STATE OF NEW YORKp
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 NO.:
PAUM SALES CORP.,
DRO DOCKET NO.:
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On November 14, 1990, the above named petitioner-owner filed a
Petition for Administrative Review against an order issued on
October 25, 1990, by a Rent Administrator concerning housing
accommodations known as Apartment 5-C at 4053 Carpenter Avenue,
Bronx, New York, wherein the Rent Administrator determined that
the tenant had been overcharged in the amount of $5,348.68,
including excess security and treble damages.
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 of a rent
overcharge complaint by the tenant on October 23, 1987.
The tenants took occupancy pursuant to a one-year lease com-
mencing September 1, 1986, and expiring August 31, 1987, at a
monthly rent of $317.06.
The owner was served with a copy of the complaint and was
directed to submit a complete rent history from the base date,
including copies of all leases. The owner complied with this
request. Included with the owner's answer were bills for
equipment that was installed in the apartment immediately prior
to complainant's occupancy, including a new stove and
refrigerator. The owner also claimed that other equipment was
installed but did not have proof of costs or payment.
In Order No. BJ 610571-R, issued on October 25, 1990, the
District Rent Administrator determined overcharges of $28.75 per
month on the complainant's initial lease which, as compounded by
guidelines increases over the two subsequent lease terms resulted
in total actual overcharges of $1,768.39. With the application
of treble damages for overcharges occurring after April 1, 1984,
and excess security of $43.51, total overcharges amounted to
$5,348.68. The Administrator cited as the basis for the initial
overcharges that the actual cost of the equipment was less than
claimed, and that the owner had improperly added a second guide-
lines increase for the complainant's vacancy lease even though an
increase had already been taken for the same guidelines period in
the previous lease.
In its petition, dated November 14, 1990, the owner contends that
the Rent Administrator erred by failing to include the tax and
delivery charges in calculating the cost of the equipment.
Petitioner also encloses copies of several other bills for
equipment, including a bathroom sink and cabinet, as well as
bills for a new kitchen floor and bathroom walls and floor, none
of which had been submitted in the record below. The owner also
disputes the finding of treble damages, since the owner still had
no idea why there was an overcharge, which proves it could not
have been intentional.
The Commissioner is of the opinion that this petition should be
granted in part.
Section 2522.4 (a)(1) of the current Rent Stabilization Code
provides, in part that an owner is entitled to a rent increase
where there has been a substantial increase of dwelling space or
an increase in the services, or installation of new equipment or
improvements, or new furniture or furnishings, provided in or to
the tenant's housing accommodation. An owner may not, however,
collect a rent increase for work that constitutes normal decor-
ating, painting or repairs.
The owner's claim that the Administrator improperly ignored the
cost of the new sink and other equipment is not correct, since
the owner failed to include documentation for those items in the
record below, and it is not admissible on appeal. However, the
claim that the stove and refrigerator were undervalued is
correct. The record shows that the Administrator failed to
include tax and a $15.00 delivery charge (based on a $30.00
charge for 2 deliveries to two apartments on the same day). As
recalculated, the total cost of the equipment is increased to
$975.12 from $889.00, as follows:
Refrigerator $ 464.00
Tax (8%) 71.12
Total $ 975.12 divided by 40 = $24.38
The Commissioner also agrees with the owner's contention that
treble damages were not appropriate under the current circum-
stances. In the present case, the Administrator correctly denied
the claim for certain items of equipment because the owner had
failed to submit documentation of their cost in the record below.
Nevertheless, it has been held that where a rent increase is not
authorized because of the failure to document the cost of equip-
ment that was shown to have been installed, such overcharge
cannot be said to be willful (Accord: ARL 13023-K). All remaining
overcharges are shown to be due to the compounding of a guide-
lines increase within the same guidelines period. This error has
been found to be of a "hypertechnical nature" that, according to
the DHCR's Policy Statement 89-2, is not considered willful and
thus should not be assessed for treble damages.
Total overcharges are thus reduced to $1,805.46, from $5,348.68,
as documented in the rent calculations chart affixed hereto and
made a part hereof.
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 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 owner.
If the owner has already complied with the Administrator's order
and there are arrears due to the owner as a result of the instant
determination, the tenant may pay off the arrears in twenty-four
(24) equal monthly installments. Should the tenant vacate after
the issuance of this order, said arrears shall be payable immed-
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that the Petition be, and the same hereby is granted in
part, and that the Administrator's order be, and the same hereby
is amended in accordance with this order and opinion.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner