EF210347RO
                                   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.:  EF210347RO

                     JONATHAN JACOBS,            DRO DOCKET NO.: ZBI210326R

                                                 CURRENT OWNER:  EDDIE DUVERCE  
                                   PETITIONER    TENANT:  JEAN MENAGER
          ------------------------------------X                             



            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                        IN PART


          On June 20, 1990 the above-named petitioner-former owner filed a 
          Petition for Administrative Review against an order issued on May 
          29, 1990 by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York concerning the housing accommodations known as   
          2714 Avenue D, Brooklyn, New York, Apartment No. 4F wherein the 
          Rent Administrator determined that the owner had overcharged the 
          tenant.

          The Administrative Appeal is being determined pursuant to the 
          provisions of Sections 2522.4(a) and 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 in August, 
          1987 of a rent overcharge complaint by the tenant, who stated in 
          substance that she had commenced occupancy on June 25, 1987 
          pursuant to a lease at a rent of $471.21 per month.

          In answer to the complaint, the owner stated in substance that 
          improvements totalling approximately $6,500.00 were made prior to 
          the complainant's tenancy.

          On January 24, 1990 and February 22, 1990 the current owner was 
          requested to submit "[c]opies of cancelled checks (both front and 
          back) and bills showing the cost and date the service was provided 
          or equipment was installed for which 1/40th of the cost is 
          claimed."  In reply, over $6,000.00 worth of invoices were 
          submitted, but only two cancelled checks in payment of $4,300.00 
          invoice were submitted.







          EF210347RO


          In an order issued on May 29, 1990 the Administrator, allowing an 
          increase for $4,300.00 of improvements, found an overcharge of 
          $3,155.63 as of May 31, 1990, including treble damages.

          In this petition, the prior owner contends in substance that proper 
          documentation was included but was not calculated properly; that he 
          made $5,856.00 worth of improvements; and that treble damages 
          should not be imposed.  The former owner again submitted cancelled 
          checks totalling only $4,300.00.

          The tenant did not submit an answer to the petition, although given 
          an opportunity to do so.

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

          The only evidence submitted by the prior owner for improvement 
          costs above $4,300.00 consisted of invoices for floor tiles, for 
          sanding of floors, for a refrigerator, stove and sink, and of a 
          March 17, 1987 contract for new windows at a cost of approximately 
          $26,500.00.  (The building has approximately 24 apartments.  The 
          Division of Housing and Community Renewal's [DHCR's] computerized 
          case tracking system does not show that any application was made 
          for a rent increase based on the installation of a Major Capital 
          Improvement.  The former owner may have intended to charge 
          individual apartment improvement increases based on having windows 
          installed during vacancies or with the written consent by tenants 
          then in occupancy to a rent increase for new windows.  In the 
          present case the prior owner claimed an increase for the 
          expenditure of $1,200.00 for six new windows in the subject 
          apartment.)  While some of the expenditures (such as for sanding of 
          floors) were for work that constitutes ordinary maintenance and 
          repair for which no rent increase is warranted, enough of the 
          claimed improvements would have been allowable that there would 
          have been no overcharge if the owner had submitted adequate proof 
          in the form of cancelled checks.  Since the invoices did not 
          contain proof that they were paid in full to the contractor in 
          accordance with Policy Statement 90-10, they cannot stand alone to 
          corroborate the cost of the allowable improvements without 
          cancelled checks.  While the fact that the tenant did not deny any 
          of the claimed improvements gives some indication that the 
          improvements were actually made, it is not sufficient to warrant a 
          rent increase for them.  The invoices and the tenant's failure to 
          deny do, however, constitute enough evidence of the prior owner's 
          good-faith belief in his entitlement to a rent increase as to 
          warrant removing the treble damages imposed for a willful 
          overcharge.  Pursuant to Section 2526.1(a)(1) of the Rent 
          Stabilization Code, interest is instead imposed on overcharges.  
          The Administrator's rent calculation chart also needs to be revised 
          because it stated that the 22.2 month period from July 25, 1988 to 
          May 31, 1990 was only 18 months.  In addition to imposing interest, 
          this order is also calculating overcharges through May 24, 1990, 
          rather than May 31, 1990, to more accurately reflect the tenant's 
          leases.  The lawful stabilization rent remains $437.54 per month in 
          the lease and the month-to-month tenancy from June 25, 1987 to July 
          24, 1988, and $465.98 per month in the lease from July 25, 1988 to 
          June 24, 1990.  The overcharge is $437.71 from June 25, 1987 to 


          EF210347RO

          July 24, 1988 ($33.67 per month X 13 months), and $737.00 from July 
          25, 1988 to May 24, 1990 ($33.50 per month X 22 months).  Interest 
          to May 31, 1990 (the end of the month of the Administrator's order) 
          is $95.21 and $63.54 for the respective periods.  The total 
          overcharge for the period from June 25, 1987 to May 24, 1990 is 
          therefore $1,333.46.  No excess security is calculated since the 
          owner has stated that the tenant has vacated and that the apartment 
          is now occupied by a man claiming to be her husband.

          The owner is directed to reflect the findings and determinations 
          made in the Administrator's order on all future registration 
          statements, including those for the current year if not already 
          filed, citing the Administrator's order as the basis for the 
          change.  Registration statements already on file, however, should 
          not be amended to reflect the findings and determinations made in 
          the Administrator's order.  The owner is further directed to adjust 
          subsequent rents to an amount no greater than that determined by 
          the Administrator's order plus any lawful increases.

          If the owner has already complied with the Rent Administrator's 
          order and there are arrears due to the owner as a result of the 
          instant determination, the tenant shall be permitted to pay off the 
          arrears in twelve equal monthly installments. Should the tenant 
          vacate after the issuance of this order, or have already vacated, 
          said arrears shall be payable immediately.

          This order may, upon the expiration of the period in which the 
          owner may institute a proceeding pursuant to Article Seventy-Eight 
          of the Civil Practice Law and Rules, be filed and enforced by the 
          tenant in the same manner as a 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 that the Rent Administrator's order be, and the same 
          hereby is, modified in accordance with this order and opinion.  The 
          total overcharge is $1,333.46 as of May 24, 1990.  The lawful 
          stabilization rent is $465.98 per month in the lease from July 25, 
          1988 to June 24, 1990.




          ISSUED:

                                                   ------------------------
                                                   JOSEPH A. D'AGOSTA
                                                   Deputy Commissioner
            
              
                                              





    

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