FB410184RT, FB410241RO





                                  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 
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEALS OF                              DOCKET NO.FB410184RT
                                                            FB410241RO
                                              :  DRO DOCKET NO. ZCD410365R
          STEPHEN LANDOW & LINA YANNI                     

          PETITIONERS    : 
          ------------------------------------X
                                       
          ORDER AND OPINION GRANTING  TENANT'S  PETITION FOR ADMINISTRATIVE 
          REVIEW IN PART AND DENYING OWNER'S PETITION FOR ADMINISTRATIVE 
          REVIEW AND MODIFYING ADMINISTRATOR'S ORDER


               On February 15, 1991, the above-named petitioner-tenant filed 
          a Petition for Administrative Review (PAR) and on February 25, 1991 
          the above -named petitioner-owner filed a Petition for 
          Administrative Review against an order issued on January 24, 1991, 
          by the Rent Administrator, 92-31 Union Hall Street, Jamaica, New 
          York, concerning the housing accommodations known as 20 West 76th 
          Street, apartment 3B, New York, New York wherein the Administrator 
          established the lawful rent at $1310.68 effective October 15, 1989 
          and directed the owner to refund overcharges of $15,402.57 inclusive 
          of excess security and treble damages.  These appeals have been 
          consolidated for determination as they concern the same facts.  

               The Administrative Appeals are being determined pursuant to the 
          provisions of Sections 2522.4 and 2526.1 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 appeals.  
               
               This proceeding was commenced when the tenant filed a complaint 
          of rent overcharge.  The tenant stated that he had taken occupancy 
          of the subject apartment on September 1, 1986 pursuant to a two year 
          lease at a rental of $1258.80, which the tenant believed to be 
          excessive .

               In answer to the complaint, the owner stated that the rent 
          being charged included guidelines increases and an allowance equal 
          to 1/40th of the cost ($10,137.68) of improving the subject 







          FB410184RT, FB410241RO

          apartment during the vacancy period preceding the prior tenancy or 
          $253.44.  The owner submitted bills and cancelled checks to 
          substantiate the following improvements:
               1.  New windows at a cost of $1214.00
               2.  Floor scraping  at        325.00
               3.  Installation of pipes,   1685.00
                   gas lines, vanity and
                   shower body
               4.  Kitchen cabinets         1060.00  
               5.  Refrigerator              346.40
               6.  Range                     281.45
               7.  Miscellaneous hardware     84.39
               8.  Electrical work           350.00
               9.  Painting                  375.00
              10.  Remodeled kitchen and    4500.00   Total-$10,221.24
                   bathroom including the following: bathroom wall tiles were 
               redone including the removal of  the old wall tiles, installed 
               new wire mesh and new  cement and reinstalled the old tile. 
               Installation of kitchen cabinets$170.00;  new kitchen          
               cabinets -$1975.00;  material:new plastering for kitchen-      
              $385.00;  labor:2 men for 32 hrs @$32.00/hr.-$960.00;           
               material:for bathroom-$230.00;  labor:  2 men for 26 hrs       
               @$30.00/hr.-$780.00.  Total - $4500.00                         
                           
               In order no. ZCD410365R, the Administrator approved $9,522.07 
          as the cost of apartment improvements but disallowed the costs of 
          floor scraping $325.00 and painting $375.00 as ordinary repair and 
          maintenance.  The Administrator also disallowed the 7.5% vacancy 
          increase taken at the inception of the complainant's occupancy.  The 
          Administrator further established the lawful rent at $1310.68 
          effective October 15, 1989 and ordered a refund of $15,402.57 
          inclusive of excess security and treble damages.

               In his PAR, the tenant contends that the order should be 
          modified to reduce the allowance for apartment improvements because 
          the bills submitted are inflated and the materials used and the work 
          done bears no relation to the cost alleged by the owner.  The tenant 
          admits that 4 new windows were installed (two of which are barely 
          operable) but states that nothing was done in the bathroom.  The 
          tenant requests a review of the inflated claim and bills submitted 
          by the owner.

