STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: ART04151L
MITCHELL ROSE, et al. RENT ADMINISTRATOR'S
DOCKET NO.: OM4612
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On May 1, 1985 the above-referenced tenant filed a petition seeking
administrative review of an order issued on April 4, 1985, by a Rent
Administrator in the Columbus Circle office of the D.H.C.R., in which the
Administrator had granted the owner permission to increase the rents at the
housing accommodation known as 324 East 9th Street, New York City, based on
the owner's completion of a major capital improvement ("MCI").
This proceeding originated when the owner filed with the predecessor of the
D.H.C.R., on April 15, 1983, his application for the aforementioned
permission, based on the installation of a new boiler with integral burner.
The application included a listing of each apartment in the building along
with the tenant's name and rental amount; one such entry is for "M. Kizyma
(Super)", with the rent left blank.
The above-referenced tenant responded to that application by stating in
pertinent part: "The replacement of a broken boiler has got to be
considered within the realm of normal expected building maintenance and in
no way, in my opinion, constitutes a building improvement."
In the ensuing order, here appealed, the Rent Administrator determined that
the "new boiler burner and boiler" constituted an MCI within the meaning of
the code and regulations allowing rental increases therefor.
In this petition the tenants allege, in substance, that because the
previous system provided utterly inadequate heating, "the work done
constitutes normal building maintenance" rather than a capital improvement;
that the absence of a superintendent and long-term vacancy of two
apartments, render incorrect the Administrator's calculation of the size of
the rental increase allowed herein; and that the subject order refers to a
new oil burner while the appliance in fact burns gas.
After careful consideration of the entire record, the Commissioner is of
the opinion that this petition should be denied.
Rent increases for major capital improvements are authorized by Section
2202.4 of the Rent and Eviction Regulation for rent controlled apartments
and Section 2522.4 of the Rent Stabilization Code for rent stabilized
apartments. Under rent control, an increase is warranted where there has
been since July 1, 1970 a major capital improvement required for the
operation, preservation, or maintenance of the structure. Under rent
ADMIN. REVIEW DOCKET NO.: ART04151L
stabilization, the improvement must be generally building-wide; depreciable
under the Internal Revenue Code, other than for ordinary repairs; required
for the operation, preservation, and maintenance of the structure; and
replace an item whose useful life has expired. It is the established
position of the Division that the installation of a new heating system
meets the definitional requirements of a MCI. In fact the tenants concede
that the condition of the old system was such that a new boiler/burner was
required for the operation, preservation and maintenance of the structure.
Turning to the second assignment of error, the Administrator's calculations
included the subtraction of one apartment from the total number in the
building, because it was occupied rent-free by the superintendent. The
petition ascribes error to that substraction, stating that "there has been
no superintendent since at least 1975." Although served with the
application and notice of Commencement of Proceeding advising that the
entire application and supporting documentation was available for review in
the superintendent's or resident manager's office, the tenants made no
mention of that entry or that such office did not exist. Since this issue
was not raised in the proceeding before the Administrator said allegation
may not, in accordance with the applicable provisions of the Code and
administrative precedent, be considered for the first time on appeal. The
Commissioner notes that the Administrator ascribed an appropriate rental
value to other apartments in the subject premises including owner occupied
residential and commercial space.
Whereas the record confirms that the heating installation entailed a new
gas rather than an oil burner, said point provides no grounds to disturb
the subject order, for neither the granting of this MCI increase nor the
amount thereof depends on whether the subject installation burns oil or
gas. This apparent mistake of the Administrator, in other words,
constitutes harmless error calling for no action by the Commissioner.
Based upon the entire evidence of record, the Commissioner finds that the
Administrator properly found the new boiler/burner qualified as a MCI; and
that said order should be affirmed.
THEREFORE, in accordance with the Rent Stabilization Law and Code, and the
Rent and Eviction Regulations for New York City, it is
ORDERED, that this petition be, and the same hereby is denied and the Rent
Administrator's order be and the same hereby is affirmed; and it is further
ORDERED, that tenants of stabilized apartments who may owe the temporary
retroactive portion of the rent increase which was stayed by the filing of
the Petition for Administrative Review may pay such portion of the
retroactive increase as may now be due and owing in a manner consistent
with the Administrator's order or in six (6) equal monthly installments,
which ever would result in the earlier payment of such arrears.
LULA M. ANDERSON