EC 510116 RO

                                  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.: EC 510116 RO

                    WEBER-O'CONNOR
               HOME MANAGEMENT GROUP INC.,
                                                DRO DOCKET NO.: ZAH 510346 R

                                                TENANT:   JEANETTE   BARRETT
                                    PETITIONER    
          ------------------------------------X 


            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW


          On March 14,  1990,  the  above-named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          February 7, 1990, by the Rent Administrator, Gertz Plaza,  Queens
          New York, concerning the housing accommodations known as 601 West 
          163rd Street, New York, New York, Apartment No. 5G,  wherein  the
          Rent Administrator determined that the owner had overcharged  the
          tenant.

          The Administrative Appeal is being  determined  pursuant  to  the
          provisions of Section 2526.1 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.  

          This proceeding was originally commenced by the filing of a  rent
          overcharge complaint by the tenant in August,  1986.   The  owner
          was served with a copy of the tenant's complaint and submitted  a
          complete  rental  history  as  required.   The  owner  stated  in
          substance that there was no rent overcharge in that  the  subject
          one room apartment had been substantially rehabilitated since the 
          base date of April 1, 1984  and  that  the  total  cost  of  such
          rehabilitation  was  over   $23,000,   that   such   improvements
          consisted of demolition  of  existing  partitions  and  finishes,
          removal of all plumbing and old windows, restructuring of  fallen
          floor beams,  installation  of  new  plumbing,  windows,  risers,
          fixtures and fittings, the change of kitchen layout, installation 
          of new electric wiring and new light fixtures, new floor  tiling,
          new wall finishes, new kitchen appliances and  cabinets  and  new
          bathroom accessories.  In addition in  the  $23,000  amount,  the
          owner  claimed  construction  costs  attributed  to  the  subject
          apartment such as Lally columns  and  beams,  a  vent  shaft  and
          risers.  In support of its contention, the owner submitted copies 






          EC 510116 RO
          of  some  cancelled  checks  which  could   not   be   attributed
          specifically to the subject apartment since payment was made  for
          work done throughout  the  subject  premises.   Subsequently  the
          owner  submitted  an  affidavit  from  the   president   of   the
          construction company handling the work at the subject premises to 
          the effect that  the  cost  of  the  renovation  of  the  subject
          apartment was $21,000.00 not including the  window  installation,
          that the total renovation work of the subject premises  was  over
          $600,000.00; that he was paid on an open account and it  is  hard
          to determine which of the owner's checks correspond with which of 
          his invoices.

          In response to the owner's answer, the tenant stated in substance 
          that although some work was done, the owner  failed  to  document
          the claimed costs, that cancelled checks submitted by  the  owner
          add up to only $154,907.50, that the claimed costs of  $23.000.00
          to remodel a small studio apartment  are  clearly  excessive  and
          that the replacement of structural beams  is  necessary  for  the
          soundness of the entire  building  and  should  not  be  used  to
          increase the rent of the subject apartment.

          In Order Number ZAH 510346 R, the Rent Administrator  established
          the lawful stabilized rent as $424.65  effective  June  1,  1986,
          determined that the tenant had been overcharged  and  directed  a
          refund to the tenant of $4,437.33  including  treble  damages  on
          overcharges  collected  on  and  after   April   1,   1984.    In
          establishing,  the  rent  as  $424.65,  the  Rent   Administrator
          provided a rent increase of $273.75 based  on  a  total  cost  of
          $10,950.00 for  allowed  improvements  and  equipment.   However,
          $10,500.00  costs  was  disallowed-amounts  attributed  to  lally
          columns, beams, vent shaft, risers-on the basis  that  such  work
          would be considered repair work or in the nature of building-wide 
          improvements  for  which  the  owner  would  have  to   file   an
          application for a major capital improvement (hereafter MCI)  rent
          increase.  The Rent Administrator also noted that the tenant  had
          vacated the subject apartment.

          In this petition, the owner contends in substance that  the  Rent
          Administrator improperly excluded a vacancy allowance of  7  1/2%
          pursuant to Guideline 17; that the Rent Administrator  improperly
          excluded the costs of the  lally  columns  and  beams  which  was
          essential work and should not be considered as repair work;  that
          the Rent Administrator improperly excluded the costs incurred for 
          the vent shaft and plumbing  work  and  that  the  imposition  of
          treble damages was  not  warranted  since  the  owner  relied  on
          improvements it actually made when setting the rent.