               In reply to the tenant's PAR, the owner states that said 
          petition should be denied and that the tenant is bound by the 
          documentation previously submitted to the Rent Administrator.

               In her PAR, the owner requests that either the entire 
          overcharge finding be rescinded or that treble damages be removed 
          from the finding.  The owner contends that taking a vacancy increase 
          during guidelines period no. 17 was an innocent error committed by 
          the owner's cousin who managed the rentals at that time.    Because 
          of the complexity of Rent Guidelines Board Orders, the owner should 
          not be penalized for an innocent error.  The owner further contends 
          that the overcharges have increased because of the processing time 
          required by the DHCR.  Moreover, the owner contends that the 
          Administrator incorrectly computed the overcharge to a date beyond 
          the order's issuance, a period in which no overcharge occurred.  
          Beginning  February 1991, only the rent established by the 


          FB410184RT, FB410241RO

          Administrator's order was collected;  there was no overcharge for 
          that period, so the overcharge and treble damages for the period 
          beginning February 1, 1991 should be removed from the order.

               In reply to the owner's PAR, the tenant states that the 
          improvements increase should be reduced as stated in his own 
          petition.  The tenant further contends that treble damages are 
          appropriate as the vacancy increase was written into the lease by 
          the owner's cousin,  an experienced realtor in New York  who, acting 
          as the rental broker for the subject apartment, took a 15% fee.  
          Various other statements made by the tenant in his reply to the 
          owner's petition are not germane to the issues raised and are not 
          considered herein.

                The Commissioner is of the opinion that the tenant's PAR 
          should be granted in part and the owner's PAR should be denied.

               Review of the bills submitted by the owner reveals that  the 
          Administrator erred in permitting the owner an increase for two sets 
          of cabinets, one set @$1060.00 and another set @$1975.00.  
          Accordingly, the Commissioner removes the cost of one set ($1060.00) 
          from the permitted allowance.  In addition, costs incurred for work 
          characterized as ordinary repair and maintenance do not entitle an 
          owner  to a rent increase pursuant to Section 2522.4 of the Rent 
          Stabilization Code.  The Commissioner, therefore, also removes from 
          the improvements allowance the following work as not qualified 
          improvements:  material ($385.00) and labor ($960.00) for plastering 
          kitchen; material ($230.00) and labor ($780.00) for removing and 
          repairing bathroom wall tile .  This changes the qualifying 
          improvements total to $6106.24, a disallowance of $3415.00 for the 
          items listed above plus the prior disallowance of $700.00 for floor 
          scraping and painting equals a total disallowance of $4115.00 so the 
          total claimed by the owner of $10,221.24-$4115.00 = $6106.24, for a 
          rent increase equal to $152.66.  The Commissioner  will not examine 
          the price paid for improvements as the owner was not required by the 
          Code to get the cheapest price available.  As to the quality of the 
          improvements, the tenant is advised to file a service complaint for 
          a reduction in rent if  poor quality or installation results in a 
          service reduction, e.g. the alleged barely-operable windows.  The 
          tenant's statement regarding the  brokerage fee was not made in the 
          proceeding before the Administrator and is not the proper subject 
          for inquiry in this proceeding.

               The Commissioner notes that the overcharge determined correctly 
          included the period from September 1, 1986 through January 31, 1991.  
          Therefore, that portion of the owner's  appeal is denied.

