STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NOS.:EH 410157-RO
: EE 410237-RT
CAPRICE MANAGEMENT COMPANY AND
DIANE MACARTHUR BROWN RENT ADMINISTRATOR'S
PETITIONERS : DOCKET NO.: ZAL 410013-RP
------------------------------------X L 3110963-R
ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN PART
On May 31, 1990 and on June 6, 1990, the above-named petitioners each filed
a Petition for Administrative Review against an order issued on May 3, 1990
by the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the housing accommodations known as 320 East 58th Street,
Apartment 8G, New York, New York wherein the Administrator determined that
the owner had overcharged the tenant.
The Commissioner notes that this proceeding was filed prior to April 1,
1984. Sections 2526.1(a)(4) and 2521.1(d) of the Rent Stabilization Code
(effective May 1, 1987) governing rent overcharge and fair market rent
proceedings provide that determination of these matters be based upon the
law or code provisions in effect on March 31, 1984. Therefore, unless
otherwise indicated, reference to Sections of the Rent Stabilization Code
(Code) contained herein are to the Code in effect on April 30, 1987.
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 appeals.
This proceeding was originally commenced on March 29, 1984 when the tenant
filed a rent overcharge complaint.
A copy of the complaint along with a request for a complete rental history
was sent to the owner.
Based upon the owner's apparent default, in an order issued on December 6,
1985 the Administrator determined that an overcharge had occurred.
On November 18, 1986, under Docket No. ARL 06998-L, based upon proof that
the owner had submitted an answer, the matter was remanded for
reconsideration of the owner's answer.
DOCKET NUMBER: EH 410157-RO
In the order here under review, the Administrator determined that the owner
had collected an overcharge in the amount of $4,854.87, through March 31,
1986 inclusive of excess security and interest on the overcharge collected
on or after April 1, 1984.
In her appeal, the tenant contends that the ordered refund should be
augmented by the further overcharges which the owner has continued to
collect to date. The tenant further contends that treble damages, interest
and legal fees should be assessed against the owner.
In its appeal, the owner contends that the order should be modified to
correct erroneous calculations or reversed to permit de novo processing.
The owner asserts that the Administrator erred 1) in applying Guidelines to
the renewal lease; 2) in omitting certain improvements from the permissible
rent increase, including countertops and sink in the amount of $334.83,
venetian blinds for $118.42 and floor tile in the amount of $229.26 which
were made pursuant to a Purchase Agreement entered into with the tenant.
The owner also requests de novo an increase based upon the installation of
five windows in or about January 1985 at a cost of $875.00; 3) in failing
to take into account the owner's attempt to mitigate the overcharge by
unilaterally reducing the rent and crediting the tenant to offset the rent
before the order's issuance. The owner further contends that interest on
the overcharge is inappropriate because of this mitigation.
In response to the tenant's petition, the owner asserts that the tenant has
incorrectly calculated the rent paid for the period April 1, 1986 through
March 31, 1988 and since there was no willfulness in any overcharges,
treble damages are inappropriate.
The Commissioner is of the opinion that these petitions should each be
granted in part.
Review of the record reveals that the stated rent ($370.80) in the renewal
lease commencing July 1, 1979 and terminating June 30, 1981 was amended by
rider to correctly apply the applicable guideline increase, changing the
rent to $382.75. The Administrator used the unamended amount in
calculating the legal stabilization rent which should be recalculated,
taking into account the legal rent collected at that time.
Section 20C(1) of the Code provides that where there has been an
installation of new equipment in a stabilized apartment, the monthly
stabilization rent for said unit may be increased by 1/40th the cost of
such new equipment provided the tenant then in occupancy has consented
thereto in writing. However, new equipment installed during a vacancy
prior to the commencement of a new tenancy and reflected in the lease rent,
may be collected without the new tenant's consent to pay such increase.
In the instant case, the record reveals that the owner ws permitted a rent
increase of $27.37 based on qualifying improvements made during the vacancy
An increase for the countertop and sink, installed subsequent to the
commencement of the tenancy is disallowed because there is no written
tenant consent. An increase for the venetian blinds is also disallowed
because the owner's bill does not disclose the date of installation so it
cannot be determined if tenant consent was required. Installation of floor
DOCKET NUMBER: EH 410157-RO
tiles is considered ordinary maintenance and does not qualify for a rent
increase pursuant to Section 20C(1). An administrative review is not a de
novo proceeding; consequently, the cost of new windows cannot be considered
in this appeal. Accordingly, the Commissioner finds that the Administrator
correctly calculated the appropriate rent increase based upon improvements.
Review of the record reveals that the owner herein retroactively reduced
the rent for the period November 1, 1982 through March 31, 1984 and for the
period November 1, 1984 through July 31, 1985, giving the tenant a credit
of $1,898.70 to offset rent owed. Accordingly, the overcharge to be
refunded to the tenants is recomputed in the rent calculation chart
attached to and fully made a part of this order.
For overcharges collected on or after April 1, 1984, if willful, Section
2526.1 of the current code (effective May 1,1 987) provides that a penalty
of treble damages be imposed. If the overcharge is proved not willful by
a preponderance of the evidence, the code provides for the assessment of
interest as the penalty.
The owner herein has not proved by a preponderance of the evidence that the
overcharge was not willful. Accordingly, the Commissioner imposes treble
damages instead of interest on the overcharge collected on or after April
With regard to the tenant's contention that the overcharge should be
updated past March 21, 1986, it is noted that in the original proceeding
before the Rent Administrator (prior to the remanded proceeding), the rent
overcharge was only calculated through March 31, 1986 and such calculation
cannot now be updated since this is not a de novo proceeding. However, the
owner is cautioned that it must base subsequent rent upon the amount
determined in this order and refund any excess rent for subsequent periods
to the tenant. If the owner does not do so, the tenant may file another
overcharge complaint for subsequent overcharges. Further the tenant is
obligated to pay only the legal regulated rent as determined by this order
plus any lawful subsequent increase due to lease renewals, etc.
Since the issue of attorney's fees was not raised in the proceding before
the Administrator, it would be inappropriate to consider it in this appeal
since this is not a de novo proceeding.
Based on the foregoing, a total overcharge of $5,163.54 occurred from
November 1, 1982 to May 31, 1986 including treble damages on the overcharge
occurring on and after April 1, 1984 and excess security.
Because this determination concerns lawful rents only through March 31,
1986, the owner is cautioned to adjust subsequent rents to an amount no
greater than that determined by this order plus any lawful increases.
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.
DOCKET NUMBER: EH 410157-RO
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that these petitions be, and the same hereby are, granted in part,
and the Rent Administrator's order be, and the same hereby is, modified in
accordance with this order and opinion.
JOSEPH A. D'AGOSTA