AJ 110309 RT
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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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: AJ 110309 RT
FELICIA POZIT,
DRO DOCKET NO.: ZQS 000843 OM
PETITIONER
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ORDER AND OPINION GRANTING ADMINISTRATIVE APPEAL IN PART
AND
REMANDING PROCEEDING ON APPEAL
On October 27, 1986 the above-named petitioner-tenant filed an
Administrative Appeal against an order issued on September 22,
1986 by the District Rent Administrator (Gertz Plaza, Jamaica,
New York) concerning the housing accommodations known as 65-09
99th Street, Queens, New York, Various Apartments, wherein the
Administrator granted Major Capital Improvement (MCI) rent
increases for the stabilized apartments in the subject premises
based on the installation of new boiler/burner, replacement
windows, compactor, waterproofing, and roofing at the premises.
The owner commenced the proceeding below by filing its MCI
application with the Administrator in October of 1985. In
response to the application, various tenants submitted answers
stating, among other things, that:
(1) The new windows are defective;
(2) there is a discrepancy between the number of
windows in the building and the number of
windows stated as being replaced;
(3) there should be a Division of Housing and
Community Renewal (DHCR) inspection of the
premises;
(4) only one half of the building benefited from
a single new compactor; and
(5) there are two professional apartments and a
garage at the subject premises, whose rental
should be included in the rent roll submitted
by the owner.
The District Rent Administrator's order, appealed herein, granted
AJ 110309 RT
the landlord's application, stating that the tenants' objections
were not tenable.
On appeal, the petitioner-tenant contends, in substance, that:
(A) A number of tenants in the building were not
served with the MCI application;
(B) the installation of the improvements masked
years of failure to repair and constituted
deferred maintenance;
(C) the landlord is unjustly enriched by the
addition of the MCI increase to the base rent
as a permanent increment;
(D) the landlord will be unjustly enriched by tax
abatements which the DHCR failed to take into
account in fixing the MCI increases;
(E) in many instances, the window installation
was shoddy and incomplete;
(F) the heat and hot water services in the
building are insufficient;
(G) the landlord contracted for windows at an
inflated price;
(H) the landlord has exaggerated the numbers of
windows claimed in the subject MCI
application;
(I) the landlord's MCI application did not state
the percentage of the increase requested for
the stabilized tenants but instead stated a
dollar per room amount which is based on the
rent control formula;
(J) the replacement of a single compactor which
only covers one half of the building cannot
constitute a building-wide improvement; and
(K) the landlord filed an inaccurate rent roll
which failed to reflect the commercial
apartments in the building.
In support of her contentions, the petitioner submitted a copy
of an advertisement which quoted a window price package.
In response to the tenant's appeal, the owner filed an answer
stating, in substance, that:
(I) Copies of the owner's application were served
on all the tenants of record at the time of
the application;
(II) the owner has observed all of the DHCR's
AJ 110309 RT
rules and regulations relating to MCI
applications, and a petition or
administrative review is not the proper
forum in which to raise objections to the
rules and regulations of DHCR;
(III) the subject building has been properly
maintained and it is not unusual that a
building's boiler and windows require
replacement after more than 35 years of use;
(IV) all of the required documentation was
submitted by the owner;
(V) the tenants have not complained about the
quality of the work;
(VI) there are no problems with the heat and hot
water in the building, the landlord is not
aware of any tenant complaints, and the
petitioner did not identify any apartments
where such services are alleged to be
deficient;
(VII) the windows installed in the building are
competitive in price with comparable windows,
and it is impossible to determine if the
windows cited by the tenants are at all
comparable to the windows installed by the
landlord;
(VIII) the landlord did not exaggerate the number of
windows installed;
(IX) the tenants were properly notified of the
percentage rent increase sought by the
landlord in Supplement III to Form RA-79,
which was always available for review by the
tenants in the office of the building
superintendent;
(X) the replacement of a single compactor does
constitute an improvement to the entire
building; and
(XI) the owner's application disclosed the only
two professional apartments in the building.
After a careful consideration of the entire evidence of record
the Commissioner is of the opinion that the administrative appeal
should be granted in part and this proceeding remanded to the
Administrator for further processing in accordance with this
order and opinion.
The record discloses that the owner submitted documentation in
the proceeding below to substantiate the MCI application,
including copies of contracts, proposals, contractors'
certifications, cancelled checks, and governmental approvals and
AJ 110309 RT
sign-offs for the work in question. Furthermore, the owner filed
a certification of service upon the tenants of a copy of the MCI
application and numerous tenants filed answers in the proceeding
below.
As to the tenants' contention pertaining to the permanent nature
of the increases granted, the New York Court of Appeals has
concluded that the Rent Stabilization Law authorized this
Division to grant permanent rent increases for MCI's and that the
law does not limit the time during which the increases can be
imposed. In the Matter of Ansonia Residents Association, et al,
v. DHCR, et al. In addition, the provisions of the law regarding
the partial offset of tax benefits against an MCI increase apply
only to improvements commenced after June 28, 1988. Finally, the
tenant failed to establish by adequate documentation (such as a
specific estimate for the window installation involved herein)
that the window installation costs were excessive.
However, the record also discloses that the order appealed herein
failed to consider the contentions raised by the tenants with
regard to:
(a) The annual commercial rents collected by the
owner;
(b) the quality of the window installation;
(c) the number of windows actually replaced; and
(d) the compactor installation not serving the
entire building.
Thus, the Commissioner is of the opinion that this proceeding
should be remanded to the Administrator for such further
processing as is necessary to resolve these issues.
THEREFORE, in accordance with the applicable provisions of the
Rent Stabilization Law and Code and Operational Bulletin 84-1,
it is
ORDERED, that this petition be and the same hereby is granted to
the extent of remanding this proceeding to the District Rent
Administrator for further processing in accordance with this
order and opinion. The automatic stay of so much of the
District Rent Administrator's order as directed a retroactive
rent increase is hereby continued until a new order is issued
upon remand. However, the Administrator's determination as to a
prospective rent increase is not stayed and shall remain in
effect until the Administrator issues a new Order upon remand.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
AJ 110309 RT
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