          In  answer  to  the  owner's  petition,  the  tenant  stated   in
          substance that the Rent Administrator's order was correct.

          The Commissioner is of the opinion that this petition  should  be
          denied.
          With regard to the owner's contention that it  should  have  been
          credited with a 7 1/2% vacancy allowance  pursuant  to  Guideline
          17, it is noted that under Guideline 17 no vacancy  allowance  is
          permitted where more than 10% of the housing units  in  buildings
          of over 50 units were vacant  for  the  60  days  proceeding  the
          commencement of the vacancy lease at issue.  In the instant  case
          registration data submitted by the owner  indicates  that  as  of






          EC 510116 RO
          April 1, 1986 there were nine vacant apartments in  the  then  64
          unit subject premises and that as of April  1,  1987  there  were
          seven vacant apartments in the then  65  unit  subject  premises.
          The tenant herein first moved to the subject  apartment  pursuant
          to a lease commencing June 1, 1986.  The aforementioned  evidence
          supports a finding that over 10% of  the  housing  accommodations
          were vacant so that the owner was not  entitled  to  the  7  1/2%
          vacancy allowance.

          With regard to the owner's contentions  that  the  costs  of  the
          lally columns and beams, vent shaft and plumbing work should  not
          have been excluded, the Commissioner is of the opinion that  this
          type of work clearly must be considered repair work or  work  for
          which the owner should have sought a  major  capital  improvement
          rent increase if the work was of a building-wide nature.  Further 
          it is noted that the above work was not done just for the subject 
          apartment but was done for at least several apartments  and  that
          the owner did not prove specifically what work was attributed  to
          the subject  apartment  with  a  complete  set  of  invoices  and
          cancelled checks but  merely  submitted  an  affidavit  from  its
          contractor.  In this connection, it is also noted that  even  for
          the  cost  allowed  of  $10,950.00,  the  owner  did  not  submit
          conclusive documentary evidence nor establish exactly  what  work
          was done.  However in the interests of equity and the  fact  that
          it was established that extensive work was in fact  done  in  the
          subject apartment, the Commissioner is of the  opinion  that  the
          $10,950.00 cost allowance should not be disturbed.

          With regard to the owner's  contention  that  the  imposition  of
          treble damages was not warranted,  Section  2526.1  of  the  Rent
          Stabilization Code provides in pertinent part that any owner  who
          is  found  by  the  DHCR  to  have  collected  a  rent  or  other
          consideration in excess of the legal regulated rent on and  after
          April 1, 1984 shall be ordered to pay to  the  tenant  a  penalty
          equal to three times the amount of such  excess.   If  the  owner
          establishes  by  a  preponderance  of  the  evidence   that   the
          overcharge was not willful, the DHCR shall establish the  penalty
          as the amount of the overcharge plus interest from  the  date  of
          the first overcharge on or after April 1, 1984.

          In the instant case,  the  owner  has  not  submitted  sufficient
          evidence to substantiate its claim that the  overcharge  was  not
          willful  in  that  the  overcharges  resulted  from  the  owner's
          inclusion of a  rent  increase  for  work  that  is  clearly  not
          apartment improvements for which a  rent  increase  is  warranted
          pursuant to Section 2522.4(1) of the Rent Stabilization Code.

          Accordingly, the Rent Administrator's order was warranted.

          Because this determination concerns  lawful  rents  only  through
          December 31, 1987, the owner is cautioned  to  adjust  subsequent
          rents to an amount no greater than that determined  by  the  Rent
          Administrator's order plus any lawful increase, and  to  register
          any adjusted rents with this order and opinion being given as the 
          explanation for the adjustment.

          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






          EC 510116 RO
          manner as a judgment.  A copy of this order is being sent to  the
          tenant currently in occupancy at the subject apartment

          THEREFORE,  in  accordance  with  the  provisions  of  the   Rent
          Stabilization Law and Code, it is

          ORDERED, that this petition for administrative review be, and the 
          same  hereby  is,  denied,  and,  that  the  order  of  the  Rent
          Administrator be, and the same hereby is, affirmed.



          ISSUED



           
                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner


    

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