STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. HC610014RO
: DRO DOCKET NO.
Residential Management Inc. ZDE610459R
TENANT: Jose & Maureen
PETITIONER : Mendoza
ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE
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
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