EE 410029-RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO. EE 410029-RO

                                              :  DISTRICT RENT OFFICE
               John Schreiber,                   DOCKET NO. ZCJ-510224-R
                                                 TENANT: Martin Moman        
                                   PETITIONER : 

          On May 7, 1990 the above-named petitioner-owner filed a Petition 
          for Administrative Review against an order issued on April 6, 1990 
          by the Rent Administrator, 92-31 Union Hall Street, Jamaica, New 
          York concerning the housing accommodations known as 453 West 48th 
          Street, New York, New York, Apartment No. 2A wherein the Rent 
          Administrator determined that the owner had overcharged the tenant.

          The issue herein is whether the Rent Administrator's order was 

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law and Sections 2522.4(a) and 2526.1(a) of the Rent 
          Stabilization Code.

          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 in October, 
          1988 of a rent overcharge complaint by the tenant, in    which he 
          stated that he had commenced occupancy on August 1, 1988 at a rent 
          of $724.72 per month, and that the roommate of Ted Marriott, the 
          last registered tenant, had told him that Mr. Marriott had lived 
          there for eight years and last had a rent of $367.00.  

          Although Henry Schreiber, the landlord/manager for Midhattan 
          Realty, initially stated on November 19, 1988 that "Apartment 2A 
          has been occupied by one tenant only without any roommates," his 
          later contentions during the course of the proceeding (and in an 
          earlier submission on June 9, 1988 in Docket No. CD 410166-RV, a 
          complaint by the prior tenant Ted Marriott) were that:
          1)   Ted Marriott, with a lease through March 31, 1988 at a rent of 
               $367.06, no longer maintained the subject apartment as his 

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          primary residence by January, 1988, but rather lived in 
               California.  Various people stayed there every few weeks.  
               They paid their rent to Ted Marriott, who in turn sent the 
               lease rent to the owner.

          2)   Ted Marriott had a roommate Curt Jacobs, beginning September 
               19, 1987.  The owner refused to let him stay after Marriott 
               vacated, and initiated proceedings on March 1, 1988 to 
               terminate the lease.

          3)   During the time Curt Jacobs was there, he brought James Lee in 
               as a roommate.

          4)   On March 30, 1988 the owner and James Lee agreed that Lee 
               would receive a lease as the primary tenant at a rent of 
               $724.74 and would let Jacobs remain as a roommate, that Lee 
               would sign a consent to a rent increase for renovations, and 
               that Lee would testify that Marriott vacated by February 1, 

          5)   Renovations costing $10,972.00 were done in April, 1988, with 
               the written consent of James Lee, the primary tenant.

          6)   Marriott continued to support Jacobs by sending him checks to 
               use in payment of the rent.  The owner accepted Marriott's 
               checks from Jacobs, and Lee paid the balance of the rent.

          Among the documents submitted by the owner were a September 8, 1987 
          letter from Marriott to the owner about his new roommate Curt 
          Jacobs; the March 30, 1988 agreement between the owner and James 
          Lee; an April 1, 1988 letter by James Lee agreeing to a $275.00 
          rent increase for renovations; a Contractor and/or Vendor 
          Information Form RA-79 Supplement 1 [normally used for Major 
          Capital Improvement rent increase applications] wherein A. Gallo, 
          site manager, certified on June 14, 1988 that Ja-Dar Remodeling 
          executed a contract on April 1, 1988 to remodel the bathroom, 
          kitchen and living room, and to replace the wood floors, commenced 
          work on April 15, 1988, and completed work on April 28, 1988, all 
          at a cost of $10,972.00; an April 28, 1988 invoice from Ja-Dar for 
          a balance of $5,972.00 after a credit of $5,000.00; a lease made 
          April 1, 1988 between Midhattan Realty and James Lee, to commence 
          that day for a one year period at a rent of $724.72; a copy of an 
          April 1, 1988 check for $5,000.00 and a May 1, 1988 check for 
          $5,972.00, both for "2A remodelling", both made out to "Cash" and 
          both endorsed "Ja-Dar"; an August 22, 1989 letter from A. Gallo of 
          Ja-Dar Remodelling confirming the work and payment; and typed rent 
          ledgers from April, 1987 (when the owner acquired the subject 
          building) through September, 1989, with rents of $367.06 through 
          March, 1988 and of $724.72 beginning April, 1988.

