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
APPEALS OF DOCKET NOS.: ART09176U
: ART09177L
ANA J. DELA CRUZ
ROSA ARRIAGA RENT ADMINISTRATOR'S
PETITIONER : DOCKET NO.: USC000425OM
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ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
The above-named petitioner-tenants timely filed administrative appeals
against an order issued on March 26, 1986 by the Rent Administrator (92-31
Union Hall Street, Jamaica, New York) concerning the housing accommodations
known as 335 Wadsworth Avenue, New York, New York, various apartments,
wherein the Administrator granted major capital improvement (MCI) rent
increases for the controlled and stabilized apartments in the subject
premises based on the installation of a new burner and boiler, new concrete
on the backyard, main entrance doors, a new intercom system, a new roof and
new aluminum replacement windows. The Administrator disallowed
expenditures for the sealing dumbwaiters, new mailboxes installed in the
same location and a metal fence and gate.
In their petitions the tenants contend, in substance, that the MCI rent
increases should be denied because the work was necessitated by the
previous owner's failure to maintain the premises and building repairs are
still needed, specifically water pressure and electricity repairs; tht the
dumbwaiters were already sealed before the improvements were made the fence
and gate were not installed and there is no light in the basement and
therefore these items should not be considered part of the improvements;
that "the aggregate annual increase for all MCI orders pertaining to a
building should be limited 6%" per year; that the rent increase should not
be added to the base rent or become a permanent part thereof; and that the
temporary increase combined with the permanent increase results in a
financial hardship.
In response the asserts, insubstance, that the Administrator's order limits
the collection of the rent increase to 6% for stabilized apartments; that
the limitation for controlled apartments is 15%; and that the fence and
gate were not approved for an MCI rent increase and the tenants are not
being charged for these items.
The Commissioner is of the opinion that these petition should be denied.
Rent increases for major capital improvements are authorized by Section
2202.4 of the Rent and Eviction Regulations for rent controlled apartments
and Section 2522.4 of the Rent Stabilization Code for rent stabilized
apartments. Under rent control, and increase is warranted where there has
been since July 1, 1970 a major capital improvement required for the
ADMIN. REVIEW DOCKET NO.: ART 09176-U
operation, preservation, or maintenance of the structure. Under rent
stabilization, the improvement must generally be 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.
The Commissioner notes that the petitioner-tenants have not raised
objections to the quality or adequacy of the installations in their
administrative appeals.
Regarding the contention that water pressure and electricity repairs are
needed, such claim which refers to items unrelated to the installation, is
not the subject of a rent reduction order previously issued by DHCR and the
Rent Administrator for properly exercised discretion in granting part the
owner's application for a rent increase.
Regarding the tenants' contention that the sealed dumbwaiters, the fence
and gate and the basement with no lights should not be considered part of
the improvements, the record indicates that expenditures for the
dumbwaiters, the fence and the gate were disallowed. There is no
indication that the basement was considered in the determination.
Regarding the contention that the rent increase for all MCI orders should
be limited to 6% per year, Section 26-516 of the Rent Stabilization Law
provides in pertinent part, that the collection of certain rent increases
including increases for major capital improvements, "shall not exceed six
percent in any year from the effective date of the order granting the
increase over the rent set forth in the schedule of gross rents, with
collectibility of any dollar excess above said sum to be spread forward in
similar increments and added to the stabilized rent as established or set
forth in future years." The annual limitation for rent controlled
accommodations is 15% as contained in Operational Bulletin 84-4.
In the instant case DHCR records show that no MCI rent increases were
granted prior to the subject increase. Accordingly, the Administrator
properly indicated in the herein appealed order that collection of the
15.92% rent increase for stabilized apartments was limited to 6% for the
first 12 month period. The Commissioner notes that the Administrator
advised the owner that collection of the rent increase for controlled
apartments "shall not exceed 15% for the first 12 month period, with the
balance spread to subsequent years so as not to exceed 15% in any 12 month
period."
Regarding the contention that the MCI rent increase should not form a
permanent part of the rent structure, the Commissioner notes that the
permanent nature of the increase has been upheld by the Court of Appeals of
the State of New York in Matter of Ansonia Residents Associates v. DHCR.
Regarding the contention that the rent increase will be financially
burdensome, the Commissioner is not unmindful of the possibility that the
ADMIN. REVIEW DOCKET NO.: ART 09176-U
rent increase may prove burdensome to some tenants. However, the
Commissioner is constrained by the applicable statutory and regulatory
provisions to grant such increases as are warranted.
THEREFORE, in accordance with the provisions of the Rent Stabilization Law
and Code, and the Rent and Eviction Regulations for the City of New York,
it is
ORDERED, that these petitions be, and the same hereby are, denied; and that
the order of the Rent Administrator be, and the same hereby is, affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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