EL 210405-RO
                                  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




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          IN THE MATTER OF THE ADMINISTRATIVE     SJR 5821 (DEEMED DENIAL)
          APPEAL OF                               ADMINISTRATIVE REVIEW
                                                  DOCKET NO.:  EL 210405-RO
              CHARLES BIRDOFF AND COMPANY,
                                                  DRO DOCKET NO.: CB 210031-R
                                                  TENANT: JASON LIEBLICH
                                 PETITIONER
          ----------------------------------X


            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                        IN PART
                                          

          On December 10, 1990 the above  named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          November 5, 1990 by the  Rent  Administrator,  92-31  Union  Hall
          Street, Jamaica, New York concerning housing accommodations known 
          as Apartment B1 at 250  Washington  Avenue,  Brooklyn,  New  York
          wherein the Rent Administrator  determined  that  the  owner  had
          overcharged the tenant.

          Subsequent thereto, the petitioner-owner filed a Petition in  the
          Supreme Court pursuant to Article 78 of the  Civil  Practice  Law
          and Rules requesting that the "deemed denial" of its Petition for 
          Administrative Review be annulled.  The proceeding  was  remitted
          to the Division of Housing and Community Renewal (DHCR), and  the
          owner's petition is herein decided on the merits.

          The  issue  in  this  appeal  is  whether   the   District   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(a)  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, 1988 of a rent overcharge complaint by the  tenant,  in
          which he stated that he had commenced occupancy on May  15,  1987
          at a rent of $750.00 per month.

          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
          submitted an initial apartment registration prepared December  5,






          EL 210405-RO
          1986, which stated that the April 1, 1984 rent had  been  $332.17
          but that the lawful rent was $850.00 effective December 19,  1986
          because of "totally renovated apartment"; and a lease  commencing
          December 19, 1986 at a rent of $850.00.  On August  8,  1990  and
          September 6, 1990 the owner was requested to submit  the  initial
          registration, proof of service of that registration, leases  from
          April 1, 1984, a docket number  or  copy  of  the  claimed  Major
          Capital Improvement order, and copies  of  cancelled  checks  and
          bills for improvements for which a rent  increase  of  1/40th  of
          the cost was claimed.  In reply the  owner  maintained  that  the
          registration  prepared  December  5,  1986,   was   the   initial
          registration, and submitted proof of service of that registration 
          on December 27, 1986, a rental history  only  from  December  19,
          1986, and a copy of an M.C.I. order granting an increase of $1.69 
          per month per room, effective September 1, 1986.  Upon being sent 
          a second Final Notice proposing the imposition of treble  damages
          because of a failure to submit leases from April  1,  1984  along
          with an RR-1 form and proof of service, the owner  by  letter  of
          November 16, 1990 submitted the same materials as before; claimed 
          that it had to submit a rental history only from  1986  and  that
          treble damages would not be warranted where the  DHCR  denied  an
          increase  charged  in  good  faith  by  an   owner   based   upon
          improvements; and stated that "[a]lthough not  requested  in  the
          two Final Notices, the owner has, upon  information  and  belief,
          submitted documentation to prove that the apartment  was  totally
          renovated."  The file of the proceeding before the  Administrator
          does not contain any such documentation.

          In an  order  issued  on  November  5,  1990  the  Administrator,
          applying only Guidelines increases beginning December 19, 1986 to 
          the registered April 1,  1984  rent  of  $294.25,  determined  an
          overcharge of $11,228.84 from May 15, 1987 to February 14,  1988,
          including treble damages.

          In this petition the owner contends in substance that it expended 
          enough on renovations ($19,500.00) and new appliances ($1,690.20) 
          during a vacancy to warrant the rent charged; that the  DHCR  has
          allowed a 1/40th increase for nearly  identical  improvements  in
          another case; that a rent increase of  $6.76  should  be  allowed
          because of a Major Capital Improvement (MCI) order;  that  treble
          damages should not be imposed if the owner was mistaken about its 
          entitlement to a 1/40th increase; that the Administrator's  order
          does not indicate that the  evidence  was  considered;  that  the
          legal regulated rent for the purpose of  calculating  overcharges
          is the rent in the initial registration filed in December,  1986;
          and that the tenant did not challenge either  the  1984  or  1986
          initial registrations within 90  days.   With  its  petition  the
          owner has enclosed a proposal and cancelled checks for $19,500.00 
          in renovation work, and  paid  invoices  for  $1,690.20  for  new
          equipment and new kitchen cabinets.

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

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

          It is well-settled  that,  absent  good  cause  being  shown,  an
          Administrative Review is not a de novo proceeding but is  limited






          EL 210405-RO
          to the issues and evidence which were before  the  Administrator.
          On August 8 and September 6, 1990 the owner was asked  to  submit
          evidence regarding improvements and  new  equipment,  but  rather
          than comply with the request by submitting the proposal, invoices 
          and cancelled checks the owner just stated (equivocally) that  it
          had "upon information  and  belief"  previously  submitted  them.
          Upon appeal the owner has not  provided  any  evidence  that  the
          documents were previously submitted and  has  in  fact  not  even
          contended that they were.  It has simply submitted them.  Because 
          the  owner  has  not  offered  any  justification  for  the  late
          submission of the documents, they are not accepted for the  first
          time on appeal.

          The owner did give the Administrator a copy of an  M.C.I.  order.
          The effect of  that  order  is  reflected  in  the  amended  rent
          calculation chart attached hereto and made a part  hereof.   That
          increase is the only lawful increase above the April 1, 1984 rent 
          until December 19, 1986 as the owner did not, in  the  proceeding
          before the Administrator, submit  any  evidence  of  a  right  to
          charge any other increases prior to the  December,  1986  vacancy
          lease.

          Regarding the owner's contention that treble damages  should  not
          be imposed, the Commissioner finds the Administrator to have been 
          warranted in deciding that the  owner  had  not  shown  that  the
          overcharges were not willful.

          Regarding the owner's contention that the December 19, 1986  rent
          of $850.00 is the initial legal regulated rent, the  Commissioner
          does not  consider  the  1986  registration  to  be  the  initial
          registration  since  the  renovations  did  not  create   a   new
          apartment that did not previously exist (such as, for example, by 
          changing its exterior dimensions).

          The owner is cautioned to adjust the rent, in leases after  those
          considered herein, to amounts no greater than that determined  by
          this order  plus  any  lawful  increases,  and  to  register  any
          adjusted rents with this order being given as the reason for  the
          adjustment.  Because of the possibility that  the  tenant  herein
          may have vacated by the time that this determination is issued, a 
          copy of this determination  s  being  mailed  to  the  tenant-in-
          occupancy.

          This order may, upon the expiration of the period  in  which  the
          owner may institute a proceedi g  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 owner.

          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 lawful stabilization rents and the amount of  overcharge  are
          established on the attached chart, which is fully made a part  of
          this order.  The total overcharge, including excess  security  of






          EL 210405-RO
          $393.35, is $11,013.80 as of February 14, 1988.



          ISSUED:

                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
    

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