          Among the documents submitted by the tenant were:

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               1)   An affidavit from Ted Marriott that he was the sole 
                    tenant at the subject apartment from April 1, 1979 
                    through July 31, 1988.

               2)   An affidavit from Curt Jacobs that he lived with Ted 
                    Marriott beginning April, 1984; that he was the "sole 
                    bearer of" and "sole resider of" the apartment from 
                    October, 1987 through July, 1988, at which time a notice 
                    of eviction was slid under his door; that he was away on 
                    business at the time and had to have his belongings 
                    transferred to storage; that the owner informed him that 
                    the apartment was needed for his brother; and that he             
                    paid the rent from October, 1987 to July, 1988 with  
                    $367.15 checks provided by Ted Marriott. 

               3)   Copies of cancelled checks from Ted Marriott to Midhattan 
                    Realty for the rent from December, 1987 through July, 
                    1988 [except for May, 1988], all of them for $367.06 
                    other than the July check for $378.07.

               4)   An affidavit from Yasuji Hanada, submitted in a court 
                    case between Midhattan Realty and Amy Turner, the tenant 
                    of Apartment 5B, that he never signed a lease for any 
                    apartment in the building, and that he never resided in 
                    the subject apartment although he visited there on 
                    several occasions.

               5)   A copy of an amended Form RR1-A 1988 rent registration, 
                    naming James Lee as new tenant from April 1, 1988 at a 
                    rent of $724.72, with $274.24 of a rent increase being 
                    listed as due to renovations in April, 1988.

               6)   An October 15, 1989 letter from the tenant contending 
                    that, since the owner had originally registered Yasuji 
                    Hanada as the tenant on April 1, 1988, with a one year 
                    lease commencing on that date, at a rent of $610.50 [such 
                    registration having been received by the DHCR on October 
                    17, 1988 and listing an increase as due to a renewal, 
                    although the owner had supposedly by that time signed a 
                    vacancy lease with James Lee for the same lease period 
                    with a rent of $724.72, which not incidentally was also 
                    the complainant's vacancy rent commencing August 1, 
                    1988], the amendment was designed to prevent any rent 
                    reduction from occurring as a result of Order No. ZDC- 
               7)   An affidavit from the tenant of Apartment 1A that he had 
                    known Ted Marriott and Curt Jacobs for several years 
                    before he moved into the building on January 10, 1988, at 
                    which time they were sharing the subject apartment; that 
                    at no time subsequent to Mr. Marriott's vacature of the 
                    premises  did James Lee or any other person hold legal 

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          tenancy or establish residence in the subject apartment, 
                    until the complainant moved in on August 1, 1988; and 
                    that no construction, physical improvement or work was 
                    undertaken after Mr. Marriott vacated at the end of July, 

               8)   An affidavit from the tenant of Apartment 3A that there 
                    had been no major renovations in the subject apartment, 
                    and no other tenants residing there between Mr. Marriott 
                    and the complainant, between 1980 and the time of her 

               9)   An affidavit from the tenant of Apartment 2B, across the 
                    hall from the subject apartment, that Curt Jacobs shared 
                    the subject apartment with Ted Marriott from 
                    approximately one year before Mr. Marriott vacated the 
                    premises at the end of July, 1988; that at no time 
                    immediately prior or subsequent to Mr. Marriott's 
                    vacature did James Lee or any other person hold legal 
                    tenancy or establish residence in the apartment; that no 
                    construction, physical improvement or work was undertaken 
                    on the apartment prior to Mr. Marriott's vacature; and 
                    that he has met the complainant, who moved in on August 
                    1, 1988 and established legal tenancy.

               10)  An affidavit from Amy Turner, tenant of Apartment 5B, in 
                    a court proceeding, in which she claims that, contrary to 
                    the owner's claims of $12,449.20 in renovations, 
                    absolutely no renovations had been done to her apartment 
                    when she moved in; that she and her parents had to do 13 
                    days of hard work to make her apartment habitable; that 
                    the prior tenants were known drug dealers; and that she 
                    believed the husband was paid to sign a consent for 
                    purported renovations.

               11)  Copies of photographs (the originals of which were 
                    submitted in Docket No. DB 410344-R) of the initial 
                    condition of Apartment 5B, and of Amy Turner and her 
                    parents working on it.

               12)  Copies of paid invoices to Amy Turner for approximately 
                    $1,700.00 worth of new equipment, all being the sorts of 
                    equipment which were supposedly installed new in 
                    Apartment 5B by the owner only months earlier.

          The tenant asserted that the subject apartment clearly had not been 
          renovated.  He also recalled a man named James Lee who came from 
          the owner's office to fix the toilet, and suggested that this was 
          the person whom the owner had sign the purported April 1, 1988 

          On January 18, 1990 a DHCR staff member went to the subject 

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          apartment with instructions to "[s]ee if the following remodelling 
          could have been done April 1, 1988."  The inspector reported that 
          the items mentioned "appear to have been installed prior to April, 

          In an order issued on April 6, 1990 the Rent Administrator found an 
          overcharge of $9,358.56 as of April 30, 1990, including treble 
          damages on overcharges occurring on and after April 1, 1984.  The 
          order stated that the evidence indicated that Ted Marriott was the 
          tenant on a month-to-month basis through July 31, 1988, and that no 
          rent increase was allowed for any improvements because Ted 
          Marriott, the tenant of record, did not give written consent as 

          In this petition, the owner contends in substance that Ted 
          Marriott's tenancy was terminated at the expiration of his lease on 
          March 31, 1988; that he had actually left several months earlier; 
          that he left Curt Jacobs in occupancy; that Mr. Jacobs brought 
          James Lee in as a roommate; that Mr. Lee on March 30, 1988 agreed 
          to enter into a new lease as the primary tenant at a rent of 
          $724.72, to consent to the remodeling of the apartment, and to 
          testify that Ted Marriott had not resided in the apartment since at 
          least February 1, 1988; that the owner did collect a rent of 
          $724.72 commencing April 1, 1988; that although Mr. Marriott may 
          have continued to tender rent on behalf of his friend and prior 
          roommate Curt Jacobs, any arrangement with regard to the rent was 
          between them and Mr. Lee, since the owner's only interest was in 
          seeing to it that the new rent of $724.72 per month was actually 
          paid, as had been agreed to by Mr. Lee, the actual tenant-in- 
          occupancy; that Curt Jacobs and James Lee vacated the apartment 
          during July, 1988; that Ted Marriott did not have to give 
          permission for improvements, since James Lee was the tenant by 
          April, 1988, being in occupancy pursuant to a written agreement and 
          paying rent directly to the owner; that it is undisputed that the 
          owner spent over $11,000.00 in April, 1988 to remodel the 
          apartment; that the complainant should at least have to pay 1/40th 
          of the cost of the improvements for his tenancy, since he is 
          reaping the benefit of them; and that the owner's good faith belief 
          in his right to increase the rent based on actual expenditures 
          should prevent the imposition of treble damages, even if the 
          expenditures are ultimately disallowed.

          In answer, the tenant asserts in substance that the owner cashed 
          Ted Marriott's rent checks for the months up through July, 1988; 
          that he registered a Mr. Hanada as the legal tenant on April 1, 
          1988, even though he never had a lease; that a year after 
          registering this supposed tenant the owner registered a supposed 
          new tenant as of April 1, 1988 named James Lee; that the owner has 
          no letter from any legal tenant allowing a rent increase; that in 
          fact the owner did not improve, nor even clean, the apartment; that 
          the complainant made improvements and repairs including painting 

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          the apartment, installing new floor and ceiling tiles, and 
          installing lighting fixtures in the ceiling where only live wires 
          had been hanging down; and that the owner has overcharged at least 
          6 tenants in the 11 unit building.  The tenant later enclosed 
          photographs of an area of floor which the tenant contends has water 
          stains as well as rotted and missing wood; a broken bathroom towel 
          rack; a rusty stove in a color which the tenant contends hasn't 
          been used for 15 years; a misaligned freezer compartment door; a 
          rusty toilet tank; tiles which the tenant contends are cracked, 
          broken or missing; a bathtub spout which the tenant contends is 
          eaten away by rust and chemicals in the water; and problems with 
          bathroom tile grouting.  The tenant also contends that Curt Jacobs 
          "also had a part time roommate which stayed in the apartment named 
          Nassar Hannada.  After checking Con Edison bills were in Mr. 
          Hannada's name prior to my move in.  There is no record of the 
          bills being in anyone's name by the name of James Lee.  Con Edison 
          though will not send me records of this . . ."

