FD 210111 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




          ----------------------------------X 
          IN THE MATTER OF THE ADMINISTRATIVE S.J.R. 6102 (REMIT)
          APPEAL OF                           ADMINISTRATIVE REVIEW
                                              DOCKET NO.:  FD 210111-RO
                                                           (REFILING OF
                                                           FB 210057-RO)
                    ANDREW MARKIEWICZ,                      
                         
                                              DRO DOCKET NOS.: ZCB-210252-R
                                                                   
                                               TENANT: MAREK LAWNICZAK
                                 PETITIONER
          ----------------------------------X


           ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                      IN PART

          On January 31, 1991 the above named petitioner-owner filed a 
          Petition for Administrative Review (Docket No. FB 210057-RO) 
          against an order issued on December 31, 1990 by the Rent 
          Administrator,  92-31 Union Hall Street, Jamaica, New York 
          concerning housing accommodations known as Apartment 2R at 156 
          Guernsey Street, Brooklyn, New York wherein the Rent 
          Administrator determined that the owner had overcharged the 
          tenant.  On March 6, 1991 the petition was rejected on procedural 
          grounds.  When the petition was re-filed by the owner, it was 
          assigned Docket No. FD 210111-RO.  On September 24, 1991 the 
          petition was dismissed on procedural grounds.

          Subsequent thereto, the owner requested reconsideration, and also 
          filed a petition in Supreme Court pursuant to Article 78 of the 
          Civil Practice Law and Rules, requesting that the Administrator's 
          order be annulled.  The mater was remitted to the Division of 
          Housing and Community Renewal (DHCR), and is herein considered on 
          the merits, taking into account the contentions advanced by the 
          owner in his two petitions and his request for reconsideration.


          The issue in this appeal is whether the Rent Administrator's 
          order was warranted.

          The applicable sections of the Law are Section 26-516 of the 












          FD 210111 RO

          Rent Stabilization Law and Section 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, 1985 
          at a rent of $360.00 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 stated 
          that the prior tenant [who is stated by the 1984 registration to 
          have had a lease expiring December 1, 1984 at a rent of $310.00 
          per month] spent her last several months in occupancy, prior to 
          buying a house, as a month-to-month tenant; with no increase in 
          rent, despite the renovation of the bathroom prior to her 
          vacating, because of the inconvenience of living in the apartment 
          while the bathroom was being renovated.  The owner also stated 
          that the rent of the next tenant, the complainant, reflected only 
          part of the $57.50 increase that could have been charged based on 
          the renovation.

          On August 29, 1990 and September 26, 1990 the owner was requested 
          to submit, among other things:

Copies of cancelled checks (both front and back) and 
bills showing the cost and date the service was 
provided or equipment was installed for which 1/40th of 
the cost is claimed.  The receipts must show a 
breakdown of the costs of each item separately.  Where 
an installation was made while a tenant was in 
occupancy, submit his/her written consent as required 
by law.

          On October 24, 1990 the owner was sent a Final Notice that the 
          DHCR was proposing to issue an order finding an overcharge of 
          $9,237.00, including treble damages, based among other things 
          upon the owner's failure to register the subject apartment for 
          1985 and his failure to substantiate his claim for 1/40th of the 
          cost of improvements.  In his three submissions during the course 
          of the proceeding before the Administrator, the owner submitted 
          only an invoice from a contractor to support his claim of 
          expenditures for improvements.  While that invoice was for the 
          renovation of the bathroom several months before the complainant 
          commenced occupancy, the owner also indicated that he took a 
          $7.60 increase in the tenant's first renewal lease for a new 
          refrigerator and other items.







          FD 210111 RO

          In an order issued on December 31, 1990 the Rent Administrator 
          determined an overcharge of $9,237.00 as of December 1, 1988, 
          including treble damages, based upon disallowing an increase for 
          improvements, disallowing a vacancy allowance because of the 
          owner's failure to submit leases, and freezing the tenant's rent 
          because of the owner's failure to register the apartment for 
          1985.

