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. EB510244RO
: DISTRICT RENT OFFICE
Mark Greenberg Real Estate DOCKET NO. BC510345R
TENANT: Leslie Rinehardt/
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
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
In the order, the Rent Administrator established the legal regulated
rent, and determined total overcharges of $54,142.82 including treble
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
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
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.
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.
JOSEPH A. D'AGOSTA