          In response, the owner contends in substance that Ted Marriott's 
          statement that he was the tenant of the subject apartment "until my 
          lease ran out on April 1, 1988" supports the owner's claim that he 
          was not the tenant of the apartment on or after April 1, 1988; that 
          his statement that he began spending time in California in October, 
          1987, returning to New York only "intermittently" until January of 
          1988 when he "left for California to go to school" is an admission 
          that by January, 1988 he was no longer occupying the subject 
          apartment; that Curt Jacob's statement that from October, 1987 to 
          July, 1988 he paid rent to the owner with checks provided by Ted 
          Marriott shows that Ted Marriott is avoiding the facts in stating 
          that the owner continued to accept rent from him through June, 
          1988; that Curt Jacob's claim that he "was the sole resider of the 
          apartment" for the entire period of October, 1987 to July, 1988 is 
          clearly untrue; that the complainant not only admits in his most 
          recent submission that Curt Jacobs had a roommate after Ted 
          Marriott left the apartment, but states that the Con Edison bills 
          were in the name of the roommate; that Ted Marriott could not know 
          with certainly who was actually living in the apartment after he 
          began living in California in January, 1988; that the fact that the 
          tenant claims that the occupant of the apartment was named Nassar 
          Hannada, rather than James Lee, is irrelevant since the individual 
          who resided in the apartment with Curt Jacobs was known to the 
          owner as James Lee; that it is irrelevant how that individual may 
          have obtained Con Edison service in a different name: that it is 
          clear that James Lee did live in the apartment; that there is 
          nothing to suggest that he did not execute the documents submitted 
          by the owner; that the photocopies of the pictures submitted by the 
          tenant are of such poor quality as to provide absolutely no detail; 
          that it would not be surprising if most of the damage claimed by 
          the tenant to be shown in the photographs occurred after the 
          improvements were made, particularly since the pictures may have 
          been taken in 1991, three years after the work was completed; and 

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          that it is significant that the affidavit of Curt Jacobs is totally 
          silent regarding the issue of whether improvements were made to the 
          apartment in 1988, even though he would have personal knowledge of 

          The tenant's response to this submission reiterates points 
          previously made.

          The Commissioner is of the opinion that this petition should be 

          For the reasons set forth infra, the Commissioner does not consider 
          that the documents submitted by the owner regarding renovations and 
          the purported James Lee tenancy can be relied upon.

          In the proceeding before the Administrator the tenant submitted an 
          April 12, 1989 "Dear Resident" letter to him from Ted Marriott, who 
          stated that "I had a friend that visited off and on named Hanada 
          Yasuji.  He was not a roommate and did not pay rent.  He stayed in 
          the apartment for a few days when he was in town.  He is not even 
          a U.S. citizen he is from Japan and visits often.  I told this to 
          Mr. Schreiber also but he wanted to believe Hanada was actually 
          living in the apartment as a resident which was not true.  At any 
          rate Hanada never had a lease before (or after) July 1988."  If 
          this statement is correct it might be understandable that the 
          owner, faced with a tenant-of-record who no longer lived in the 
          apartment, whose lease expired March 30, 1988, and who was 
          forwarding rent checks through someone else (Curt Jacobs) who 
          actually lived in the apartment and to whom the owner did not want 
          to offer a lease, might in October, 1988 register Yasuji Hanada, 
          who was sometimes around for several days at a time, as the tenant 
          commencing April 1, 1988.  It is not understandable how he could 
          have made such a registration in October if he had actually, six 
          months previously on April 1, 1988, signed a lease with James Lee 
          for a rent of $724.72, with a substantial portion of that rent due 
          to purported renovations.  The 1988 registration of Yasuji Hanada 
          stated a rent of $610.50 due to a renewal [although $378.07 would 
          have represented a proper renewal rent, and $414.78 a proper 
          vacancy rent, based on the previous rent of $367.06], rather than 
          being due to renovations.  Mr. Hanada has sworn that he never lived 
          or had a lease there, and the record contains no evidence of such 
          tenancy.  [It is not clear if the Nassar Hannada refered to by the 
          tenant is the same person as Yasuji Hanada.  Even if they are the 
          same person and the tenant is correct in asserting that Con Edison 
          bills were in his name, and even if he were paying the bills 
          because of living there and not just in appreciation of being able 
          to use the apartment during visits, and not just to help a friend 
          in a way similar to that of Ted Marriott, this does not furnish any 
          evidence that a James Lee was in occupancy with a lease.]  It was 
          not until some later time that the owner attempted to revise the 
          registration.  Such attempt did not, however, eliminate the 
          previously submitted April 1, 1988 registration from the DHCR's 

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          records.  This fatally hampers the owner in his attempt to 
          plausibly claim that someone named James Lee was in occupancy on 
          April 1, 1988 pursuant to a lease with a rent of $724.74 based on 
          renovations to be performed after the commencement of the lease.

