FE 510017-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     S.J.R. 5928
IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW
APPEAL OF                               DOCKET NO.:
                                        FE 510017-RO
       189 SHERMAN ASSOCIATES,          DISTRICT RENT
                                        ADMINISTRATOR'S DOCKET
                                        NO.:
                        PETITIONER      CE 510107-R
----------------------------------x     TENANT: WINSTON TINSON


  ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
 IN PART AND REMANDING THE PROCEEDING TO THE RENT ADMINISTRATOR
                                
                                
On  April  21,  1991,  the above-named petitioner-owner  filed  a
Petition  for  Administrative Review against an order  issued  on
April  5, 1991, by a Rent Administrator concerning housing accom-
modations known as Apartment 5-F at 211 Sherman Avenue, New York,
New  York, wherein the District Administrator determined that the
tenant  had  been  overcharged in the amount of  $36,073.99,  in-
cluding excess security and treble damages.

Subsequent  thereto,  the  petitioner filed  a  petition  in  the
Supreme  Court pursuant to Article 78 of the Civil  Practice  Law
and  Rules requesting that the "deemed denial" of its Administra-
tive appeal be annulled.

On  October  17,  1991, an order was signed by Justice  Santaella
remitting  the  proceeding  to the Division  for  an  expeditious
determination of the owner's administrative appeal.

The  Commissioner has reviewed all of the evidence in the  record
and  has carefully considered that portion of the record relevant
to the issues raised by the administrative appeal.

This  proceeding was commenced by the filing of a rent overcharge
complaint by the tenant on April 4, 1988.

The  tenant stated that he took occupancy pursuant to a  one-year
lease  commencing  February 9, 1988, and  expiring  February  28,
1989, at a monthly rent of $629.88, and contended that this  rent
was excessive for a three-room apartment.

The complaint also alleged that the only repairs completed at the
time of the tenant's occupancy were the painting of the apartment
and the installation of a new sink.

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  submitted a letter and a one page proposal  from  the
general contractor who had been retained to make improvements  to
the  subject-apartment  in the amount of $12,500.00.   The  docu-
ments refer to a "substantial renovation of apartment," but  list
only  broad categories of expenditures.  The owner also submitted
the  one-year  lease  of  the prior tenant  documenting  rent  of
$346.72 for the period from September 1, 1986 through August  31,
1987.

In  a  letter  to  the DHCR dated October 15,  1988,  the  tenant
alleged  that the prior tenant paid much less rent  and  that  he
wanted to know how it could have been increased to $629.88.   The
tenant also stated that his rent had not yet been reduced, as was
directed  in  a DHCR order under Docket No. CF 530022-B,  finding
reduced  building-wide services, dated September 30, 1988,  which
was retroactive to July 1, 1988.

On  July  6, 1989, the DHCR issued an order under Docket  No.  CE
510110-S finding reduced apartment services, and directing a rent
reduction effective June 1, 1988.

On  January  3, 1991, in response to the Administrator's  request
for  proof  of registration for 1987 and 1988, the owner  replied
that  such  proof  was being sent separately.  Additionally,  the
owner disputed the tenant's challenge to the claimed cost of  the
apartment  improvements.  Subsequently, on February 6, 1991,  the
owner  submitted copies of the 1987 and 1988 registrations.   The
owner  also  submitted  a  copy of  the  check  for  the  claimed
improvements in the amount of $12,500.00, dated June 28, 1988.

In  a notice to the owner dated March 15, 1991, the Administrator
stated  that a determination of actual overcharges had been  made
in  the  amount  of  $9,520.56, and that the  owner  was  thereby
afforded  an opportunity to rebut the finding that the overcharge
was  willful  and thus avoid the penalty of treble damages.   The
notice  also  stated that the owner had failed  to  register  the
subject apartment in 1987 and 1988, thus freezing the rent at the
amount on March 31, 1987.

Responding  to the notice in a letter dated March 26,  1991,  the
owner contended that, contrary to the Administrator's notice, the
owner had properly registered in 1987 and 1988, and that proof of
registration  was  enclosed.  Additionally, the owner  questioned
the  omission  of  the $12,500.00 claim for installed  equipment,
which  was completely ignored in the notice, and resubmitted  the
same  documentation regarding that claim that had been previously
submitted.   Finally, the owner enclosed a letter signed  by  the
tenant on February 28, 1991 wherein the tenant agreed to withdraw
"any  and all complaints with all city agencies", with prejudice,
in  exchange for the owner's installation of a new entrance  door
to  the apartment.  This letter specified the withdrawal of three
docket  numbers,  of which the one concerning  the  instant  pro-
ceeding was not included.

