FD 410318 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 :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. FD 410318 RO

                                          :  DISTRICT RENT OFFICE
           Trafalgar Properties, Inc.,       DOCKET NO. BA 410624 R
                                             
                                             TENANT: Joanne Tolassi           
                

                               PETITIONER : 
      ------------------------------------X                             

          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                     IN PART


      On April 29, 1991, the above-named owner timely refiled a Petition for 
      Administrative Review against an order issued by a Rent Administrator on  
      August 24, 1990, concerning the housing accommodations known as 105 East 
      2nd Street, Apt E, New York, New York, wherein the Administrator found 
      that the owner had overcharged the tenant.

      The Administrative Appeal is being determined pursuant to Sections 
      2522.4 and 2526.1 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.

      The proceeding originated with the tenant's overcharge complaint of 
      February 12, 1987.  In answering same the owner stated that during the 
      vacancy before the complainant's occupancy, the apartment had been 
      substantially altered and comprehensively rehabilitated at a cost of 
      over $14,000, such rehabilitation having included new walls and a new 
      bathroom, inter alia.  The owner included a listing of the contractors 
      employed and the "work performed" by each, to wit: "Ayala, Reno Prep," 
      "Best, Appliances," "Dukovny, Kitchen lino," "Gifford, Dynavent," 
      "Johnson, Debris removal," "Marshall, Electrics," Menzies, GC" and 
      "Uiberall, Plumbing."  The owner also submitted copies of proposals, 
      bills and contracts, and cancelled and endorsed checks, to document the 
      above; among those was an unsigned memorandum ("contract" herein) headed 
      "Simon Menzies," describing the work as "general contracting services" 
      and stating: that the payments would be made throughout 1985 as funds 
      became available; that Menzies was permitted to authorize contractors to 
      bill the owner directly; and that Menzies understood that the apartment 












          FD 410318 RO

      was to be rented as of February 1, 1985, and would schedule the work 
      accordingly.  The contract was accompanied by documentation of $8400 
      paid to Menzies, in eleven installments from February 1 to August 16, 
      1985.

      In replying to the owner's answer, the tenant stated inter alia: "Also 
      noted is the workmanship, and subsequent price of renovations seem 
      dubious at best to present tenants."

      The aforementioned Administrator's order followed.  It allowed a vacancy 
      increase equal to 1/40 of the cost of the aforementioned vacancy 
      improvements, less the $8400 paid to Menzies, citing an absence of proof 
      as to what the latter fee was for and whether it was necessary.  From 
      the overcharge calculation made in that order, the owner now appeals.

      In this petition, the owner alleges in substance: that the 
      Administrator's aforementioned refusal to include the $8400 paid to Mr. 
      Menzies in calculating the vacancy-improvement increase was incorrect; 
      that the Administrator should have realized that "standard general 
      contracting services" were to be provided, employment of a general 
      contractor being common in construction projects; that supervision of 
      the entire project is necessary where, as here, there are seven other 
      contractors involved; that the Administrator could have had his doubts 
      resolved as to the need for such services by requesting additional 
      information to clarify same; that Mr. Menzies had procured the sub- 
      contractors; and that in addition to coordinating the work of others, 
      Menzies had removed and rebuilt all interior walls and completely 
      renovated the bathroom.  

      In an accompanying affidavit Mr. Menzies (a) sets forth his duties as 
      general contractor, (b) states that he also had to provide any 
      renovation work not performed by the subcontractors, (c) sets forth the 
      details of the aforementioned wall and bathroom work (including inter 
      alia the installation of new bathroom fixtures), and (d) evaluates the 
      wall work at $2100 and the bathroom work at $4200.

      On October 29, 1990, the tenant responded to the initial filing of this 
      petition, stating (1) that the work in question was purportedly done 
      after the date of the tenant's occupancy, and that that was simply not 
      true and (2) that any work performed prior to the tenant's occupancy was 
      highly overpriced, according to "two independent contractors" consulted 
      by the tenant, and as exemplified by "gaping holes" left in the tenant's 
      floor inter alia and (3) that the Administrator had awarded the tenant 
      an insufficient amount for "excess security" in view of what she had 
      paid to a broker "in my landlord's employ."

      Petitioner's reply of November 1990 states: that the work was clearly 
      performed before the tenant took occupancy; that lower estimates that a 
      tenant may submit may not be considered in determining the validity of 
      an owner's bills for improvements; and that the owner is not responsible 
      for the broker's fee arrangement herein.  (The reply does not address 
      the tenant's allegation of holes left after the wall work).






          FD 410318 RO


      Since the refiling of this petition, the tenant has written the 
      Commissioner as follows.  (a) Only one wall was removed, "for which 
      there is still necessary floor work."  Inspection of the apartment and 
      comparison with "other 'unrenovated' apartments in the building" will 
      corroborate this.  (b) The bathroom sink has twice fallen off the wall.  

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

      The sole issue is whether the owner should receive credit for the 
      additional $8400, during the vacancy before the tenant's occupancy, that 
      was paid to Menzies.  (The tenant's argument concerning excess security 
      cannot be considered here because the tenant failed to appeal that 
      determination by means of her own petition.)

