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 









          HI410021RT





          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 


          HI410021RT

          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.  







          HI410021RT

          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 


          HI410021RT

          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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