HH210026RO


                                  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

                                                 SJR7028
          ------------------------------------X  
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO.  HH210026RO
                                              :  DRO DOCKET NO.  DL210039r

          BRAVE WICKHAM                     

                                PETITIONER    :  Tenant:  Annetta Worrell 
          ------------------------------------X 
                                      
            ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE 
          REVIEW


               On August 16, 1993, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on July 
          14, 1993, by the Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as 
          459 East 45th Street, Brooklyn, New York, Apartment No. 1 wherein 
          the Rent Administrator established the legal regulated rent at 
          $472.61 as of November 1,l990 through October 31, 1992 and directed 
          the owner to refund overcharges of $14,130.78 inclusive of treble 
          damages and excess security.         

                The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2522.4 of the Rent Stabilization Code.

               The issue herein 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 commenced on December 1, 1989 when the 
          tenant filed a complaint of rent overcharge.  The tenant stated that 
          she had commenced occupancy of the subject apartment pursuant to a 
          one year lease commencing November 1,l989 at an initial rent of 
          $570.00.  The tenant also stated  that the owner had included 
          $109.64 for major renovations as specified in the lease rider but 
          that there had been no major renovations.

               In answer to the complaint, the owner asserted that when the 
          prior tenant vacated, the subject apartment was in need of a 
          complete rehabilitation.  To make the housing accommodation 
          liveable, the owner had expended $7000 in rehabilitation and had 
          lost rents while the apartment was vacant during the rehabilitation 
          process.  The owner submitted various documents to substantiate his 
          claim for an individual apartment improvements increase based on 
          tearing out and replacing walls and a ceiling, installing new 







          HH210026RO

          windows and a new floor, new bathroom tiles, a new bathroom closet 
          as well as a new entrance door.  

               In reply, the tenant disputed the veracity of the owner's 
          answer, denying that most of the work had ever been done or if done 
          had been done to repair or to  correct violations.  The tenant 
          alleged that the receipts submitted by the owner did not pertain to 
          the subject apartment.  The tenant further alleged that the 
          apartment was still in a deteriorated condition.

               Subsequent investigation disclosed that a number of repairs had 
          been made in correction of violations cited by the Department of 
          Housing Preservation and Development (HPD).  The owner was notified  
          in a Final Notice of Treble Damages that except for the cost of new 
          windows, the increase for apartment improvements would be disallowed 
          because the work had been done to correct violations. 

               A staff member of the DHCR conducted an on-site inspection and 
          reported that the living room floor had holes and a rotten floor 
          board.  The inspector reported that the front door was  in fairly 
          good condition, that some tiles over the bathtub appeared brighter 
          than others, that the bedroom wall over the window had a crack, that 
          the bedroom paint looked good except for the crack. 

               In response to the final notice, the owner requested a hearing 
          to defend against the finding of a willful overcharge and to prove 
          his entitlement to the rent increase taken.

                In the order here under review, the Administrator permitted a 
          rent increase for the installation of new windows but disallowed an 
          increase for painting, panelling, walling, flooring patches and 
          cosmetic alterations prior to and subsequent to the tenant's 
          occupancy.

               In his appeal, the owner contends that the order should be 
          reversed for the following reasons:

               1.  The owner's request for a hearing was ignored, thereby 
          prejudicing the owner because only a hearing could have brought out 
          all the facts.

               2.  The tenant moved into a completely renovated apartment.  
          The DHCR  disallowed improvements because the Administrator 
          incorrectly found that these improvements were done to correct HPD 
          violations.  The owner could have made simple repairs for the 
          correction instead of completely rehabilitating the apartment.  Due 
          to the extensive rehabilitation, the apartment had been vacant for 
          over six months where simple repairs would have taken only a month.

               3.  Any overcharge found should not have been considered 
          willful because it has been established in prior cases that where an 
          owner has made extensive improvements whose cost is disallowed for 
          a rent increase,  a finding of willfulness is precluded.
               
