DOCKET NO.: EG 610159 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK  11433
          ------------------------------------X   SJR 5931 (Mandamus)
          APPEAL OF                               DOCKET NO.: EG 610159-RO

                M. & L. Milevoi,                  DRO DOCKET NO.: 

                                                  TENANT: Maria Arias



          On July 9, 1990 the above named petitioner-owners filed a 
          Petition for Administrative Review against an order issued on 
          July 2, 1990 by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York concerning housing accommodations known as 
          Apartment 31-A at 1188 Grand Concourse, Bronx, New York wherein 
          the Rent Administrator determined that the owners had overcharged 
          the tenant.

          The issue in this appeal is whether the Rent Administrator's 
          order was warranted.

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law and Sections 2522.4(a) and 2526.1 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 
          February, 1989 of a rent overcharge complaint by the tenant, in 
          which she stated that she had commenced occupancy on November 1, 
          1988 at a rent of $700.00 per month, and that the previous tenant 
          had a rent of $305.69.  

          The owner was served with a copy of the complaint and was 
          requested to submit rent records to prove the lawfulness of the 
          rent being charged.  In answer to the complaint, the owner 

          DOCKET NO.: EG 610159 RO

          submitted a complete rental history from base date as required, 
          including invoices and cancelled checks for improvements.

          In an order issued on July 2, 1990 the Rent Administrator, 
          disallowing all claimed improvements and imposing treble damages, 
          determined that the tenant had been overcharged in 
          the amount of $20,851.44 as of June 30, 1990, and directed the 
          owners to refund such overcharge to the tenant as well as to 
          reduce the rent.

          In this petition, the owners contend in substance that there was 
          no rent overcharge in that the Rent Administrator's order failed 
          to take into account the fact that they had done a lot of work on 
          the subject apartment during a vacancy and had submitted proof of 
          the expenditures.

          The Commissioner is of the opinion that this petition should be 

          The owner based its claim to an entitlement to a large rent 
          increase on the payment of $13,583.60, drawn on an "M. & L. 
          Milevoi Special" checking account, to Mario Heating Contractor, 
          Inc. for a new kitchen complete with new walls, new floor, new 
          cabinets, new stove, and new refrigerator; two new bedroom walls, 
          two new living room walls; new walls and ceiling in the dining 
          room; new doors and locks; new closet doors; and other 
          miscellaneous items.  Mario Heating Contractor, Inc., paid 
          $13,583.60 by the owner for the renovations, had paid more than 
          that for materials and equipment alone to Ditmars Lumber & 
          Millwork, Inc. ($9,616.82) and Long Island Janitorial Supply 
          ($5,000.57).  Although these vendors were paid by Mario Heating 
          Contractor, Inc., all invoices named "Mario Milevoi," "Mr. 
          Milevoi Htg. Contg.," "Mr. Milevoi," or "Milevoi."  The checks 
          drawn on Mario Heating Contractor, Inc. were signed by either 
          Lucia Milevoi or Mario Milevoi, in the same handwriting used on 
          the present petition and on the tenant's leases with Mario and 
          Lucia Milevoi.  The address (20-66 43rd Street, Astoria) given on 
          Mario Heating Contractor's checks is also the address given on 
          the apartment registration for the building owners, Mario and 
          Lucia Milevoi.  This strongly suggested that Mario Heating 
          Contractor Inc. was owned by Mario and Lucia Milevoi of M. & L. 
          Milevoi, the owners  of the subject apartment.  Because a rent 
          increase based on work done by an owner's own company requires a 
          closer scrutiny of claimed expenditures, a staff member of the 

          DOCKET NO.: EG 610159 RO

          DHCR conducted a physical inspection of the subject apartment on 
          May 2, 1990 to look for the claimed inprovements.  The inspector 
          noted that one pair of door lock handles had been installed, but 
          found no evidence of new locks, pre-hung  door units, bifold 
          units, new bedroom door locks, passage lock, or new oak flooring.  

          The inspector noted that one dining room wall was cracked and 
          peeling paint or plaster, and that another one had been plastered 
          but was in need of painting.  While the inspector was requested 
          to look for new bedroom and dining room walls, new dining room 
          ceiling and new appliances claimed to have been installed in 
          October, 1988, he reported just that they were not defective.  
          However, at the end of the inspection report, following the 
          specific items looked for, he noted "N/E [no evidence] of any new 
          installation in the apartment."  Based upon this inspection, 
          which failed to find evidence of the improvements purportedly 
          made by the owner's company (other than the new doorknob pair, 
          which could be considered ordinary maintenance and repairs), the 
          Commisioner finds that the Administrator was warranted in denying 
          any rent increase based upon claimed improvements.  While the 
          owners, through their company Mario Heating Contractor, may have 
          purchased various materials and new equipment, the evidence of 
          record including the results of a physical inspection does not 
          indicate that the expenditures were for the benefit of the 
          subject apartment.  

          The owners are 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 

          This order may, upon the expiration of the period in which the 
          owners 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 or not in excess 
          of twenty percent thereof per month may be offset against any 
          rent thereafter due the owners.

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

          ORDERED, that this petition be, and the same hereby is, denied 
          and that the Rent Administrator's order be, and the same hereby 

          DOCKET NO.: EG 610159 RO

          is, affirmed.  The lawful stabilization rent is $385.82 per month 
          in the lease commencing November 1, 1989.  The total overcharge,  
          including excess security of $352.68, is $20,851.44 as of June 
          30, 1990.


                                             ELLIOT SANDER
                                             Deputy Commissioner



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