FF 410141 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. FF 410141 RO
Solil Management Corp., DRO DOCKET NO. ZL003751R
TENANT: Rita Halley
PETITIONER
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ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE
REVIEW
On December 20, 1990, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
November 30, 1990, by the Rent Administrator, 92-31 Union Hall
Street, Jamaica, New York, concerning the housing accommodations
known as 145 East 16th Street, New York, New York, Apartment No.
8N, wherein the Rent Administrator determined that the tenant
had been overcharged in the amount of $6,541.72.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2522.4 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order was
warranted.
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 tenant originally commenced this proceeding on September 11,
1985 by filing a complaint of rent overcharge. The tenant
alleged in substance that 1) the owner had not provided a rent
history rider with the lease; 2) the owner had not provided
copies of bills for appliances installed prior to her taking
occupancy; 3) the owner had incorrectly incorporated the
appliance charge, $25.50, into the base rent.
The owner was served with a copy of the complaint and was
directed to submit a complete rent history. The owner was
advised that if it claimed a rent increase for the installation
of new equipment, it was required to submit invoices showing the
cost and date of installation.
In answer, the owner submitted a rental history from June 1, 1981
and invoices and cancelled checks which substantiated the cost of
three appliances installed in the subject apartment before the
tenant took occupancy.
In reply, the tenant asserted inter alia that absent her consent,
an appliance charge should not have been added to the rent.
In the order issued on November 30, 1990, the Administrator found
FF 410141 RO
that although the owner had substantiated the cost of the
appliances, the cost of new equipment installed during a vacancy
period must be added to the tenant's vacancy lease at the
beginning of that lease. Since the owner herein first began to
collect the appliance cost one month after the lease period
began, and the tenant had not given written consent, the
Administrator determined that the owner had improperly imposed
the appliance cost as rent and further determined that the owner
had collected an overcharge of $6,541.72 inclusive of excess
security and treble damages.
On appeal, the owner states that although the new appliances had
been installed during the vacancy period making tenant consent
unnecessary, it had delayed in charging for them because it was
uncertain of the exact amount to charge until after the
initiation of the lease term. The owner contends that the lease
provides for rent adjustments but the clause cited pertains to
adjustments made pursuant to rent guidelines. The owner also
asserts that assuming for the sake of argument, there was an
overcharge, the facts of the instant case do not support a
finding of wilfulness within the meaning of the Code section
which provides for treble damages.
In response, the tenant reiterated her belief that the owner had
wilfully overcharged and the Administrator's order should be
upheld.
The Commissioner is of the opinion that this petition should be
granted in part.
Section 2522.4(a)(1) of the Rent Stabilization Code authorizes a
rent increase for the installation of new equipment or
improvements "on written tenant consent to the rent increase. In
the case of vacant housing accommodations tenant consent shall
not be required." Subdivision (4) of this section provides that
the increase shall be 1/40th of the total cost including
installation and subdivision (5) states that the increase may be
collected "upon installation."
It is undisputed that new appliances were installed and that the
installation occurred prior to the complainant's occupancy and
while the apartment was vacant. Accordingly, the owner did not
need the tenant's consent for the installation and was entitled
to add 1/40th of the total cost to the vacancy rent. The owner
was not required to present the bills to the tenant to
substantiate the cost of the appliances. The amount charged was
subject to review only in the context of an overcharge
proceeding; when the tenant did file her complaint, the owner
submitted invoices and cancelled checks documenting an
expenditure of $1067.07 for appliances for which an increase of
$26.68 could have been charged if the owner had included a clause
in the tenant's vacancy lease advising the tenant of the
installation and that a rent increase would be taken when the
owner had determined the exact amount of such increase.
However, the owner failed to preserve, through the use of
appropriate language in the vacancy lease, its right to collect
the increase when the amounts were known. Accordingly, the owner
is deemed to have waived the rent increase based upon the
FF 410141 RO
installation of new equipment since the owner is limited to the
amount of rent listed in the vacancy lease. Therefore, the
Commissioner finds that the Administrator did not err in
determining that an overcharge had occurred. However, the
Commissioner finds that treble damages are not warranted since
the overcharge only resulted due to the owner's failure to list
improvements made in the tenant's vacancy lease. It is the
Commissioner's opinion that pursuant to Policy Statement 87-2,
the owner has shown that this overcharge was not willful.
Accordingly, the Commissioner has recalculated the overcharge to
include interest instead of treble damages:
10/1/84 - 8/31/85 $25.50 x 11 mos. + interest = $280.50
$145.16
$425.66
9/1/85 - 8/31/87 $27.79 x 24 mos. + interest = $666.96
$257.61
$924.57
9/1/87 - 8/31/89 $30.29 x 24 mos. + interest = $726.96
$149.94
$876.90
9/1/89 - 11/30/90 $33.01 x 15 mos. + interest = $495.15
$ 29.72
$524.87
Total overcharges through 11/30/90 = $2752.00
excess security 33.01
$2785.01
Based on the foregoing, a total overcharge of $2785.01 occurred
from October 1, 1984 to November 30, 1990 including interest on
the overcharge occurring on and after April 1, 1984 and excess
security.
Because this determination concerns lawful rents only through
November 30, 1990, the owner is cautioned to adjust subsequent
rents to an amount no greater than that determined by this order
plus any lawful increases.
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 per cent month
thereof may be off set against any rent thereafter due the owner.
THEREFORE, in accordance with the provisions of 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
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hereby is modified in accordance with this order and opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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