FA-210103-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.:
FA-210103-RO
JASMIN K. MARSHALL,
DRO DOCKET NO.:
PETITIONER BI 210276-R
----------------------------------x
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On January 4, 1991, the above named petitioner-owner filed a
Petition for Administrative Review against an order as issued on
November 30, 1990, by the District Rent Administrator concerning
housing accommodations known as Apartment 2-B at 2714 Avenue D,
Brooklyn, New York, wherein the Rent Administrator determined the
tenant had been overcharged in the amount of $8,164.51, including
treble damages for overcharges occurring since April 1, 1984.
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 of a rent
overcharge complaint by the tenant on September 1, 1987.
The tenant took occupancy pursuant to a one-year lease com-
mencing on April 13, 1987, and expiring April 13, 1988, at a
monthly rent of $450.00.
The owner was served with a copy of the complaint and was
directed to submit a complete rent history from the base date,
including copies of all leases. The owner complied with this
request.
The owner was then requested to submit an itemized breakdown of
the costs of new equipment and renovations to the subject-
apartment that were ordered immediately prior to the tenancy
commencing on May 1, 1986.
The owner submitted a letter from the contractor in which the
total cost of $3,500.00 was broken down as follows:
- Replace falling ceiling and walls
in bedroom and living room = $ 900.00
- Replace kitchen cabinets = $ 725.00
- Replace bathroom sink and toilet = $ 575.00
- Repair leaking cold water pipes
in bathroom = $ 475.00
- Remove and replace defective gas
pipes from kitchen and install
new gas line = $ 825.00
Total $ 3,500.00
========
In Order No. BI 210276-R, issued on November 30, 1990, the
District Rent Administrator determined that the tenant had been
overcharged in the amount of $8,164.51, including treble damages
for overcharges since April 1, 1984 and $535.39 in excess
security as based on the improper collection of two month's
security deposit. The order stated that the entire claimed cost
of the new equipment was disallowed because the owner had failed
to submit an itemized breakdown. The Administrator also
determined that since the owner had failed to register the
subject-premises in 1988, the owner was thereby barred from
collecting any Rent Guidelines increases above the March 31, 1988
lawful rent, in accordance with Section 2528.4 of the current
Rent Stabilization Code.
In its petition, dated January 4, 1991, the owner contends that
the Administrator improperly ignored the itemized breakdown that
the owner had submitted in response to the request for that doc-
umentation.
The Commissioner is of the opinion that this petition should be
granted in part and that the Administrator's order be modified.
Section 2522.4(a)(1) of the current Rent Stabilization Code
provides, in part that:
An owner is entitled to a rent increase where there has
been a substantial increase of dwelling space or an
increase in the services, or installation of new
equipment or improvements, or new furniture or
furnishings,
provided in or to the tenant's housing accommodation.
An owner may not, however, collect a rent increase for
work that constitutes normal decorating, painting or
repairs.
The record is this case establishes that, in response to the
Administrator's request for an itemized breakdown of the total
cost of new equipment, the owner submitted a letter from the
contractor in which the cost of each item was specified. Although
it was not specific enough to accurately determine the cost of
one item - namely the bathroom sink - the Administrator had
sufficient documentation with which to justify at least a partial
grant of the claim. The matter was simple in the case of the
kitchen cabinet, which can be fully credited. It is also clear
that the repairs of the ceiling and walls, the cold water pipes
and the gas pipes are disallowed as merely normal mainten-ance
and repairs. However, the claim for the bathroom sink and toilet
is problematical, since only the sink is considered new equipment
for which a rent increase is allowed, while a toilet in good
condition is an essential service that must be provided by the
owner (Accord: ART 01487-L). Since both items are insepar-ably
linked to a single cost of $575.00, the exact cost of the sink is
unknown. In such cases where the completion of the work and
documented cost is not challenged, the Commissioner has relied on
an "equitable solution" whereby a portion of the cost is
attributed to the equipment or work that is acceptable under the
Code, and the remainder is discounted (Accord: CH 510027-RO). By
allowing half of the $575.00 cost of the bathroom items, the
total allowable claim is as follows:
Kitchen cabinets $ 725.00 divided by 40 = $ 18.12
Bathroom sink 1/2 $ 575.00 " " 40 = $ 7.19
New Equipment $ 25.31
Furthermore, the Commissioner recognizes, in accordance with
previous Opinions on the issue, that where an overcharge results
from an owner's failure to adequately substantiate improvements
(as claimed under Section 20C(1) of the former Rent Stabilization
Code and Section 2522.4 of the current Code), but where there is
sufficient evidence to show that the owner believed in good faith
that it could increase the rent by the entire cost, the DHCR will
not consider the overcharge willful (Accord: DHCR Administrative
Review Docket Numbers ARL 01921-L, ARL 02037-K, ARL 03737-K). It
is also noted that the total amount of overcharges derives from
such a claim. Therefore, as the record supports the owner's good
faith reliance upon that claim, treble damages will not be
imposed. A recomputation of the lawful rent thereby reduces total
over-charges to $1,541.79, as is documented on the rent
calculations chart affixed hereto and made a part hereof.
This order may, upon the expiration of the period in which the
owner may institute a proceeding 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.
If the owner has already complied with the Administrator's order
and there are arrears due to the owner as a result of the instant
determination, the tenant may pay off the arrears in twelve (12)
equal monthly installments. Should the tenant vacate after the
issuance of this order, said arrears shall be payable
immediately.
THEREFORE, pursuant to the Rent Stabilization Law and Code, it is
ORDERED, that the petition be, and the same hereby is granted in
part, and that the Administrators order be, and the same hereby
is amended in accordance with this order and opinion.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
|
