DOC. NO.: EE 310481-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. EE 310481-RO
                 HARBOR GARDENS ASSOCIATION, :   DRO DOCKET NO.: ZBH-310110R
                                 PETITIONER  :   TENANT-JOHN HARAMIS
         ------------------------------------X

                       ORDER AND OPINION GRANTING PETITION FOR
                            ADMINISTRATIVE REVIEW IN PART

         On May 15, 1990, the above-named petitioner filed a Petition for 
         Administrative Review against an order issued on April 24, 1990 by the 
         Rent Administrator, 92-31 Union Hall Street, Jamaica, New York 
         concerning the housing accommodation known as 41 Crescent Avenue, 
         Staten Island, New York, apartment I-2 wherein the Administrator 
         determined that an overcharge had occurred and directed the owner to 
         refund overcharges of $4,065.70, inclusive of excess security, 
         interest and treble damages on the overcharge.

         The Commissioner has reviewed all of the evidence in the record and 
         has carefully considered that portion of the record relevant to the 
         issues raised in the administrative appeal.

         The tenant commenced this proceeding on August 4, 1987 by filing a 
         complaint of rent overcharge, alleging that the rent of the prior 
         tenant had been substantially lower than the rent the tenant was 
         paying and that the owner had not justified the large increase in 
         rent.   The tenant stated that he had taken occupancy of the subject 
         apartment on November 1, 1986 pursuant to a one year lease terminating 
         October 31, 1987 at a rent of $657.44.

         A copy of the complaint was sent to the owner.

         In reply, the owner submitted a complete rental history, including 
         copies of leases, the 1986 apartment registration on which were 
         indicated numerous improvements made to the apartment, and an order 
         which granted a rent increase for a Major Capital Improvement (M.C.I).  
         The owner stated that the rent included the cost of rehabilitating the 
         apartment and the cost of installing new appliances therein.  The 
         owner also submitted a copy of its computation which determined the 
         rent to be collected.

















         DOC. NO.: EE 310481-RO




         In the order issued on April 24, 1990, the Administrator established 
         the lawful stabilized rent at $630.54 effective February 1, 1988 and 
         directed the owner to refund overcharges of $4,065.70 including excess 
         security, interest and treble damages.

         In the appeal, the owner requests that the order be modified to 
         exclude the assessment of treble damages.  The owner contends that no 
         evidence to establish willfulness was presented and that the order 
         itself is ambiguous in that only interest was checked off on the front 
         of the order whereas both interest and treble damages were included in 
         the amount to be refunded.  The petitioner requests that the order be 
         further modified to allow one fortieth of the cost ($864.71) of 
         sanding and refinishing all the floors to be included in the rent as 
         an improvement.

         In reply, the tenant requests that the petition be denied and contends 
         that there is ample evidence of the owner's willfulness in 
         overcharging.

         The Commissioner is of the opinion that this petition should be 
         granted in part.

         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.  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."

         The Rent Stabilization Law assesses treble damages where the 
         overcharge is "willful".  The statute, in fact, creates a presumption 
         of willfulness subject to rebuttal by the owner showing non- 
         willfulness of the overcharge by a preponderance of the evidence.  
         DHCR has determined that the burden of proof in establishing lack of 
         willfulness shall be deemed to have been met and, therefore, the 
         treble damage penalty is not applicable, in some situations, where, it 
         is apparent or where it is demonstrated that an overcharge occurred 
         under certain specified circumstances, such as where the overcharge is 
         caused by the hypertechnical nature of the rent computation.  See 
         Policy Statement 89-2.












         DOC. NO.: EE 310481-RO


         An example of this type of overcharge is present where the rent 
         guideline increases were computed on the September 30th rent plus a 
         "supplementary adjustment", e.g., a rent increase for new equipment 
         installed which became effective after September 30th, instead of 
         first calculating the guidelines increases and then adding the other 
         charges.  The computation submitted by the owner discloses that the 
         overcharges collected in the instant case were the result of such a 
         hypertechnical rent computation.  Accordingly, the Commissioner finds  
         the owner is deemed to have met its burden  of proving lack of 
         willfulness and thus further finds that the imposition of treble 
         damages was inappropriate in the instant case.  Moreover, since 
         interest on the overcharge collected on and after April 1, 1984 is 
         assessed in all cases where the treble damages penalty does not apply, 
         the Commissioner finds that the assessment of interest is appropriate.  
         Accordingly, the Commissioner modifies the order to remove the treble 
         damages penalty and to direct the owner to refund overcharges of 
         $1457.66 inclusive of excess security and interest but retains the 
         lawful stabilized rent, $630.54 as of February 1, 1988, as established 
         by the Administrator.

         Under the Code, sanding and refinishing floors do not constitute 
         improvements but are considered normal maintenance and repair.  
         Accordingly, the Commissioner finds that the Administrator properly 
         did not allow this cost to be included as an improvement for a rent 
         increase.

         Since the tenant has vacated the subject Apartment, a copy of this 
         order is being sent to the current tenant.

         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, 
         this order may be filed and enforced as judgment.

         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 the order of the Rent Administrator be, and the same hereby 
         is, modified in accordance with this order and opinion.

         ISSUED:
                             
                                                                              
                                                 ELLIOT SANDER
                                                 Deputy Commissioner









    

TenantNet Home | TenantNet Forum | New York Tenant Information
DHCR Information | DHCR Decisions | Housing Court Decisions | New York Rent Laws
Disclaimer | Privacy Policy | Contact Us

Subscribe to our Mailing List!
Your Email      Full Name