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. NO.: 6462 (DEEMED DENIAL)
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NOS.: FK 410213-RO
                                          :               FK 410249-RO
         JONATHAN WOODNER CO.,                                   
                                             RENT ADMINISTRATOR'S
                            PETITIONER    :  DOCKET NO.: ZDD-410188-R
      ------------------------------------X              ZDI-410275-R   
                                             
                                             Tenants: Allan & Gail Abramowitz
                                             Subsequent Tenant: Richard West

       ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN PART

      On November 29, 1991 the above-named petitioner-owner filed a Petition for 
      Administrative Review (Docket No. FK 410213-RO) against an order (No. ZDD 
      410188-R) issued on October 29, 1991 by the Rent Administrator, 92-31 Union 
      Hall Street, Jamaica, New York concerning the housing accommodations known 
      as 888 8th Avenue, New York, New York, Apartment No. 5N wherein the Rent 
      Administrator determined that the owner had overcharged the tenants (Allan 
      & Gail Abramowitz).

      Subsequent thereto, the tenants filed a petition in the Supreme Court 
      pursuant to Article 78 of the Civil Practice Law and Rules requesting that 
      the owner's petition be deemed denied.  The proceeding was then remitted to 
      the DHCR for a determination of the petitioner's appeal.

      On November 8, 1991 the owner filed a Petition for Administrative Review 
      (Docket No. FK 410249-RO) against an order (No. ZDI-410275-R) issued on 
      October 4, 1991 wherein the Rent Administrator determined that the owner 
      had overcharged the subsequent tenant (Richard West).

      Because these appeals include common grounds of law or fact, they are being 
      merged and decided in one order and opinion.

      The Administrative Appeals are being determined pursuant to the provisions 
      of Section 2526.1 of the Rent Stabilization Code.

      The issue herein is whether the Rent Administrator's orders were 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 appeals.

      Docket No. DD-410188-R was originally commenced by the filing in April, 
      1989 of a rent overcharge complaint by the tenants (Abramowitz), who stated 
      in substance that they had commenced occupancy pursuant to a lease 
      commencing May 1, 1987 at a rent of $1,433.00 per month, that electricity 
      was not included in the rent, and that they had lived in the apartment 
      through February 28, 1988.








          ADMIN. REVIEW DOCKET NOS.: FK 410213-RO, FK 410249-RO




      In answer to the complaint, the owner submitted leases from December 1, 
      1983, apartment registrations from 1985, and invoices for improvements and 
      new equipment installed in 1985 and 1987.  On August 30, 1991 the owner 
      stated that it was still searching for the balance of the documentation and 
      would be forwarding it shortly.

      In an order issued on October 29, 1991 the Administrator, disallowing any 
      claimed improvements because the owner had not submitted any cancelled 
      checks, found an overcharge of $13,232.10 as of February 29, 1988 including 
      treble damages.

      In this petition, (Docket No. FK 410213-RO) the owner contends in substance 
      that new carpeting and fixtures were installed in 1985 immediately prior to 
      the tenancy of Cherian Koumbe; that substantial improvements, including the 
      installation of new kitchen cabinets, blinds and mirrors, were made 
      immediately prior to the occupancy by the tenants in May, 1987; that the 
      Administrator never requested submission of invoices and cancelled checks 
      substantiating the cost of renovating the apartment; that the owner 
      submitted to the Administrator what invoices it could find, although it 
      could not at the time locate any cancelled checks, as well as some other 
      documents relating to other improvements, due to the move of its corporate 
      headquarters in 1990; that cancelled checks have now been located and are 
      being submitted; that they should be accepted to increase the rent; that in 
      any event the DHCR may not require evidence dating back to more than four 
      years prior to June 29, 1991, the date of filing of the most recent 
      registration prior to the Administrator's August 12, 1991 notice requesting 
      evidence to rebut the presumption of willful overcharge; that the "tenant" 
      of the apartment consists of both Allan and Gail Abramowitz; that the 
      complaint was defective because it was signed only by the latter; and that 
      any overcharge was not willful, since the DHCR's determination of 
      overcharge would be based just on the owner's inability to present 
      documentation of improvements that neither the prior tenant nor the 
      complainants deny were made.  With its petition the owner has enclosed 
      cancelled checks for furniture ($2,400.00), penny brown-carpet ($1,299.00), 
      the installation of kitchen cabinets ($500.00), furnishing and installing 
      a bevelled edge mirror ($125.41), and furnishing and installing Levolor 
      venetian blinds ($768.03).