          In this appeal (considering the request for reconsideration and 
          the petitions in Docket Nos. FB 210057-RO and FD 210111-RO) the 
          owner contends in substance that the subject apartment was 
          registered for 1985; that he renovated the bathroom at a cost of 
          $2,300.00 during the last part of the prior tenant's tenancy; 
          that there were extensive improvements (new fireplace, new 
          ceiling, new walls) done to the apartment prior to that time; 
          that the complainant's initial rent included $6.26 per month for 
          new linoleum; that these would have warranted charging the tenant 
          $600.00 rather than $360.00; that an owner should have the right 
          to delay charging a rent increase; and that there was indeed a 
          vacancy.  With his appeal the owner has enclosed a copy of the 
          1985 apartment registration, and of a Rent Stabilization 
          Association 1985 Rent Registration Worksheet, dated June 18, 
          1985, showing basically the same information listed on the 
          registration form.

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

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

          Although the DHCR computerized rent registration system does not 
          reflect the receipt and entry of a 1985 apartment registration, 
          the Commissioner considers that the owner had furnished 
          sufficient evidence of registration with the DHCR to warrant not 
          freezing the lawful rent at the amount in effect on March 31, 
          1985.  Because the owner did not furnish any cancelled checks for 
          the bathroom renovation, the allowable increase is limited to 
          1/40th of the $1,500.00 that the September 4, 1985 invoice stated 
          had been received on account, rather than the full amount of 
          $2,300.00 stated on the invoice.  This difference is of minimal 
          significance, however, since the owner did not even charge the 
          complainant the full increase of $37.50 ($1,500.00 divided by 40) 
          in his vacancy lease that would have been warranted by the 
          expenditure of $1,500.00 on new equipment and improvements.  It 
          has long been the policy of the DHCR and of its predecessor New 
          York City Conciliation and Appeals Board that rent increases are 
          waived if not charged.  While the Commissioner considers there to 
          be an acceptable exception where, as in the present case, an 
          increase was not charged a month-to-month tenant during the last 
          several months of her tenancy because of the inconvenience she 
          suffered by virtue of the bathroom being renovated while she 












          FD 210111 RO

          lived there, and where therefore the owner is allowed to charge 
          the increase in the complainant's vacancy lease, there is no 
          exception allowing the owner to charge any part of the increase 
          in later renewal leases that he did not charge in the 
          complainant's vacancy lease.  The owner also appears to have been 
          basing additional increases in the tenant's renewal leases on 
          additional expenditures for items such as a new refrigerator.  
          The owner has submitted no evidence to support his claim of other 
          new equipment and improvements, so no increase is allowed for 
          them.  However, since the failure of the tenant to deny such 
          improvements and new equipment may be taken as some indication 
          that they were actually installed, the owner's good faith 
          reliance on such expenditures as a basis for a rent increase is 
          sufficient to remove the overcharge from the realm of 
          willfulness, so interest rather than treble damages is imposed.  
          The Administrator was not warranted in disallowing a vacancy 
          increase for the tenant's initial lease beginning May 15, 1985, 
          since it is clear that it was indeed a vacancy lease.

          Taking the above factors into account, the Commissioner has 
          recalculated the lawful stabilization rents and the amount of 
          rent overcharge.  They are set forth on the amended rent 
          calculation chart attached hereto and made a part hereof.

          The owner is cautioned to adjust the rent, in leases after those 
          considered in this order, 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 is being 
          mailed to the tenant-in-occupancy.

          If the owner has already complied with the Administrator's order 
          and there are arrears due to the owner as a result of the present 
          determination, the owner is directed to allow the tenant to pay 
          off the arrears in twelve equal monthly installments.  Should the 
          tenant vacate after the issuance of this order, or have 
          previously vacated, said arrears shall be payable immediately.




          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  






          FD 210111 RO

          $17.37, is $399.51 as of November 30, 1988.                





          ISSUED:

          ------------------------
          JOSEPH A. D'AGOSTA
          Deputy Commissioner
           
             






    

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