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 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
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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,
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
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
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-
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
$393.35, is $11,013.80 as of February 14, 1988.