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

      APPEAL OF                              DOCKET NO.: HC210192RO

           Streamline Mgt., Inc.,            DRO DOCKET NO.: EE210381R


                                     IN PART

      On March 2, 1993, the above-named owner filed a Petition for 
      Administrative Review against a Rent Administrator's order issued on 
      January 29, 1993, in which it was determined that the tenant of the 
      housing accommodations known as Apt. LB4 at 200 East 17th Street, 
      Brooklyn, had been overcharged.

      This proceeding had originated with the tenant's complaint of May, 1990.  
      In answer the owner submitted inter alia, a copy of a lease that had 
      commenced on November 1, 1987, in which the monthly rent was stated as 
      "$479.07 (includes new refrigerator and stove)," with a rider showing 
      that rent as being derived from: a 16% increase over the previous 
      rental, plus "$11.00 new refrigerator [and] $3.00 new stove."  The 
      Administrator requested documentary substantiation of the expenditures 
      for those appliances, but such was not provided.

      The ensuing order, here appealed, states inter alia (1) that the owner 
      failed to document the cost or the installation of improvements to the 
      apartment, and will not therefore be permitted to increase the rent by 
      1/40 of "the amount claimed" and (2) that because "evidence indicates 
      that the overcharge was willful," the overcharge collected after May 21, 
      1988, would be trebled to penalize that willfulness.  A total overcharge 
      of $3,199.05 was found.

      In attacking that order, the owner has attached to its petition a copy 
      of what it states to be the bill of sale for the aforementioned stove 
      and refrigerator, arguing (a) that the tenant's first lease clearly 
      showed that she was aware that her rent would take into consideration an 
      increase for those items, (b) that the aforementioned bill constitutes 
      "further backup to the increase in question" and (c) that there should 
      at any rate be no treble damage penalty, as this overcharge was "clearly 
      not done willfully."

      The tenant responds to the effect that when she signed the lease she was 


      not informed that she would be "charged extra" for a new stove and 
      refrigerator, that when she moved in she found inoperable appliances, 
      that when she told the owner of the situation the owner installed new 
      ones (which the tenant had not requested) without telling her that she 
      would be "charged extra' for them, and that if she had known the owner's 
      intentions, the tenant "would have opted for used working appliances 

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

      Two fundamental rules preclude the owner's taking a rental increase for 
      the aforementioned new appliances.  The first is that the amount paid
      for an improvement must be substantiated and the second, that that 
      substantiation must be before the Administrator, not submitted for the 
      first time on appeal.   Thus regardless of tenant consent, petitioner's 
      proffer of a bill that it never submitted to the Administrator, cannot 
      suffice to win recognition of an improvement-based rental increase.

      There is on the other hand no doubt that those improvements were made 
      and (despite what the tenant now suggests) that they qualify as 
      "vacancy" improvements.  In proving those facts to the Administrator, 
      the owner proved that the rental increase for those improvements did not 
      cause a willful overcharge.  The treble damages herein, which were all 
      attributable to the improvement-based increase in the tenant's initial 
      lease, will therefore be rescinded, and interest will instead be 
      assessed thereon.

      The tenant's assertion that she neither expected nor desired new 
      appliances, finally, is (to the extent it is relevant at all) belied by 
      the fact that she signed a lease specifically mentioning same for a 
      tenancy stated as beginning three days later.

      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 the Administrator's order 
      plus any lawful increases.

      If the owner has already complied with the Rent Administrator's order 
      and there are arrears due to the owner as a result of the instant 
      determination, the tenant is permitted to pay off the arrears in 12 
      equal monthly installments.  Should the tenant vacate after the issuance 
      of this order or have already vacated, said arrears shall be payable 

      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 more than 20 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 to the 
      extent set forth above, the Rent Administrator's order being modified to 
      the same extent.  The total overcharge as of January 31, 1993 (including 
      interest and excessive security deposited) is $1,475.33.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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