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
                                
                                
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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
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  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
    

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