               As to treble damages,  treble damages are appropriate where an 
          overcharge is the result of taking unwarranted rent increases which 
          conduct is presumed by the Code to be willful.  The instant 
          overcharge arises from an impermissible rent increase based on work 
          characterized as ordinary repair and maintenance as well as 
          duplication of some costs, i.e. two sets of kitchen cabinets, and 
          the taking of a vacancy allowance which was not permitted by the 
          guidelines.  A vacany increase was not permitted under RGBO #17, as 
          is the case here, if a vacancy increase had been taken under RGBO 
          #16. The Commissioner rejects the owner's contention that the 
          complexity of the guidelines led to an innocent error which should 







          FB410184RT, FB410241RO

          not engender treble damages.  The guidelines state unequivocally 
          that a vacancy increase pursuant to RGBO #16 precludes an additional 
          vacancy increase pursuant to RGBO #17.     With respect to the 
          processing time, the owner could have examined her records to 
          determine any errors and could have adjusted the rent while this 
          complaint was pending.  The Commissioner finds that the owner has 
          not overcome the presumption of wiifulness and that the 
          Administrator did not err in assessing treble damages.

               To encompass the above findings in the legal rent, the 
          Commissioner has adjusted the rent calculation chart as follows:

          lease term    Rent charged  Lawful rent     Explanation              
                                                              
          5/1/85 to 4/30/87 $1104.21   $1010.80       RGBO #16: 9/30/84  N/A   
                                                      rent$736.60 + 16.5%      
                                                       (vacancy7.5% + 9% 
                                                       guideline) for a two
                                                       year vacancy lease +    
                                                       $152.66   
                                                                               
           9/1/86 to 8/31/88  $1258.80   $1076.50      RGBO #17: 9/30/85       
                                                       $1010.80 + 6.5%
                                                       guideline for a two     
                                                       year vacancy lease    

          Month-to-Month      $1258.80   $1076.50      Tenant remains in
                                                       occupancy as a month to  
                                                       month tenant.          
                                                       Tenant paid $1258.80   
                                                       on 9/1/88 and paid     
                                                       $629.40 for rent  from
                                                       10/1/88 to 10/14/88 
          10/15/88 to 10/14/89 $1296.56   $1108.80     Owner and tenant did   
                                                       not sign renewal lease  
                                                       until 10/15/88.  Owner  
                                                       must use the increases
                                                       that were in effect on 
                                                       9/1/88 when tenant's 
                                                       vacancy lease expired.
                                                       Therefore, RGBO # 19:
                                                       9/30/87 rent $1076.50
                                                       + 3% guideline for  
                                                       a one year renewal
          10/15/89 to 10/14/91  $1413.25   $1208.59    RGBO #21: 9/30/89 rent 
                                                       $1108.80 + 9% guideline 
                                                       for a two year renewal

          OVERCHARGES
          9/1/86 - 8/31/88   $182.30 X 24 months 
                              = $4375.20                                   
             
          Month to Month     $182.30 for one month
                             $ 91.15 for 1/2 month
          10/15/88-10/14/89  $187.76 X 12 months
                             = $2253.12
          10/15/89-10/14/91 $204.66 X 16 months
                             = $3274.56


          FB410184RT, FB410241RO

          TOTAL OVERCHARGE         $10,176.33 x 3 (treble damages) =$30,528.99
          Excess security                                               204.66
          Total overcharges to be refunded through 1/31/91           
          $30,733.65

               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.

               DHCR registration records indicate that the tenant has now 
          vacated the subject apartment.  A copy of this order is being sent 
          to the current occupants of the subject apartment.

               The Commissioner has determined in this Order and Opinion that 
          the owner collected overcharges of $30,733.65  This Order may, upon 
          expiration of the period for seeking review of this Order and 
          Opinion pursuant to Article Seventy-eight of the Civil Practice Law 
          and Rules, be filed and enforced as a judgment.  Where the tenant 
          files this Order as a judgment, the County Clerk may add to the 
          overcharge, interest at the rate payable on a judgment pursuant to 
          section 5004 of the Civil Practice Law and Rules from the issuance 
          date of the Rent Administrator's Order to the issuance date of the 
          Commissioner's Order.

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

               ORDERED, that the tenant's petition for administrative review 
          be, and the same hereby is, granted in part, that the owner's 
          petition for administrative review be, and the sanme hereby is, 
          denied  and, that the order of the Rent Administrator be, and the 
          same hereby is,modified in accordance with this order and opinion.


          ISSUED



                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner



                     















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