DHCR Decisions
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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
APPEALS OF DOCKET NO.FB410184RT
FB410241RO
: DRO DOCKET NO. ZCD410365R
STEPHEN LANDOW & LINA YANNI
PETITIONERS :
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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
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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
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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
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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
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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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