      In answer, the tenants assert in substance that the owner failed to submit 
      leases, proper registrations and proof of mailings as requested; that the 
      complaint was properly signed by "a tenant"; that the tenants never had an 
      opportunity to dispute the alleged improvements because they were not made 
      aware of the fact, until the owner's appeal, that the owner was claiming 
      that improvements had been made; that the owner has not overcome the 
      presumption of willful overcharge; that the tenants are entitled to 
      interest on the treble damages award; that no improvements appear to have 
      been made to the subject apartment prior to their occupancy in May, 1987; 
      that the mirror affixed to part of a living room wall was severely cracked 
      in one area, and the section was replaced a few months later; that the 
      apartment contained no carpeting, brown or otherwise; that the tenants 
      therefore installed their own blue carpeting, as evidenced by an attached 
      photograph; that it does not matter that the prior tenant (Koumbe) did not 


          ADMIN. REVIEW DOCKET NOS.: FK 410213-RO, FK 410249-RO




      object to his rent; that the owner is incorrect in contending that the DHCR 
      did not at least implicitly request documentation to prove the cost of
      improvements and new equipment; that the owner, which owns many buildings, 
      is well aware of DHCR requirements; that the owner was informed as early as 
      May, 1989 of the possibility of treble damages; that the owner moved at 
      least seven months after receiving that notice and yet did not submit 
      anything at all from their old office during that time; that the owner was 
      apparently basing the rent of the prior tenant (Koumbe) on renting the 
      apartment as a furnished, not renovated, unit; that the tenants were not 
      renting the apartment as a furnished one and none of the items were in the 
      apartment; that the owner, while submitting invoices for furniture and 
      carpeting allegedly installed in the apartment, has not submitted any 
      cancelled checks showing payment for them; that even if all the items had 
      been placed in the apartment there is no way that the prior tenant's rent 
      of $1,200.00 would have represented a lawful increase from the previous 
      rent of $726.11; that the owner has still not submitted proof of mailing of 
      the apartment registrations; that the owner, while submitting a $500.00 
      invoice for the installation of kitchen cabinets, has submitted no invoice 
      for their cost and has therefore not proven that they were ever installed, 
      particularly since the owner has claimed that it again renovated the 
      apartment after the tenants' 10-month occupancy; that the April 1, 1988 
      registration attempts to legitimatize the supposed legal rent of $1,620.00 
      by claiming a $410.33 increase over the April 1, 1987 rent of $1,209.12, 
      effective in February, 1988 even though that is the month that they moved 
      out of the apartment; that they were in fact paying a rent of $1,433.00 
      before this February, 1988 increase supposedly took effect; that the owner 
      has not given an explanation as to why it did not submit cancelled checks 
      until the appeal proceeding; that the checks should therefore not be 
      considered; and that CPLR Section 5001(b) provides for interest to be 
      awarded on top of the treble damages.

      In response the owner contends in substance that the 1988 registration 
      reflects improvements made both in April, 1987, prior to the time that the 
      tenants moved in, as well as in March, 1988, after they moved out; that 
      they admit that the owner installed new kitchen cabinets, new blinds, and 
      a new mirror at a total cost of $1,393.44; and do not deny that it made 
      other improvements; that invoices establish that carpeting and furniture 
      were installed in the apartment, although it is possible that the tenants 
      removed them without notifying the owner; that the Rent Stabilization Code 
      does not contemplate the submission of every conceivable piece of related 
      evidence in answer to an overcharge complaint, especially where, as here, 
      the complaint alleges only that the proceeding was commenced for the sole 
      purpose of following through on a threat to the owner to file a complaint 
      because the owner had not responded to their complaint about another 
      apartment where they were living at the time; and that the owner is 
      entitled to a hearing on the issue of willfulness, at which its employees 
      with knowledge of the apartment renovation and of how the rent for the 
      apartment was computed may testify, where adverse witnesses may be cross- 
      examined, and where oral argument may be heard.