      As summarized earlier, petitioner presents two separate arguments 
      corresponding to the two components of the Menzies bill.  The first is 
      that if the Administrator failed to realize, from "the context of the 
      documents" the owner had submitted, that the "common practice" of 
      employing someone to provide "standard general contracting services" was 
      referred to in those documents, he should at least have sought 
      clarification of the "general contractor" references through a request 
      for further information.  The other argument pertains not to supervisory 
      or coordinating services, but to the aforementioned wall and bathroom 
      jobs.  "Upon information and belief," the petition states, "the 
      complainant is aware of these improvements and will not deny they were 
      done." 

      For the reasons set forth below, the Commissioner will increase the rent 
      based on partial recognition of Menzies' "general" services, but not for 
      any renovation done by him directly.

      The Menzies contract describes the work as "general contracting 
      services," adding that Menzies "is permitted to authorize contractors to 
      bill [the owner] directly."  The Commissioner agrees that the number of 
      contractors involved, and the clear implication in the last-quoted 
      clause that Menzies had authority over them, put the Administrator on 
      notice to enquire as to the meaning of "general contracting services" in 
      this contract.  Because he did not so inquire, the Commissioner will 
      consider for that purpose, Menzies' affidavit accompanying the instant 
      petition, which states in pertinent part that his duties were to 
      "supervise the entire renovation project by correlating the efforts of 
      the various specialist subcontractors."  That description is sufficient 
      to render erroneous the total exclusion of moneys spent thereon from the 
      Administrator's calculation of the compensable vacancy improvement.
      There was no evidence before the Administrator, on the other hand, to 
      indicate that walls had been replaced or the bathroom renovated.  (A 
      submission by the owner's counsel mentioned those items, but not one 
      contract, bill or check corroborated that assertion.)  And unlike the 
      supervision referred to above, those specific jobs are not implied by 
      the term "general contracting."  With no evidence before the 












          FD 410318 RO

      Administrator, petitioner's instant claim and the affidavit pertaining 
      thereto come too late for the Commissioner's consideration, since this 
      is not a de novo proceeding and the owner has not given a reasonable 
      explanation for failing to include these items in the proceeding before 
      the Rent Administrator.

      The remaining question concerns the amount the owner reasonably paid for 
      Menzies' coordination of the other contractors' work.  In determining 
      that amount the Commissioner is assuming, contrary to what the petition 
      states, that Menzies did not procure the others' services, and did not 
      supervise those of the contractor Ayala.  

      Each contract, bill and check in the record is between the owner and the 
      contractor responsible for a specific job (e.g., Marshall for electrical 
      work).  The clause in Menzies' contract allowing the latter to permit 
      contractors to bill the owner directly did not, without more, establish 
      before the Administrator that Menzies had procured their services.  (The 
      Commissioner would add that Menzies' aforementioned affidavit, detailing 
      his responsibilities as a general contractor, makes no mention of such 
      procurement.)

      As to Ayala, the contract with the owner provides only that he will, "on 
      Christmas Day," remove old appliances and other debris "for contracting 
      work to begin December 26, 1984."  The record thus provides no basis to 
      conclude that any intermediary supervised Ayala's work, or that there 
      was any need to "coordinate" same with other projects that had yet to 
      begin.

      We are left with a fee for coordinating the work of six subcontractors, 
      who were paid a total of $5386.15.  In the Commissioner's opinion, ten 
      percent of the cost of the job supervised is a reasonable fee for such 
      duties.  An additional $538.62 has therefore been allowed -- in the 
      calculation chart appended to this order and opinion and hereby 
      incorporated therein -- for renovations and improvements under the lease 
      commencing February 1, 1985.

      The Administrator's determination, in sum, will be disturbed only by the 
      addition of that $538.62.  The remainder of the $8400 that petitioner 
      seeks to be added was not substantiated before the Administrator.  

      The Commissioner notes that although the Administrator's order was 
      issued on August 24, 1990, the overcharge calculation therein stops at 
      September 30, 1989.  The Commissioner will not here extend that period 
      of overcharge computation.  Interest, however, is calculated herein 
      through the date of the Administrator's order.  Because of that and 
      because of intervening corrective changes in the way the Commissioner 
      calculates interest, the total refundable overcharge herein is higher 
      than that determined by the Administrator, despite the fact that the 
      Commissioner has lowered the monthly overcharge as to each lease under 
      consideration.

      Because this determination concerns lawful rents only through August 24, 






          FD 410318 RO

      1990, the owner is cautioned to adjust subsequent rents to an amount no 
      greater than that determined by this order plus any lawful increases, 
      and to register any adjusted rents with this order and opinion being 
      given as the explanation for the adjustment.

      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 in the same manner as a judgment, or 
      not in excess of twenty percent per month thereof 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 to the 
      extent set forth above.  The lawful rent was $881.42 per month as of the 
      date of the Administrator's order; the total overcharge through 
      September 30, 1989, plus "excess security" and interest through the date 
      of said order, is $18,803.10.


      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner




                 
































          FD 410318 RO











    

External links are for convenience and informational purposes, and in some cases, might be sponsored
content. TenantNet does not necessarily endorse or approve of any content on any external site.

TenantNet Home | TenantNet Forum | New York Tenant Information
DHCR Information | DHCR Decisions | Housing Court Decisions | New York Rent Laws
Disclaimer | Privacy Policy | Contact Us

Subscribe to our Mailing List!
Your Email      Full Name