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

     ------------------------------------X 
     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    : 
     ------------------------------------X                             

            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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