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
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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
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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
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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.
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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
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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:
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JOSEPH A. D'AGOSTA
Deputy Commissioner
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