      In reply, the tenants assert in substance that they in fact denied that new 
      cabinets were installed, and would have no way to know if the blinds were 







          ADMIN. REVIEW DOCKET NOS.: FK 410213-RO, FK 410249-RO




      new; that it is the owner's burden to prove, and not the tenants' burden to
      disprove, that improvements were installed; that the owner, which noted the 
      existence of furnishings on the prior tenant's lease, would surely have
      done the same on their lease, or even charged an additional increase for a 
      furnished apartment, if the furnishings had actually been in the apartment 
      when they rented it; that the owner was on notice both of the need to 
      submit documents to substantiate the lawfulness of the rent charged as well 
      as of the possibility of treble damages; and that the owner is not entitled 
      to a hearing on the issue of willfulness because there are no property 
      rights involved and because the owner has not alleged any real facts that 
      would require a hearing.

      The proceeding (Docket No. DI-410275-R) involving the subsequent tenant 
      (Richard West) was commenced by his filing an overcharge complaint in 
      September, 1989 in which he stated that he had commenced occupancy on March 
      1, 1989 at a rent of $1,500.00 per month, and that electricity was not 
      included in his rent.  The owner's responses were similar to those in the 
      proceeding concerning Allan and Gail Abramowitz.  In reply, Richard West's 
      contentions regarding alleged improvements were, among others, that there 
      were venetian blinds when he moved in, but they were yellowed and decayed 
      and one pull cord was considerably frayed; that there was more than one 
      mirror in the apartment; that there were kitchen cabinets, but he did not 
      know their age; and that there was neither any carpet nor any furniture 
      when he moved in.

      In an order issued on October 4, 1991 the Administrator found an overcharge 
      of $21,337.56 from March 1, 1989 to February 28, 1991, including treble 
      damages.

      In its appeal (Docket No. FK 410249-RO) against that order, the owner 
      contends in substance that the order incorrectly recomputes duly registered 
      and unchallenged rents, and incorrectly terminates a major capital 
      improvement ("MCI") increase; that it unlawfully computes treble damages 
      for a retroactive period in excess of the period permitted in view of duly 
      registered unchallenged rents; that, at the time the renovations were made, 
      the DHCR would have accepted paid bills as sufficient proof; that the DHCR 
      should not now require more proof than it would have at that time, 
      particularly since the DHCR's current policy permits various forms of 
      proof; that in any event the fact of the undisputed renovation disproves 
      willfulness, so the mere technical failure to prove the cost of renovations 
      does not warrant treble damages; that the Administrator failed to give the 
      owner adequate opportunity to produce the records of the renovation, since 
      Ian Woodner, the owner's only principal, died during the time period when 
      the DHCR was requesting cancelled checks, since that resulted in the new 
      management's dismissal of a number of staff involved in the assembly of 
      management files, and since such files had been shipped to a new location 
      about that time due to the movement of the owner's office; and that the old 
      cancelled checks have finally been located, are enclosed, and should be 
      accepted.

      In answer, Richard West asserts in substance that the DHCR received the 
      owner's appeal on November 18, 1991, 45 days after the Administrator's 


          ADMIN. REVIEW DOCKET NOS.: FK 410213-RO, FK 410249-RO




      order; that the apartment contained no furniture or carpet when it was
      rented to him; that there is no proof of payment for those items; that 
      willfulness has been shown since the owner knew that the apartment was
      unfurnished and had no carpeting; that the owner's many claims that the 
      renovation charges are "undisputed" is incorrect since both he the prior 
      tenants have disputed them; that even if all of the owner's claimed 
      improvements of $5,092.44 were accepted, whether or not supported by proof 
      of payment, there would still be an overcharge of $172.45 per month; that 
      the owner had initially offered the apartment at a rent of $1,600.00 per 
      month, before finally agreeing to $1,500.00; and that this again shows a 
      willingness to overcharge.

      Because of Mr. West's statement about yellowed and decaying blinds, a DHCR 
      staff member visited the subject apartment on November 16, 1992.  He stated 
      that "[t]here are in this one bedroom apartment a total of 5 blinds 
      (levolor) 3 double and 2 single covering 8 windows."  He also reported that 
      the blinds were in good condition and that the tenants indicated that they 
      belonged to the owner.

