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. HH210026RO
: DRO DOCKET NO. DL210039r
PETITIONER : Tenant: Annetta Worrell
ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE
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
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
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
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
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
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
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
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
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
. $565.00 $448.82 New rent payment period
11/01/90- $565.00 $480.24 Guideline 22: Rent
10/31/92 $448.82 + 7%
$604.55 $480.24 New rent period
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 =$1988.96
Excess security deposit----------------$ 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
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