GE 410059 RO

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

      APPEAL OF                              DOCKET NO. GE 410059 RO

                                          :  DISTRICT RENT OFFICE
           Metropolitan Life Ins. Co.,       DOCKET NO. ZDK 410403 R
                                             TENANT: Milton Lewis             
                            PETITIONER    : 


      On May 12, 1992, the above-named petitioner-owner filed a Petition for 
      Administrative Review against an order issued on April 10, 1992, by the 
      Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
      concerning the housing accommodations known as 431 East 20th Street, 
      New York, New York, Apartment No. 3B, wherein the Rent Administrator 
      determined that the owner had overcharged the tenant.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Section 2520.13; 2525.2(a) and 2526.1 of the Rent Stabilization Code 
      (hereafter RSC).

      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 in November, 1989, stating in 
      substance that the owner is collecting an additional fee for use of 
      electricity for a frost-free refrigerator effective September 1, 1988 
      whereas the manual defrost model, whose electrical costs are included in 
      the apartment's rent, is much less cost efficient than the frost-free 
      model.  Electricity is included in the rent of the subject apartment.

      The owner was served with a copy of the tenant's complaint and stated in 
      substance that the tenant had signed an agreement to pay for the 
      increased electrical costs which a frost-free model incurs; that despite 
      the tenants claims of increased cost efficiency, a frost free model is 
      more costly to operate and that their collection of a fee was authorized 
      and affirmed by the Commissioner in a prior opinion ARL 08584-L 
      involving another tenant in the complex.

      In Order Number ZDK 410403 R, the Rent Administrator determined that the 
      tenant had been overcharged and directed a refund to the tenant of 

          GE 410059 RO

      $825.89 including interest for the additional electrical fee collected 
      by the owner in violation of section 2525.1 of the code.  The owner was 
      directed to cease billing the tenant for the use of the frost-free 
      refrigerator but also advised of its right to have the tenant remove his 
      frost-free refrigerator and allow the owner to replace it with a 
      refrigerator comparable to the one supplied on the base date.

      In this petition, the owner contends in substance that the Rent 
      Administrator's order should be reversed because the tenants had 
      voluntarily entered into the agreement to pay the additional electrical 
      costs for the frost free model; that contrary to manufacturer's claims 
      presented by the tenant, a frost-free model is not more cost efficient 
      than a manual defrost; that the service of allowing the tenant's frost 
      free model is not a service provided on the applicable base date nor 
      thereafter by applicable law and is not therefore subject to the Rent 
      Stabilization Law and that the Commissioner is bound by his ruling in 
      the prior opinion ARL-08584-L which affirmed the owner's right to 
      collect an increase for electrical costs associated with the use of a 
      frost-free refrigerator pursuant to a tenant's consent agreement.

      In answer to the owner's petition, the tenant stated in substance that
      the data on the cost efficiency of their frost-free model was provided 
      by Con Edison and Consumer Reports, not manufacturer's claims as the 
      owner alleges; that currently the owner offers tenants a frost free 
      model at a $9.87 monthly fee thereby conceding the efficiency of the 
      frost free model over the manual; that they were forced to buy and 
      maintain their own frost-free refrigerator as well as paying almost 
      double in electrical fees and further they had to pay a $50.00 storage 
      for their former 30 year old model which is an absurd charge.

      The Commissioner is of the opinion that this petition should be denied.

      Sections 2525.1 and 2525.2(A) of the RSC provide in pertinent part that, 
      regardless of any contract or agreement, it is unlawful for the owner to 
      collect rent in excess of the legal regulated rent or to evade the 
      requirements of the code by obliging tenants to pay additional fees or 
      by modifying the services furnished or required to be furnished.

      section 2520.13 of the RSC provides in pertinent part that any tenant 
      agreement waiving any of the rights provided to the tenant by the RSC is 
      void and not binding on the tenant.

      An examination of the record in this case discloses that the Rent 
      Administrator correctly applied Sections 2525.1 and 2525.2(a) and 
      Section 2520.13 of the code because there exists no provision in either 
      the Rent Stabilization Law or Code or Rent Guidelines Board orders 
      authorizing the imposition of a supplementary fee above the lawful 
      stabilization rent to offset an increase for the use of a frost-free 
      refrigerator rather than a manual-defrost model even though the costs of 
      electricity are included in the rent.

      Moreover, the signed consent by the tenants to pay the additional fee 
      does not in itself authorize such collection because the provisions of 
      Section 2520.13 of the Code renders such an agreement as not binding on 
      the tenants who do not waive their rights under the Rent Stabilization 

          GE 410059 RO

      Law and Code.

      Furthermore, the Rent Administrator distinguished between the instant 
      case and the Commissioner's prior opinion ARL-08584-L, cited by the 
      owner in its response to the tenants complaint and in its appeal, by 
      noting that the issue before the Commissioner in the cited case was the 
      lawfulness of electrical surcharges for air conditioner usage in an 
      electrical inclusion building.  The existence of a separate agreement by 
      the tenant to pay a supplementary fee for a frost-free refrigerator was 
      solely noted by the Commissioner to clarify that the total fee collected 
      by the owner was not a fee in excess of the permissible air conditioner 
      fee and that the tenants in that case, unlike the tenants in the instant 
      case, did not challenge the collection of the electrical surcharge for 
      the frost-free refrigerator.  The Commissioner made no ruling concerning 
      the merits of an electrical surcharge fee for the use of a frost-free 
      refrigerator in ARL 08584-L.

      Therefore, the Rent Administrator correctly determined that the owner's 
      reliance upon ARL 08584-L was misplaced.  However, the Rent 
      Administrator conceded that the owner's reliance upon the Commissioner's 
      prior opinion successfully rebutted the presumption of willfulness 
      warranting only the assessment of interest rather than treble damages 
      upon the ensuing overcharge.

      The owner's contention that the electrical supplement fee for frost-free 
      refrigerator use should be construed as a new service, not required to 
      be provided after the applicable base date and therefore outside the 
      purview of the Rent Stabilization Law and Code is rejected as without 

      Section 2520.6(R)(1) of the RSC clearly defines required services as not 
      only those maintained on the applicable base date but also "...any 
      additional space or service provided or required to be provided 
      thereafter by applicable law..." (emphasis added)

      Further, he Commissioner will not consider the merits of the tenant's 
      contention that a $50.00 fee was assessed by the owner for storage of 
      the old refrigerator, as this is not a de novo proceeding and the issue 
      was not presented before the Rent Administrator.  In addition, having 
      fail to file their own petition against the Rent Administrator's order, 
      it would be inappropriate to consider the tenant's contention in this 
      proceeding brought by the owner.

      Accordingly, the Rent Administrator's order was warranted.

      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, 
      not in excess of twenty percent per month thereof of the remaining 
      overcharge may be offset against any rent thereafter due the owner.

      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.

          GE 410059 RO


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner

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