      The Commissioner is of the opinion that these petitions should be granted 
      in part.

      Regarding the timeliness of the appeal in Docket No. FK 410249 RO:  
      Although it has a DHCR date stamp of November 18, 1991, it came in an 
      envelope with a U.S. Postal Service postmark of November 8, 1991, which is 
      the 35th day after the October 4, 1991 order in Docket No. DI-410275-R, so 
      the appeal is timely.  

      It is noted that the owner submitted invoices in the proceeding before the 
      Rent Administrator and that the cancelled checks submitted on appeal 
      confirm the information contained in the invoices.  While the invoices, as 
      confirmed by the cancelled checks, are being considered, the $125.41 check 
      to pay for "Mirror furnished and installed with beveled edges as directed" 
      does not result in a rent increase, as a mirror is not new equipment or an 
      improvement that would warrant one.  [Also, while the invoices for the 
      blinds and cabinets are dated February 12, 1987 and March 2, 1987 
      respectively, the invoice for the mirror is dated June 23, 1987, which is 
      7 1/2 weeks after the Abramowitzes commenced occupancy, which suggests that 
      this invoice is for the replacement of the cracked mirror mentioned by the 
      Abramowitzes.]  An increase is allowed for the $500.00 cost of kitchen 
      cabinets, since there is no good evidence to controvert the invoice and 
      cancelled checks.  An increase is allowed for the $768.03 cost of 
      furnishing and installing five Levolor venetian blinds, since an inspection 
      has confirmed that they are being furnished by the owner.  However, since 
      their cost is now reflected in the permanent rent, and since the owner is 
      therefore obligated to maintain them and to continue to furnish them unless 
      it receives authorization from the DHCR to remove them as a service in 
      exchange for reducing the rent, the owner should file an amended 1988 
      registration specifying that $19.20 of the claimed increase was due to new 
      blinds.








          ADMIN. REVIEW DOCKET NOS.: FK 410213-RO, FK 410249-RO




      The lease of Cherian Koumbe for $1,200.00 per month commencing September 1, 
      1985 stated that the apartment was furnished, and that electricity was
      included in the rent.  Neither the Fallek lease before this nor the 
      Abramowitz lease after it mention either of those.  Owner-provided 
      electricity is not registered as either a building or apartment service.  
      Furniture is not registered either as an apartment service, or as  a reason 
      for a rent increase.  In addition, the Abramowitzes have denied that there 
      was any furniture or carpet in the apartment.  If furnishings and 
      electricity were indeed ever provided, it was apparently only for the 
      Koumbe tenancy, and no increase is the permanent rent should have resulted.  
      For these reasons, as well as the fact that there is no proof of payment of 
      the invoices for carpet and furniture, no rent increase is allowed for 
      them.

      The 1985 registration listed a rent of $726.11 in a lease expiring November 
      30, 1985.  The 1986 registration showed a rent of $1212.96 in a lease 
      commencing September 1, 1985, with the only reasons for a $486.85 increase 
      being a vacancy lease [16 1/2% of $726.11] and a Major Capital Improvement 
      [Docket No. LS-000611-OM: 0.76% of $726.11, which became effective only 
      after the owner was already charging a lease rent of $1,200.00].  There was 
      therefore an increase of approximately $360.00 that the owner did not even 
      attempt to justify on the registrations [although the owner would now claim 
      a $92.48 increase for $3,699.00 spent on furnishings before the Koumbe 
      tenancy.  However, this order would disallow them, if they ever existed, 
      for subsequent tenancies because it is doubtful that they remained in the 
      apartment beyond the Koumbe tenancy.]  This resulted in substantial 
      overcharges in the subsequent Abramowitz and West leases.  Because those 
      overcharges occurred as the result of a large unjustified increase in the 
      Koumbe lease, the owner has not rebutted the presumption of willfulness 
      that arises when there is an overcharge, so the Commissioner, similarly to 
      the Administrator in both cases under appeal, has imposed treble damages on 
      overcharges.  Taking these above-mentioned factors into account, the 
      Commissioner has recalculated the lawful stabilization rents and the amount 
      of overcharge.  They are set forth on an amended rent calculation chart 
      attached hereto and made a part hereof.

