GD 110230 RO

                                STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEAL OF                              DOCKET NO. GD 110230 RO

                                          :  DISTRICT RENT OFFICE
           Man Kit Sze,                      DOCKET NO. ZDK 110143 R
                                             TENANT: Damarz Marmal            

                            PETITIONER    : 

                          ADMINISTRATIVE REVIEW IN PART

      On April 27, 1992, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on March 27, 1992, by the 
      Rent Administrator, 92-31 Union Hall Street, Jamaica,  New York, 
      concerning the housing accommodations known as 35-15 94th Street, 
      Jackson Heights, New York, Apartment No. 4C, wherein the Administrator 
      determined that the owner had overcharged the tenant.

      The issue herein is whether the Rent Administrator's order was 

      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.  

      This proceeding was originally commenced by the filing of a rent 
      overcharge complaint by the tenant on November 14, 1989.

      The owner was served with a copy of the tenant's complaint and submitted 
      a rental history as required.  The owner stated in substance that he had 
      made major improvements to the subject apartment after the former tenant 
      had vacated and before the complainant signed a lease and that since 
      there was no tenant of record, written tenant consent for the 
      improvements was not necessary.

      In the order here under review, the Administrator disallowed a rent 
      increase for the improvements and directed the owner to refund 

          GD 110230 RO

      overcharges of $8,065.86 inclusive of treble damages.

      In this appeal, the owner requests that his answer to the complaint be 
      reconsidered to allow the 1/40th rent increase.  The owner asserts that 
      he began renovations in the subject apartment after the prior tenant 
      vacated.  The current tenant, who had illegally occupied the apartment 
      while the renovation was in progress, consented to the renovation as a 
      condition precedent to being given a lease.  In the alternative of 
      reversing the Administrator's order in its entirety, the owner requests 
      that since he acted in good faith in making the improvements, the 
      imposition of treble damages be removed.

      The Commissioner is of the opinion that this petition should be granted 
      in part.

      Section 2522.4 of the Rent Stabilization Code provides that where there 
      has been an installation of new equipment or improvements in a 
      stabilized apartment, the stabilization rent for said unit may be 
      increased by 1/40th of the cost of such improvements provided the tenant 
      then in occupancy has consented thereto in writing.  In addition, in the 
      case of vacant housing accommodations, tenant consent is not required.

      Although the subject apartment was renovated before the tenant's lease 
      commenced, the record reveals that the tenant was in occupancy, and the 
      owner accepted rent from the tenant while the work was being done during 
      the two months before the commencement of the lease term.  Accordingly, 
      pursuant to Code Section 2522.4, the owner should have procured the 
      tenant's written consent.  The Commissioner finds, therefore that the 
      Administrator correctly disallowed the rent increase.

      The Rent Stabilization Law provides for the assessment of treble damages 
      on all willful overcharges.  The statute creates a presumption of 
      willfulness, rebuttable by the owner proving non-willfulness by a 
      preponderance of the evidence.  

      In the instant case, the owner made improvements to the subject 
      apartment but neglected to get written tenant consent in the mistaken 
      belief that because the tenant had not signed a lease, such consent was 
      unnecessary.  The record discloses that on two occasions the tenant did 
      not respond to request for information concerning the improvements.  
      However, the tenant has never stated that the work was not done.  The 
      Commissioner finds that in such circumstances the overcharge was not 
      willful, removes the treble damages penalty and pursuant to Code Section 
      2526.1 assesses interest on the overcharge.  Accordingly, the owner is 
      directed to refund $2,946.71 inclusive of interest on the overcharge 
      occurring from August 1, 1989 to September 30, 1989 rather than 
      refunding the overcharge including treble damages.

      Because this determination concerns lawful rents only through September 
      30, 1991 the owner is cautioned to adjust subsequent rents to an amount 
      no greater than that determined by the Rent Administrator's order plus 

          GD 110230 RO

      any lawful increases.

      If the owner has already complied with the Administrator's order and 
      there are arrears due to the owner as a result of the present 
      determination, the owner is directed to allow the tenant to pay off the 
      arrears in twenty fair equal monthly installments.  Should the tenant 
      vacate after the issuance of this order, or have previously vacated said 
      arrears shall be payable immediately.

      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 percent per month thereof may be offset against any 
      rent thereafter due the owner.

      THEREFORE, in accordance with 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 hereby is, 
      modified in accordance with this order and opinion.  


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner


          GD 110230 RO


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