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

          APPEAL OF                                DOCKET NO. HC610014RO
                                              :    DRO DOCKET NO.
            Residential Management Inc.            ZDE610459R
                                                   TENANT: Jose & Maureen
                               PETITIONER     :    Mendoza


          On March 5, 1993, the above-named petitioner-owner filed a Petition 
          for Administrative Review against an order issued on February 12, 
          1993 by the Rent Administrator, 92-31 Union Hall Street, Jamaica, 
          New York concerning  the  housing  accommodation  known  as  2839
          Valentine Avenue, Apartment GF,  Bronx,  New  York,  wherein  the
          Administrator determined that the owner had overcharged the tenant.

          The Commissioner has reviewed all of the evidence in the record and 
          has carefully considered that portion of the record relevant to the 
          issues raised in the Administrative Appeal.

          This proceeding was commenced on May 23,  1989  when  the  tenant
          fifled a complaint of rent overcharge.

          In answer to the complaint, the  owner  asserted  that  the  rent
          included a Major Capital Improvement (hereafter MCI) rent increase 
          for new windows.

          Subsequent thereto, in response to a notice of the imposition  of
          treble damages, the owner supplemented its answer and asserted that 
          the rent included  an  increase  based  on  individual  apartment
          improvements, that a proper rent was charged and that the tenants 
          had not paid all rent due but had bounced several rent checks.  The 
          owner submitted some bills and cancelled checks as  well  as  the
          complainant's lease with its response.

          On November 4, 1992, the owner was advised that its submission of 
          evidence to warrant  a  rent  increase  was  incomplete  and  was
          requested to submit a statement showing the breakdown of each item 
          claimed.  The owner was also advised that the submitted proof  of
          payment did not conform to the amount claimed.



          The record contains no  further  substantiation  of  the  claimed
          improvements rent increase.

          In the order issued  on  February  12,  1993,  the  Administrator
          established the lawful stabilization rent at $454.71 for the period 
          July 1, 1988 to January 31, 1989 and directed the owner to refund 
          to the tenant an overcharge of $33,314.83 including treble damages 
          on overcharges from June 1, 1987 through January 31, 1989.

          In its appeal, the owner contends that the Administrator's  order
          should be revoked.  The  owner  asserts  that  the  Administrator
          committed several errors which warrant reversal of the order:  1)
          the Administrator failed to award the owner a  vacancy  allowance
          even though the owner is not precluded under either of the  tests
          governing vacancy increases pursuant to Rent Guideline Board order 
          (hereafter RGBO) #18: 2) The Administrator failed to include an MCI 
          rent increase in calculating the permissible guidelines  increase
          for the June 1, 1988 lease; 3) Treble Damages are inappropriate 
          where an overcharge exists due to an  inability  to  substantiate
          costs of improvements but where  it  is  not  disputed  that  the
          improvements were done; 4) The tenant did not pay rent for November 
          and December of 1988 and for January 1989 and should not receive a 
          refund including treble damages for the months in which no rent was 

          In response to the appeal, the tenant contends that 1) the subject 
          apartment was not vacant between April 1, 1985  and  November  1,
          1986; 2) the owner spent less than  $12,000.00  for  the  alleged
          imprevements.   3) Whatever renovations were made, the  apartment
          was in need of repairs.  4) Monthly rent receipts show  that  the
          rent was paid up to January 1989 not counting the security deposit, 
          which, if applied to the rent, would pay for January 1989; 5) The 
          superintendent used the tenant's electric line with the knowledge 
          of the owner; 6) the superintendent illegally entered the subject 
          apartment and stole property worth $3,000.00.

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

          Pursuant to RGBO #18, the  guidelines  period  appliable  to  the
          complainant's initial lease, an owner is entitled  to  a  vacancy
          increase only if a vacancy increase were not taken under RGBO #17 
          which covered stabilized leases commencing between October 1, 1985 
          and September 30, 1986.

          The evidence of record in this case indicates that the  April  1,
          1984 registered rent of $375.00 was  not  changed  until  initial
          occupancy by the tenant herein on November 1, 1986.  Accordingly no 

          vacancy allowance was taken during the Guideline 17 period and the 


          owner is now entitled to a 7 1/2% vacancy allowance  pursuant  to
          RGBO #18.  The Rent Administrator's order  must  be  modified  to
          reflect this vacancy allowance.

          With respect to the MCI rent increase effective December 1,  1986
          and collectible July 1, 1988, the  Commissioner  finds  that  the
          Administrator should have added the increase of $29.46 to the base 
          rent to compute the legal regulated rent  under  guidelines  #19.
          Accordingly, the overcharge is reduced to  account  for  the  MCI

          As to appropriateness of treble damages in the  instant  case,  a
          review of the record  discloses  that  the  invoices  offered  in
          substantiation of the improvements rent increase were incomplete, 
          so non-specific as to render  it  impossible  to  determine  what
          improvements eligible under Code  Section  2522.4  were  actually
          performed as well  as  to  determine  the  actual  cost  of  such
          improvements.  The Commissioner notes  that  work  designated  as
          ordinary repair and maintenance  does  not  qualify  for  a  rent
          increase pursuant to Section 2522.4.   The  Commissioner  further
          notes that the owner did not provide a more  definite  statement,
          although afforded the opportunity to do so.  The cancelled checks 
          offered as evidence of payment do not add up to the amount claimed 
          ($12,000.00).  Based upon the evidence of record, the Commissioner 
          finds  that  the  owner  failed  to  substantiate   the   claimed
          improvements as well as the actual  cost  of  such  improvements.
          Given the  tenant's  doubts  as  to  the  iimprovements  actually
          accomplished in conjunction with the owner's failure to  properly
          document, the Administrator was  warranted  in  assessing  treble
          damages on that portion of the overcharge collected between  June
          1987 and January 1989.  The instant proceeding does not meet  the
          standard enumerated in cases where the Commissioner has determined 
          that treble damages are unwarranted  where  there  is  sufficient
          evidence to show that the owner believed in good  faith  that  it
          could increase the rent for improvements.

          A review of the record reveals that the tenant submitted cancelled 
          checks, including  certified  checks  and  money  order  receipts
          evidencing payment of the rent at least  to  January  1989.   The
          tenant may not claim the security deposit  as  rent.   Since  the
          record indicates that the rent was not paid for January 1989, the 
          refund owed to the tenant is reduced by  one  month's  rent  plus
          treble damages for that month. 

          The Commissioner finds that the tenant's assertions regarding the 
          superintendent's action with  respect  to  electrical  usage  and
          entering the subject apartment are not germane to the  overcharge
          proceeding and will not be addressed herein.

          In the rent calculation chart attached hereto and fully made a part 


          of this order,  the  Commissioner  has  recalculated  the  lawful
          stabilization rent and the overcharge to be refunded to the tenant.

          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.  The evidence 
          of record indicates that the tenant has now moved from the subject 
          apartment.  A copy of this order is being  sent  to  the  current
          occupant of the subject apartment.

          The Commissioner has determined in this Order and Opinion that the 
          owner collected overcharges of $25,687.92.  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 this petition for Administrative Review be, and the 
          same hereby is, granted in part and, that the order of  the  Rent
          Administrator be, and the same hereby is, modified in  accordance
          with this order and opinion.


                                                         JOSEPH A. D'AGOSTA
                                                         Deputy Commissioner


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