IE210007RP (ARL08946K)

                                  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
                                            SJR 2829 (Remit)
                                            SJR 7283 (Mandamus)
     IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
     APPEAL OF                              DOCKET NO. IE210007RP (ARL08946K)

           Kings Highway Property Corp.  :  DISTRICT RENT OFFICE
          (c/o  Mid State Management        DOCKET NO. K3102770R
           Corp./Charles Mehlman),                     CDR 14033
                                           
                                            TENANT: George Briggs           

                           PETITIONER    : 
     ------------------------------------X                             

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                       IN PART

     On March 24, 1986 the above-named petitioner-owner filed a Petition for 
     Administrative Review against an order issued on March 13, 1986 by the Rent 
     Administrator, 10 Columbus Circle, New York, New York concerning the housing 
     accommodations known as Apartment 2F, 3900 Kings Highway, Brooklyn, New York 
     wherein the Rent Administrator determined that there had been an overcharge 
     and ordered a refund.

     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.  

     The tenant commenced this proceeding in March, 1984 by filing an overcharge 
     complaint with the New York City Conciliation and Appeals Board, the 
     predecessor of the DHCR, based in part on an alleged failure by the owner to 
     provide a complete rental history and in part on an additional monthly charge 
     for a washing machine,

     In answer to the complaint, the owner stated that there was no overcharge and 
     submitted a set of rent ledgers, but no actual leases.

     In Order Number CDR 14,033 the Rent Administrator determined that the 
     additional charge for the tenant-owned washing machine constituted an evasion 
     of the Rent Stabilization Laws under Section 62A of the former Rent 
     Stabilization Code, found an overcharge of $221.07, and ordered a refund with 
     interest.

     In its petition, the owner contended that the Rent Administrator's order was 
     incorrect and should be modified because the washing machine charges were 
     reasonable pursuant to Section 20C(1) of the former Rent Stabilization Code, 
     in light of certain higher costs to the owner, even though the tenant paid 
     for his own electricity.  In addition, it contended that the rule allowing a 
     monthly charge for a tenant-owned air conditioner in a building where the 
     tenant pays for his own electricity should be applicable to a washing machine 
     as well.






     IE210007RP (ARL08946K)


     In answer to the petition, the tenant contended that the order should be 
     upheld.

     In an order issued on October 8, 1987 the Commissioner modified the 
     Administrator's order to the extent of allowing a surcharge of $1.00 per 
     month, the same as allowed under the system of rent control, which would not 
     become part of the base rent or be subject to Guideline increases.

     Subsequent thereto, the petitioner owner filed a petition in the Supreme 
     Court pursuant to Article 78 of the Civil Practice Law and Rules challenging 
     the Commissioner's order.  Justice Aronin revoked the Commissioner's order 
     and remanded the matter for reconsideration and adjustment of the surcharge 
     to a higher amount.

     Subsequent thereto, the petitioner owner filed a petition in the Supreme 
     Court pursuant to Article 78 of the Civil Practice Law and Rules requesting 
     that the DHCR be mandated to make an expeditious determination.

     The Commissioner is of the opinion that that the owner's petition for 
     Administrative Review should be granted in part.


     DHCR policy is now that no surcharges are allowable for appliances, other 
     than air conditioners.  This is designed to stop evasive practices for all 
     manner of appliance approvals conditioned on charges which may or may not 
     bear any relationship to actual costs to an owner.  An owner can insist that 
     an appliance, approval for which was conditioned on the payment of a 
     surcharge, be removed, or an owner and tenant can agree to have the owner 
     install a new appliance and charge a monthly increase of 1/40th the cost, 
     without any additional charge for hot water, etc.

     In the present case the DHCR is constrained by a court order to approve a 
     surcharge, in some amount above the $1.00 per month previously allowed.  An 
     internal DHCR analysis in 1989 and 1990 of available information suggested 
     that a surcharge of $7.46 not included in the base rent was appropriate as of 
     January 1, 1990 for a tenant-installed washing machine where a tenant paid 
     for his or her own electricity.  In the present case there would have been no 
     overcharge found in the previous orders if the owner had not collected an 
     increase for the washing machine.  (The lawful permanent rent in the lease 
     from December 1, 1980 to November 30, 1983 is $347.20, a 17% increase over 
     the base date rent of $296.75, and the lawful permanent rent in the lease 
     from December 1, 1983 to November 30, 1985 is $371.50, a  7% increase over 
     $347.20.)  Even though the owner included the increase for the washing 
     machine in the base rent, rather than making it a surcharge, the Commissioner 
     considers the increases charged in the leases in the record to be reasonable, 
     and finds no overcharge through November 30, 1985.

     However, the complainant vacated, and it is not known if the owner is 
     charging the current tenant for use of a washing machine.  If the owner is 
     surcharging the current tenant, or is still including a washing machine 
     charge in the base rent, the owner is hereby given 60 days to drop such 
     charge, which will be considered an overcharge if the owner continues to 
     collect it.  Presuming that the lease includes a clause prohibiting a tenant- 
     owned washing machine, the owner may insist that the current tenant 
     discontinue such use, or the owner and tenant may agree to have an owner- 
     installed machine at a 1/40th increase, with no additional increase for hot 
     water or other claimed increased costs to the owner.  A copy of this order is 
     being sent to the current tenants.



     IE210007RP (ARL08946K)



     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 ($371.50 in the lease from December 1, 1983 to 
     November 30, 1985) plus any lawful increases, specifically including the 
     removal within 60 days of any charges or increases due to use of a tenant- 
     owned washing machine.

     THEREFORE, in accordance with the Rent Stabilization Law and Code, it is 

     ORDERED, that this petition be, and the same hereby is, granted in part and 
     that the Rent Administrator's order 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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