In   Order  No.  CE  510107-R  dated  April  5,  1991,  the  Rent
Administrator determined that the tenant had been overcharged  in
the  amount  of $36,073.99, including excess security and  treble
damages.   It was determined that the owner's failure to register
in  1987  and 1988 precluded the collection of any rent  increase
prior  to the most recent lawful registered rent, which was found
to  be  $296.69  (4% guidelines increase over initial  registered
rent  in  1984 of $285.28).  It was also found that  the  owner's
failure to submit leases prior to September 1, 1986 precluded his
eligibility for vacancy and supplemental allowances, and that the
owner  had  failed  to  substantiate the  cost  of  improvements,
resulting  in  the denial of that entire claim.  The  order  also
noted  the two aforementioned service reduction orders but deter-
mined no additional overcharges therefrom.

In its petition, dated April 22, 1991 the owner contends that the
DHCR  must  annul the order because the tenant had withdrawn  his
complaint as one of the "any and all" complaints referred  to  by
the  tenant in his letter of withdrawal, dated February 28, 1991.
The  petition cited several Commissioner's opinions as precedent.
The  petition  also objects to the omission of  the  vacancy  and
supplemental  allowances  for the lease commencing  September  1,
1986, stating that the 1984 registration statement was sufficient
to  establish the prior tenancy and lawful rent, and  that  there
was thus no need for prior leases.  The petition then objects  to
the finding that the owner did not register the apartment in 1987
and  1988, and encloses as documentation copies of affidavits  of
mailing   for  those  years  from  the  director  of   the   Rent
Stabilization Association and postal receipts of bulk delivery of
mail to the tenants.  Additionally, petitioner contends that  the
improvements  made  to  the apartment were  so  extensive  as  to
constitute a "gut renovation", for which proof of the exact  cost
of each item is often impossible.

The  petition cites as precedent an opinion in which it was noted
that the costs of "gut renovations" of that type cannot always be
broken down because the contractor often agrees to one price  for
the  total  job.   Petitioner claims  that  this  also  disproves
willfulness,  which  is  why  the  treble  damages  penalty   was
improper.

In  his answer, dated May 25, 1991 the tenant denies that he ever
withdrew  his  overcharge complaint.  He contends  that  he  only
signed  the withdrawal statement because the superintendent  said
he  could not have the front door replaced unless he withdrew his
complaints of service violations.  However, the tenant notes that
this  did not include the overcharge complaint, which is why  the
docket  number  is not on the withdrawal statement.   The  tenant
also denies knowledge of repairs and construction claimed by  the
owner.

In  a  response dated July 10, 1991 the owner maintains that  the
fact  that  the  specific  docket number  was  omitted  from  the
withdrawal letter does not mean that the tenant did not  want  to
withdraw it.

The  Commissioner is of the opinion that this petition should  be
granted in part and the proceeding should be remanded to the Rent
Administrator for further investigation.

The  tenant's  signed statement of withdrawal  of  "any  and  all
complaints"  is void.  Pursuant to Section 2520.13  of  the  Rent
Stabilization Code, any negotiated settlement of a complaint must
be  approved  by  the  DHCR or a court of competent  jurisdiction
where   the  tenant  is  represented  by  counsel.   Since  these
conditions  were not met, the tenant retains the full  protection
of the Code.

The record contains conflicting evidence regarding the extent and
nature of the renovations, particularly as to what portion of the
work,  if any, qualifies for a rent increase pursuant to  Section
2522.4(a)  of the Rent Stabilization Code.  Although  the  tenant
initialed  the  lease rider next to the words "apt.  renov",  the
complaint alleges that the only work actually completed  was  the
painting  of the apartment and installation of a new  sink.   The
tenant  reaffirms  this in his answer to the  petition,  claiming
that  he  had  "no knowledge of repairs or construction"  by  the
owner.   The  situation  differs from the one  in  Mautner-Glick,
Docket  No. BC 410344-RO, cited by the owner, in that the  record
in  that case established that there had been a complete or "gut"
renovation of the apartment, which the Commissioner


