HI410021RT
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
------------------------------------X S.J.R. NO. 7329
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. HI410021RT
: DRO DOCKET NO. ZEG410242R
RICHARD GENOVA
PETITIONER :
------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN
PART
On September 7, 1993, the above-named petitioner-tenant filed
a Petition for Administrative Review against an order issued on
August 3, 1993, by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York, concerning the housing accommodations known as 98
Charlton Street, New York, New York, Apartment No. 23, wherein the
Rent Administrator determined that the owner had overcharged the
tenant.
Subsequent thereto, the petitioner-tenant filed a petition in
the Supreme Court pursuant to Article 78 of the Civil Practice Law
and Rules requesting that the "deemed denial" of his administrative
appeal be annulled. This proceeding was then remitted to the DHCR
for a determination of the petitioner's appeal.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2526.1 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 by the tenant's filing of a rent
overcharge complaint in July, 1990 in which he stated in substance
that he first moved to the subject apartment on May 1, 1989 at a
rental of $611.00 per month and that the $175.63 rent increase
(included in the $611.00 initial rent) due to apartment improvements
was excessive. These improvements were specified in the May 1, 1989
lease as follows: new kitchen, windows, new floor in the kitchen,
new walls and ceiling in the living room and bedroom, new stove and
shower.
In response to the tenant's complaint, the owner submitted
inter alia bills and cancelled checks to substantiate the following
work in the subject apartment: $373.47 for a new stove which
included a charge for the removal of the old stove; $1325.00 for the
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installation of five new thermal break windows with new wood molding
and aluminum trim; $441.66 for a new shower body; $1200.00 for the
installation of a floor in the kitchen and painting and plastering
of the entire apartment; $5000 for the supply and installation of
upper and lower kitchen cabinets; plumbing for the kitchen sink;
framing, sheetrock and taping on walls and ceiling in bedroom and
living room; enclosure for shower and plumbing fixtures.
In reply to the owner's response, the tenant stated in
substance that he questioned the installation of a new kitchen floor
and that he later installed a new tiled kitchen floor himself; and
that he felt the bill for $5000 was grossly inflated in that the
cabinet work consisted of using a few nails to attach a sheet of
1/2" plywood to a kitchen wall and a minimum number of wood screws
to hold the cabinets to the plywood; that the cabinets fell down
within one year until the tenant secured them to the brick wall with
proper bolts and cleats; and that the plumbing and framing for the
shower enclosure could not have involved more than a minimum amount
of work since the main plumbing fixtures already existed and the
enclosure is only a rectangular wooden box less than two feet long.
Subsequently, the owner submitted an itemized breakdown of the
$5000 bill from Branko Peros Woodworking, Inc. as requested by the
DHCR. Such breakdown was as follows:
1. Removing old kitchen cabinets; repair walls - $400.00
2. Supplied and installed new kitchen cabinets and kitchen sink -
$2,750.00
3. Plumbing related to hook up of sink and fixtures in kitchen -
$400.00
4. Labor and material in connection with new sheetrock of walls and
ceilings in the bedroom and living room - $450.00
5. Built shower enclosure in bathroom; installation of shower (labor
only) and related plumbing - $1,000.00
In Order Number ZEG4100242R, the Rent Administrator determined
that the tenant had been overcharged in the amount of $672.51
including interest during the period from May 1, 1989 through July
31, 1993. The Rent Administrator also determined the May 1, 1989
lawful stabilization rent to be $600.83. Such amount took into
account $7140.13 in improvements - all improvements claimed by the
owner with the exception of the painting and kitchen floor.
In this petition, the tenant alleges in substance that the
$5000 bill submitted by the owner is so grossly inflated that it
strongly suggests fraud; that the tenant caused an independent
appraisal of the work to be done by "Ross Fixtures" which disclosed
that at the most such work should have cost $2600.00; that since the
owner supplied the shower body and the plumbing fixtures, there is
a claim for plumbing work not done; that it is incredulous that the
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owner would claim that a woodworking company did plumbing work for
the subject apartment; that the work claimed was not performed; that
the costs are not substantiated; and that the imposition of treble
damages is warranted especially in light of the fact that the DHCR
found that no new floor was installed by the owner although the
owner claimed such installation.