          The owner has submitted rent ledgers to support his claim that 
          James Lee paid a rent of $724.72 beginning April, 1988. The ledgers 
          appear to have been typed rather than computer generated, since the 
          title "Midhattan Realty" on the 1989 page is shifted several spaces 
          from its location on the 1987 and 1988 pages, and since when "B1" 
          on the 1988 page overlapped a horizontal ruled line below, the form 
          was shifted to move the figures on the rest of the line to be above 
          the horizontal ruled line.  Other than that, all entries are 
          perfectly aligned with each other on each line.  This indicates 
          that the entries were made at one time, since the act of inserting 
          the form in a typewriter each month would not allow such perfect 
          alignment.  In addition, the ledgers do not contain the variations 
          (late fees, partial payments with later compensating overpayments, 
          etc.) normally present in rent ledgers where entries are made as 
          payments occur.  Also, the 1989 ledger has payments of $454.14 for 
          Apartment 3B through May, and again in September.  An apparent 
          transposition typographical error resulted in a listing of $414.54 
          for July and August.  There is no entry for June, but the erroneous 
          $414.54 was placed two lines down for apartment 4B.  It seems 
          unlikely that such a typographical error would occur separately 
          three times in three separate months if payments of $454.14 were 
          actually being received each month.  These factors suggest that the 
          ledgers were prepared at one sitting for the purpose of overcharge 
          proceedings, with most of the information taken from actual 
          contemporaneous records, subject to modification to suit the 
          position that the owner wished to take in the proceedings.  The 
          ledger entries of $724.72 for the subject apartment beginning 
          April, 1988 also give no hint that the owner was cashing checks 
          from Ted Marriott for $367.06 through June and $378.07 for July, 
          1988.  Further, Curt Jacobs, who the owner acknowledged lived in 
          the apartment through July, 1988, has sworn that he was the sole 
          resident of the apartment after Mr. Marriott left.  In addition, 
          the affidavits of other tenants in the building that no one other 
          than Curt Jacobs held legal tenancy or established residence in the 
          subject apartment between Mr. Marriott and the complainant [phrases 
          which thay seen to use to refer to someone they consider to have a 
          legal right to occupy the apartment by virtue of a lease or of 
          being an acknowledged roommate of such a person, since they 
          acknowledge Curt Jacobs as having lived there] support a finding 
          that James Lee was not a tenant of the subject apartment.  Further, 
          while Curt Jacobs contends that he was evicted in July, 1988, the 
          owner claims that he "vacated", along with James Lee (who was only 
          four months into his own lease).

          Moreover, although James Lee supposedly paid a rent of $724.72 for 
          the month of April, 1988, according to the owner, reflecting the 
          full increase for improvements, the work supposedly did not even 

          EE 410029-RO

          begin until April 15th.   Finally, the DHCR inspector's report 
          indicates that any renovation work appeared to have been done prior 
          to April, 1988.

          The Commissioner therefore finds that there was no legitimate James 
          Lee tenancy, no rent of $724.72 being paid commencing April, 1988, 
          and no renovations which would entitle the owner to a rent 
          increase.  Based on the factors set forth above, the Commissioner 
          does not consider that the owner has rebutted the presumption of 
          willful overcharge.  

          Because of the possibility that the rents charged were not reduced 
          after the Administrator's order, the owner is cautioned to adjust 
          the rent, in leases after those considered by the Administrator, to 
          amounts no greater than that determined by the Administrator's 
          order plus any lawful increases, and to register any adjusted rents 
          with the Administrator's order being given as the reason for the 
          adjustment.  Because of the possibility that the tenant herein may 
          have vacated by the time that this determination is issued, a copy 
          of this determination is being mailed to the tenant-in-occupancy.

          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, 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.  The total overcharge, 
          including excess security of $272.61, is $9,358.56 as of April 30, 
          1990.  The lawful stabilization rent is $452.11 per month in the 
          lease from August 1, 1989 to July 31, 1991.


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner

          EE 410029-RO



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