acknowledged was more difficult to itemize by cost.  The  opinion
dealt at length with the owner's difficulty in establishing  such
proof.   But  in  the  instant case,  the  tenant  denies  actual
knowledge  of the improvements, in addition to questioning  their
cost.   Significantly, the work proposal is  dated  February  16,
1988, just three days before the signing of the lease.  The  fact
that the tenant is unable to corroborate most of the work on  the
proposal  -  which  was not even paid for until  June  28,  1988,
nearly  four months after the tenant moved in - raises  questions
as  to the legitimacy of the claim which were not at issue in the
Mautner  case.  Moreover, the contractor in Mautner made repeated
submissions  of  its  work records in response  to  the  Adminis-
trator's  requests  for  documentation.  In  the  instant   case,
however, the owner only resubmitted the same proposal which -  in
its breakdown into only three categories of rewiring, resurfacing
of  walls and upgrading the kitchen and bathroom - fails to  sub-
stantiate the kind of "gut renovation" that relieved the owner in
Mautner  from  the  specificity requirements that  are  otherwise
absolute  with Section 2522.4(a) of the Rent Stabilization  Code.
On  remand,  an  investigation to establish the  amount  of  work
actually  completed - including, if necessary, an  inspection  of
the  subject-apartment - shall be conducted.   The  owner  should
also  be  afforded an opportunity to more fully itemize the  work
that  qualifies for a rent increase.  Such determinations  cannot
be made from an evaluation of the record as it now stands.

Section  2528.3 of the Rent Stabilization Code, regarding  annual
registration requirements, provides:

In  such  manner and at such time as shall be determined  by  the
DHCR pursuant to Section 2527.11 of this Title (Advisory Opinions
and Operational Bulletins):

          (a)An   annual   registration   shall   be   filed
          containing  the  current  rent  for  each  housing
          accommodation    not    otherwise    exempt,     a
          certification   of  services,   and   such   other
          information  as  may  be  required  by  the   DHCR
          pursuant to the RSL.
          
          (b)Upon  filing an annual registration, the  owner
          shall provide each tenant then in occupancy with a
          copy  of  that portion of such annual registration
          applicable to the tenant's housing accommodation.
          
Section 2528.4 specifies the penalty for failure to register:

The  failure  to properly and timely comply with the  initial  or
annual  rent  registration as required by this Part shall,  until
such  time  as such registration is completed, bar an owner  from
applying for or collecting any rent in excess of:

          (a)If no initial registration has taken place, the
          legal  regulated rent in effect on the  date  that
          the  housing accommodation became subject  to  the
          registration requirements of this Part; or
          
          (b)The  legal  regulated rent in effect  on  April
          first of the year for which an annual registration
          was  required to be filed, or such other  date  of
          that  year  as  may  be  determined  by  the  DHCR
          pursuant  to  Section 2528.3 of this Part  (Annual
          Registration Requirements).
          
The  late  filing of a registration shall result in the  elimina-
tion, prospectively of such penalty.

Although   the   Administrator  concluded  that  no  registration
statements were filed for the subject-apartment in 1987 and 1988,
the  owner  submits  affidavits and computer generated  apartment
lists  from the Rent Stabilization Association (RSA) as  well  as
postal receipts which establish that service of the registrations
for  those years was made on all rent stabilized tenants.  It  is
noted  that  the  Commissioner  has  accepted  the  RSA  computer
printout  mailing  lists  as proof of service  of  the  apartment
registration  on  the  tenant (Accord: AI  410034-RT).   However,
there  is  no  evidence  in  the record  to  establish  that  the
registrations were filed with DHCR as required by Section  2528.3
of  the  Code.   Since  the owner was not advised  that  the  RSA
affidavit  was  not adequate proof of filing with DHCR,  and  the
record  does not show that the Administrator conducted a thorough
search  of DHCR records, the Commissioner is of the opinion  that
the proceeding should be remanded to the Rent Administrator for a
full investigation of this question.  On remand, the owner should
be afforded an opportunity to submit proof that the registrations
were  filed.  If  the RSA provided this service  such  proof  may
include  relevant computer records of the RSA for  the  years  in
question, or supplementary affidavits from RSA employees.

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 of remanding this proceeding to the District  Rent
Administrator  for  further processing in  accordance  with  this
order and opinion.  The automatic stay of so much of the District
Rent  Administrator's  order  as  directed  a  refund  is  hereby
continued until a new order is issued upon remand.  However,  the
Administrator's determination as to the rent is  not  stayed  and
shall  remain in effect, except for any adjustments  pursuant  to
lease  renewals, until the Administrator issues a new Order  upon
remand.

ISSUED:


ELLIOT SANDER
                                         Deputy Commissioner
    

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