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
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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 :
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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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