               4.  The tenant entered into a stipulation of settlement, 
          agreeing to release the owner from all claims.
               5.  The owner has been prejudiced by the time required to 
          process the complaint which led to increased overcharges and  


          HH210026RO

          increased penalties.

               6.  An owner has no way of knowing if the rent being charged is 
          the legal rent until after a tenant files a complaint.

               7.  The tenant receives aid from the Department of Social 
          Services (DSS) .  The tenant should not be enriched when the rent 
          was paid by DSS. 

               8.  The Administrator erred in computing the rent actually 
          paid, in that in November and December, 1989 the tenant paid $5.00 
          less than was credited by the Administrator. From February 1990 
          forward to June 30, 1991, the tenant paid $565.00 per month.  The 
          tenant paid only $150.00 towards the January 1990 rent. 

               In response, the tenant contends that  the apartment was not 
          completely renovated but is still in a deteriorated condition.  Only 
          portions of the floor around the radiator were replaced and even the 
          replacement was not done properly.  Plumbing and wall were replaced,  
          after the tenant took occupancy,  to repair leaks.  DSS assisted in 
          paying the rent for about four months when the tenant was laid off.  
          The tenant contends that the order is correct with respect to the 
          amount of rent paid.

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

               With respect to the owner's request for a hearing, it should be 
          pointed out that due process requires full consideration of all 
          issues raised by the parties to the administrative proceeding.  
          However, the resolution of these issues does not necessarily require 
          an oral hearing which is discretionary and not mandated by law.   
          Where a finding can be made upon evidence and written submissions, 
          as was the case herein, such a hearing is not mandated.

               Section 2522.4  of the Rent Stabilization Code provides in   
          pertinent part that an owner is entitled to a rent increase of 
          1/4Oth of the cost where there has been an increase in services or 
          improvements made to the subject housing accommodation upon written 
          tenant consent.  In the case of vacant housing accommodations, 
          tenant consent is not required.  Where a tenant challenges the rent 
          charged, an owner must submit documentary evidence of his 
          entitlement to the rent increase taken.  No rent increase is 
          permitted for work which is characterized as ordinary repair and 
          maintenance.  Nor is an owner permitted to increase the rent to make 
          up for lost rent while an apartment is vacant so that work can be 
          done.

               Review of the record discloses that the Administrator credited  
          the owner with the cost of the installation of eight new windows 
          which were properly substantiated at $1775.00, entitling the owner 
          to a rent increase of $44.38.  The record corroborates the owner's 
          assertion that a new vanity was installed and that the owner should 
          be permitted to recover its cost with installation, $285.00, or an 
          additional $7.13 per month.    However, the Commissioner finds that 
          the remainder of the work done, regardless of the  time allegedly 
          required to accomplish it, does not constitute improvements for 
          which a rent increase is merited.   Work that is considered ordinary 







          HH210026RO

          repair and maintenance does not qualify for the rent increase 
          contemplated by Section 2522.4 of the Code.  The Administrator did 
          not err in disallowing the increase claimed for for repair work done 
          prior to and while the tenant was in occupancy.  The record does not 
          sustain the owner's assertion that the work done qualifies for a 
          rent increase.  No increase can be permitted for a bathroom ceiling 
          which was repaired to correct a violation.  The inspection report by 
          a DHCR employee does not substantiate the owner's claim that new 
          bathroom tile was installed over three walls.  Various plumbing 
          items and painting and plastering are items of ordinary repair and 
          maintenance and are thus disallowed.  The installation of a new 
          front door occurred during the tenant's occupancy and is 
          disqualified for lack of written tenant consent.  Accordingly, the  
          Commissioner finds that the order should be modified to include a 
          rent increase for the installation of a new bathroom vanity.
           