      Regarding the Abramowitzes' contention that interest should be imposed on 
      top of treble damages, that may not be considered since they did not appeal 
      the Administrator's order on that issue but merely raised it in answer to 
      the owner's appeal.  This order is, however, issued without prejudice to 
      any rights the tenants may have to pursue their claim in a court of 
      competent jurisdiction.

      The Commissioner does not consider it necessary to hold a hearing on the 
      issue of willfulness.  The owner was requested several times during the
      course of the earlier proceedings to document the lawfulness of the rents 
      charged.  On August 12, 1991 (in Docket No. DD-410188-R), and on July 15, 
      1991 and August 13, 1991 (in Docket No. DI-410275-R) the owner was given 
      final notices to submit evidence to rebut the presumption of willfulness 


          ADMIN. REVIEW DOCKET NOS.: FK 410213-RO, FK 410249-RO




      and avoid treble damages.  The owner has had adequate opportunity to submit 
      evidence on the issue, and has simply failed to submit sufficient evidence 
      to justify the rent increases.

      Regarding the owner's contention that the DHCR may not require the 
      submission of documents from a period more than four years prior to the 
      June 29, 1991 filing date of the most recent registration prior to the 
      Administrator's treble damages notice in Docket No. DI-410275-R, that the 
      DHCR may not recompute registered and unchallenged rents, and that treble 
      damages were unlawfully computed for an excessive retroactive period:  The 
      four-year limitation in Section 2526.1(a) of the Code counts time from the 
      filing of the complaint, not from a request for information.  It does not 
      matter (except in the case of the initial registration, where there is a 90 
      day limitation on filing an objection to the registration) that several 
      registrations may occur without a complaint being filed.  Once a complaint 
      is filed, the lawfulness of all rents beginning four years prior to the 
      most recent registration is in question (being measured from April 1st and 
      not from the date that the registration was submitted).  In the present 
      case the Abramowitzes filed a complaint in April, 1989, so the owner was 
      obligated to produce records from April 1, 1985.  The passage of time 
      during the course of the proceeding did not change the owner's obligation 
      to produce records from that date.  Section 2526.1(a)(2)(i) of the Code 
      provides that treble damages may not be imposed on overcharges occurring 
      more than two years before the complaint is filed.  The Abramowitzes filed 
      their complaint in April, 1989; treble damages were imposed beginning May 
      1, 1987, one year and 11 months prior to the filing of the complaint.

      It is not clear what the owner means in contending that the order in Docket 
      No. DI-410275-R "incorrectly terminates an MCI increase," unless it is 
      referring to the temporary rent increase of $2.32 per month ending January 
      31, 1987, which is proper since the temporary rent increase just  
      represents the collection of a specific amount of arrears resulting from 
      the fact that the rent increase in Docket No. LS-000611-OM was effective 
      September 1, 1985 yet the owner was not able to actually begin billing for 
      it until February 1, 1986.  

      The Abramowitz complaint was properly signed by "a tenant"; since Gail 
      Abramowitz is jointly and severally liable for paying the rent stated in 
      the lease that she signed, she is entitled to file an overcharge complaint 
      whether or not it is also signed by the other person on the lease.
      However, the Administrator's order should be modified to state "Gail 
      Abramowitz", rather than "A & G Abramowitz," as the person entitled to a 
      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.








          ADMIN. REVIEW DOCKET NOS.: FK 410213-RO, FK 410249-RO




      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 Gail Abramowitz and by 
      Richard West in the same manner as a judgment with respect to the amount of 
      refund due to each of them respectively.

      THEREFORE, in accordance with the Rent Stabilization Law and Code, it is

      ORDERED, that these Petitions be, and the same hereby are, granted in part 
      and that the Rent Administrator's orders be, and the same hereby are, 
      modified in accordance with this order and opinion.  The lawful 
      stabilization rents and the amounts of overcharge are set forth on the 
      attached rent calculation chart, which is fully made part of this order.  
      The total overcharge of Gail Abramowitz is $12,281.10.  The total 
      overcharge of Richard West is $17,223.12.  The lawful stabilization rent is 
      $1,260.79 per month in the lease from March 1, 1989 to February 28, 1991.

      ISSUED:








                                                                    
                                           JOSEPH A. D'AGOSTA
                                          Deputy Commissioner




                                                    
    

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