In answer to the tenant's petition, the owner stated in
substance that the petition was not timely filed; that the tenant's
petition raises no new issues; that the owner did install a new
floor although the amount of the rent increase for a new floor was
denied by the Rent Administrator; that the owner did not file a
petition against this aspect of the order because it was a small
amount and it wanted to see this matter come to an end; that
statements by the tenant's contractors are self serving; that the
owner has submitted bills and cancelled checks to substantiate the
improvements made so that the tenant's petition should be dismissed.
In rebuttal and in a supplement to his petition, the tenant
stated in substance that the $5000 bill was grossly inflated and
submitted a bill from another independent contractor - "Zimco
Construction" - showing the work done could be done for less than
half of $5000; that he doesn't understand how a woodworking company
could claim $1400 in plumbing charges for hooking up a sink and
shower; and that the shower enclosure is in the kitchen whereas on
the contractor's estimate it is listed as being in the bathroom.
The Commissioner is of the opinion that this petition should be
granted in part.
Contrary to the owner's contention, the record including the
postmarked envelope in which the tenant's petition was submitted,
discloses that said petition was timely filed within the required 35
day period.
An examination of the records in this case discloses that the
owner submitted copies of a bill, an itemized breakdown, and
cancelled checks in support of the $5000 expenditure made to Branko
Peros Woodworking, Inc. The fact that the tenant was able to secure
estimates from other contractors that they could do the work
performed by the owner's contractor for less does not establish
fraud on the part of the owner. The Rent Stabilization Law and Code
does not require the owner to secure the lowest cost for an
improvement but does require that the owner substantiate the costs
claimed which the owner has done in this case. It is further noted
that the shower enclosure was built in the kitchen rather than the
bathroom but the fact that the contractor's brakedown incorrectly
listed the shower enclosure as being in the bathroom rather than the
kitchen does not establish that the work was not done - it is clear
from the record that a shower enclosure was built in the kitchen.
Further the fact that the Rent Administrator did not give a rent
increase for the kitchen floor does not mean, as the tenant
contends, that the owner never had a kitchen floor installed.
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Rather this item was considered by the Rent Administrator as mere
repairs and maintenance - it would be impossible to now inspect the
kitchen floor and see exactly what was done by the owner because the
tenant has stated that he himself at a later date installed his own
kitchen floor. Further it is noted that just because the owner's
contractor is listed as Branko Peros Woodworking, Inc. does not mean
that it could not perform plumbing work in the subject apartment.
However, the Commissioner has examined the breakdown of charges
submitted by Branko Peros Woodworking, Inc. and finds that the labor
and material in connection with new sheetrock of walls and ceilings
in the bedroom and living room should not have been allowed since
this should be considered as repairs and maintenance. This part of
the work claimed amounts to $450.00.
Taking the above factor into account, the Commissioner has
recalculated the lawful stabilization rents and the amount of the
rent overcharge. The lawful stabilization rents and the amount of
the rent overcharge are set forth on the amended rent calculation
chart attached hereto and made a part hereof.
With regard to the issue of whether treble damages should have
been imposed, the Commissioner notes that the overcharge was in fact
caused by the owner's compounding of guideline increases in the same
guidelines period as shown by the owner's answer to the tenant's
complaint dated August 14, 1990 in which the owner stated that it
could add a guideline increase over the prior tenant's rent in
determining the rent of the tenant herein. However, this was
impermissible because the prior tenant's last lease was in the same
guidelines period as the initial lease of the tenant herein.
Pursuant to Policy Statement 89-1, this is considered a
hypertechnical error for which the imposition of treble damages is
not warranted. If it had not been for this error, there would have
been no overcharge taking into consideration the allowable rent
increase for the vacancy improvements.
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 $1441.03. 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
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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.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
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