GJ110048RO
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
APPEAL OF DOCKET NO. GJ110048RO
Markland Estates, Inc., : DISTRICT RENT ADMINISTRATOR'S
DOCKET NO. ZED110317R
TENANT: Marie Vega
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On October 1, 1992 the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on September 3, 1992 by a Rent
Administrator concerning the housing accommodations known as Apartment 1H at
89-38 164th Street, Jamaica, New York wherein the Rent Administrator
determined that the owner had overcharged the tenant.
The issue in this appeal 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 appeal.
This proceeding was originally commenced by the filing in April, 1990 of a
rent overcharge complaint by the tenant, in which she stated that she had
commenced occupancy on July 21, 1988 at a rent of $380.00 per month.
In answer, the owner contended among other things that $2,160.00 worth of
improvements were made to the apartment prior to November, 1986 during a
vacancy, and that the improvements were registered for 1987. The owner
stated that it was unable to locate the bills or cancelled checks, other than
one invoice for kitchen improvements. The owner included an invoice charging
(including tax) $276.04 for a kitchen sink, cabinet and faucet; $282.86 for
a stove and hood; and $335.52 for a refrigerator. The 1987 registration
listed increases of $12.00 for a stove, $14.00 for a refrigerator, $20.00 for
kitchen improvements, and $8.00 for walls and floors. In response to a
treble damages notice, the owner contended among other things that the
tenant's rent had been lowered from $414.20 to $412.28 as of May 29, 1990;
that two M.C.I. orders had granted retroactive increases; that the owner of
the premises, Marcos A. Manjerrez, should have been entitled to collect a
rent increase of $54.00 per month for the November, 1986 improvements, but
his death in 1989 made many of his records verifying the improvements
unlocatable; that treble damages should not be assessed against his estate
just because of the inability of the executor to locate some of the bills;
that the DHCR had held that an inability of an owner to substantiate
improvements does not mean there was a willful overcharge; and that the
Appellate Division, 1st Dept. held in Round Hill Mgmt. Co. v. Higgins, 575
N.Y.S.2d 843, that a finding of willfulness should depend on a finding that
an owner had reason to know that the amount it was charging was in excess of
the lawful rent.
GJ110048RO
In response, the tenant asserted that the subject apartment was a storage
apartment; that it had an old refrigerator and old stove which she had to
clean and buy knobs for; and that new appliances are needed to replace the
stove and refrigerator, with the latter still having a broken door despite a
court order.
In an order issued on September 3, 1992 the Administrator, allowing an
increase for $894.42 in improvements, freezing the collectible rent due to an
order resulting from service decreases, and imposing treble damages except
during the period between the effective date and issuance date of the rent
reduction order, determined an overcharge of $4,678.95 as of August 31, 1992.
In this petition, the owner contends in substance that it appealed the rent
reduction order, so the rent reduction was effective prospectively only; that
it is very likely to succeed on its appeal; that the legal collectible rent
from July 1, 1989 through June 30, 1991 was therefore $412.28; that the owner
reduced the rent to that amount, and requested that the tenant send only that
amount of rent; and that this demonstrates the owner's good faith and lack of
willfulness even though the tenant continued on her own to send $414.20
rather than $412.28. The owner also makes contentions regarding improvements
and treble damages identical to those made in the proceeding below.
In answer, the tenant asserts in substance that the owner is not in
compliance with court orders to make repairs.
The Commissioner is of the opinion that this petition for should be denied.
On October 14, 1993 an order (Docket No. FJ110392RO) was issued denying the
owner's appeal of the rent reduction order in Docket No. 110513S. That rent
reduction order is now final, so the Administrator's use of it is upheld.
Aside from the tenant's contention that the kitchen appliances were old [and
presumably more than just 21 months old] at the time she move in, the 1987
registration cannot be relied upon, for the purpose of avoiding treble
damages, as good evidence that $2,160.00 in improvements were actually made
even though the owner does not currently have documentation for more than
$893.85 worth. The registration lists a $14.00 increase for a new
refrigerator, implying a $560.00 cost. The invoice was for only $335.52, and
it seems unlikely that it cost an additional $224.48 to deliver and install
it. The registration's listing of $12.00 for a stove implies a cost of
$480.00, while the invoice had only $282.86 for a stove and hood. The $8.00
increase for "walls, floors," implying a $320.00 cost, is small enough to
suggest ordinary maintenance and repairs rather than an increase in services.
The $20.00 increase for $800.00 in other kitchen improvements is supported
only by $276.04 on the invoice for a new sink. This is not a situation where
improvements apparently costing approximately the amount claimed are clearly
installed, but where no increase is allowed because of a lack of
documentation. In the present case there are two specific appliances for
which increases were taken far in excess of their documented costs, and other
improvements which seem likely to be either disallowable or exaggerated in
claimed costs. This does not even approach the situation in Round Hill
Mgmt., where a new owner had no reason to suspect that a rent of $200, the
lowest of eleven identical apartments in the building, was unlawful. In the
present case, rather than there just being a failure to prove that the
overcharge was not willful, it could be considered that there is direct
evidence of a willful overcharge. Further, the bulk of the overcharge was
GJ110048RO
due to the owner's failure to reduce the rent as ordered due to the service
increase, and not because of the failure to prove the cost of improvements.
Treble damages were clearly warranted for the failure and it is noted that
even though the owner filed a PAR against the rent reduction order (later
denied), the owner was still
required to reduce the rent in compliance with the rent reduction order while
the PAR was pending.
The owner is directed to reflect the findings and determinations made in the
Administrator's order on all future registration statements, including those
for the current year if not already filed, citing the Administrator's 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 the Administrator's order. The owner is further directed to adjust
subsequent rents to an amount no greater than that determined by the
Administrator's order plus any lawful increases.
The Commissioner has determined in this Order and Opinion that the owner
collected overcharges of $4,678.95. 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 or not in excess of twenty percent per month of the overcharge may
be offset against any rent thereafter due the owner. Where the tenant
credits the overcharge, the tenant may add to the overcharge, or 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 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.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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