that, 
      under the totality of circumstances, the owner willfully disregarded the 
      Rent Stabilization guidelines in setting the complainant's vacancy rent, 
      and that the imposition of treble damages was warranted.




      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.








          EB510244RO

      THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

      ORDERED, that this Petition be, and the same hereby is, denied; and that 
      the Administrator's order be, and the same hereby is, affirmed.



      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner