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 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 
      period.  

      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 
      1984.

      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.

      ISSUED:





                                                                    
                                           JOSEPH A. D'AGOSTA
                                          Deputy Commissioner

    

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