               The owner is incorrect regarding the application to the instant 
          proceeding of the policy in which treble damages are not imposed, in 
          the absence of other willful conduct, when an owner has made 
          improvements which qualify  for a rent increase but cannot 
          substantiate the exact cost.  Here, however, treble damages are 
          properly imposed because it is found that  the work done does not 
          qualify  pursuant to Code Section 2522.4.

                    The Commissioner notes that the owner was aware of the 
          pending overcharge complaint since December 1989 and could have 
          adjusted the rent while the proceeding was pending until such time 
          as the Administrator's order was issued but chose not to do so.  
          Accordingly, the Commissioner finds the owner's contention regarding 
          the processing time to be without merit.

               Similarly, the owner's contention regarding the method of 
          determining the legal rent is meritless.  An owner has but to look 
          at the rent history or, when appropriate, the registration  and to 
          comply with the Code to know the correct rent. 

               The tenant's arrangement with the Department of Social Services 
          does not affect the owner's obligation to charge legal rents or 
          change the penalty imposed for failing to do so.  However, since the 
          tenant concedes that the DSS paid her rent for four months while she 
          was out of work, four months of the overcharge found is deducted 
          from the refund due the tenant.  A copy of this order is being sent 
          to the DSS which may seek to recover from the owner the refund which 
          it is due.

               A review of the evidence submitted discloses that the owner is 
          incorrect regarding the amount of rent paid by the tenant  The 
          tenant submitted checks, money orders and owner- signed receipts 
          showing that all the rent was paid from November 1, 1989  through 
          May 1, 1992.  However, the evidence submitted supports the owner's 
          contention that the tenant did not begin to pay $604.55 until July 
          1, 1991.  Accordingly that part of  the Administrator's order must 
          be modified.  

               With respect to the stipulaton of settlement cited by the 
          owner, the record shows that the language in the stipulation does 
          not clearly show the tenant's intention to withdraw the overcharge 
          complaint.  Pursuant to Code Section 2520.13, an agreement by a 


          HH210026RO

          tenant to waive the benefit of the Rent Stabilization Law or Code is 
          void.  Such waiver is permissible only where a tenant,  who wishes 
          to withdraw a complaint, is represented by counsel and either the 
          DHCR or a court of competent jurisdiction approves.  The stipulation 
          submitted by the owner does not meet these requirements.

               In accordance with the Commissioner's findings, the Rent 
          Administrator's order is modifed as follows:  

          LEASE TERM    RENT CHARGED    LEGAL RENT   EXPLANATION
          11/01/89-      $575.00        $448.82      Guideline 21:  Rent      
          10/31/90                                   $338.14 + 17.5%          
                                                     for a 2 year vacancy     
                                                     lease + $51.51 for       
                                                     improvements   
                                                 
          .              $565.00        $448.82      New rent payment period  
                                                     starting 1/1/90   

          11/01/90-      $565.00        $480.24      Guideline 22:  Rent      
          10/31/92                                   $448.82 + 7%        

                         $604.55        $480.24      New rent period    
                                                     starting 7/1/91 
          OVERCHARGES
          11/1/89 - 12/31/89------------------$126.18 x 2 mos = $ 252.36  
          1/1/90 -  1031/90-------------------$116.18 x 10 mos =$1161.80  
          11/1/90 - 6/30/91-------------------$ 84.76 x 8 mos = $ 678.08 
          7/1/91 - 10/31/92-------------------$124.31 x 16 mos =$1988.96    
                              Overcharge--------------------$4081.20    
                              Treble Damages----------------$8162.40   
                     Excess security deposit----------------$ 124.31 
          Total refund due:  11/1/89 to 10/31/92 =         $12, 367.91   

          $12, 367.91 minus $1491.72 ( $124.31 per month x 4 mos. x 3 = four 
          months overcharge to be recovered by DSS) = $10,876.19 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 Commissioner has determined in this Order and Opinion that 
          the owner collected overcharges of $10,876.19 from the tenant.  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 







          HH210026RO

          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.

          ISSUED



                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner




                     






























    

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