FB110100RO
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. FB110100RO
: DISTRICT RENT OFFICE
Angelo Casabianca, DOCKET NO. AA100952R
TENANT: Darryl Pellegrini
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On February 27, 1991, the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on February 4, 1991,
by the Rent Administrator, 92-31 Union Hall Street, Jamaica, New York,
concerning the housing accommodations known as 24-15 41st Street,
Astoria, New York, Apartment No. 1F, wherein the Administrator
determined that the owner had overcharged the tenant.
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 commenced this proceeding on January 29, 1986 by filing a
complaint of rent overcharge in which he stated that he had not been
served with a copy of the apartment registration form.
In response to the tenant's complaint, the owner stated that the rent
being charged reflected the rent of the previous tenant plus appropriate
guidelines increases and improvements made to the subject apartment
while it was vacant at a cost of $5000.00.
Subsequently, the owner was requested to submit proof of service of the
April 1, 1984 Apartment Registration (RR-1 Form) on the tenant of record
on that date. The owner was notified that if he were unable to submit
such proof, he was required to submit a complete rental history from
April 1, 1980. Additionally, the owner was requested to submit bills
and cancelled checks for the claimed improvements.
In response, the owner asserted that the prior tenant had resided in the
subject apartment for eight years but that, at the tenant's request,
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there had not been a written lease. The owner submitted invoices for
various kitchen improvements totalling $3,713.19.
The tenant asserted that the owner was not in compliance with the law in
that he was not providing all required services and that, as a result of
the overcharge complaint, the owner had begun harassing the tenant.
In the order here under review, based upon the owner's failure to submit
either proof of service of the RR-1 or a complete rental history, the
Administrator set the lawful stabilization rent at $396.48 by use of
approved default procedures and froze the rent until the subject
apartment was properly registered. The owner was directed to refund an
overcharge of $8,345.40 inclusive of treble damages and excess security
through October 31, 1988 when the tenant vacated the subject apartment.
In his appeal, the owner states that the RR-1 was served on the
complainant on August 2, 1988 and contends that the Administrator's
order should be modified to reflect the following:
1. Improvements made to the kitchen and bathroom at a cost of
more than $2400.00;
2. A Major Capital Improvement (MCI) rent increase of 5.13%
effective April 1, 1987 and MCI temporary increase of 4.70
percent effective from April 1, 1987 to March 31, 1988;
3. There were two co-tenants and therefore the refund should be
divided between the two.
Finally, the owner contends that any overcharge which may have been
collected was not willful and that treble damages should not be imposed.
The tenant contends that the appeal should be denied:
1. The overcharge was willful.
2. The owner did not make the claimed improvements; service
problems in the kitchen and bathroom indicate that neither
room was new at the time he took occupancy; the bills
submitted by the owner could be fabrications; members of the
owner's family are in the construction business; the prices
seem highly inflated;
3. His roommate lived in the subject apartment for only one year
and returned to the Midwest due to harassment by the owner.
The tenant requests that the refund be recalculated to correct an error
in the computation of the refund which multiplied the overcharge
collected by ten (10) months instead of twenty-two (22) months for the
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period January 1, 1987 - October 31, 1988.
The Commissioner is of the opinion that this petition should be denied.
Section 2522.4(a) of the Rent Stabilization Code provides, in pertinent
part, that where there has been an installation of new equipment or
improvements in a particular dwelling unit, the monthly stabilization
rent shall be increased by 1/40th of the total cost of such equipment or
improvements upon written consent of the tenant. Consent of the tenant
is not required for equipment or improvements installed when the
dwelling unit is vacant. In the event of a tenant challenge to the
rent, an owner is required to submit documentary evidence in the form of
invoices which provide an itemized breakdown of the improvements and
specify the apartment and cost as well as cancelled checks or other
evidence of payment.
Review of the record reveals that the owner made inconsistent statements
regarding the total cost of the alleged improvements; the stated amounts
ranged from $2000.00 to $5000.00. The invoices submitted by the owner
fail to meet criteria established by the DHCR, i.e. the specific
apartment is not stated. Two are stamped paid (these two also specify
the apartment) but both are invoices for the same item, purchased on two
different dates, January 20, 1983 and September 30, 1984, at two
different prices. No cancelled checks were submitted; the owner stated
that he paid cash.
In view of the tenant's denial that improvements were made and the
failure of the owner's documentation, the Commissioner finds that the
Administrator correctly excluded a rent increase for improvements.
The Commissioner notes that the owner herein was granted a rent increase
for a Major Capital Improvement (MCI) effective April 1, 1987. However,
having failed to prove that the initial registration was properly
effected, the owner is barred by Section 2528.4 of the Rent
Stabilization Code from applying for or collecting any rent in excess of
the legal regulated rent in effect on the date the housing accommodation
became subject to the registration rquirements. The late filing of a
registration shall result in the elimination, prospectively of such
penalty.
Although the owner submitted a copy of the 1984 Apartment Registration
and proof of service of same in August 1988 with his appeal, this
evidence was not submitted for consideration by the Administrator before
the issuance of its order and cannot be considered de novo in this
appeal. However such evidence can be used to establish that the 1984
rent was properly registered as to future tenants of the subject
apartment. (The tenant herein vacated in October 1988).
With regard to the issue of treble damages, Section 2526.1 of the Rent
Stabilization Code provides, in pertinent part, for the assessment of
treble damages in all cases of willful overcharge. All overcharges are
presumed by statute to be willful unless the owner proves by a
FB110100RO
preponderance of the evidence that the overcharge was not willful.
Because the owner has not satisfied his burden, the Commissioner
sustains the finding of willfulness and the consequent imposition of
treble damages.
The evidence of record indicates that the co-complainant (Joanne Riza)
was a signatory to only one lease, commencing January 1, 1985 and
terminating December 31, 1985, and resided in the subject apartment
since November 1, 1984. Accordingly, she is entitled to a potion of the
refund, one-half of the amount due for the fourteen month period which
covers her actual tenancy or $1123.92. The tenant (Darryl Pellegrini)
is entitled to the remaining refund due.
Since the tenant did not file his own appeal, it would be inappropriate
to consider his request with respect to the overcharges ordered to be
refunded.
The owner is directed to tender to the tenant herein a check for the
full amount of the overcharge and penalties, $8,345.40, as determined by
the Administrator upon presentation by the tenant to the owner of a
written instrument in proper form duly executed by the other tenant
releasing the owner from any further liability for such refund.
The owner is directed to reflect the findings and determinations made in
this order on all future registration statements, including those for
the current year if not already filed, citing this order as the basis
for the change. Registration statements already on file, however,
should not be amended to reflect the findings and determinations made in
this order. The owner is further directed to adjust subsequent rents to
an amount no greater than that determined by this order plus any lawful
increases.
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,
the order may be filed and enforced in the same manner as a judgment.
A copy of this order is being sent to the current occupant of the
subject apartment.
THEREFORE, in accordance with the provisions of the Rent Stabilization
Law and Code, it is
ORDERED, that this petition for administrative review be, and the same
hereby is, denied, and, that the order of the Rent Administrator be, and
the same hereby is, affirmed as modified herein.
ISSUED:
FB110100RO
JOSEPH A. D'AGOSTA
Deputy Commissioner
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