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.: BE 430192-RO
:
122-126 ST. MARKS PLACE ASSOC.c/o RENT ADMINISTRATOR'S
REHAB ASSOCIATES DOCKET NO.: AC 430019-OM
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
The above-named petitioner-owner timely filed a Petition for Administrative
Review against an order issued on May 15, 1987 by the Rent Administrator,
Gertz Plaza, Jamaica, New York, concerning housing accommodations known as
122-126 St. Marks Place, New York, New York, various apartments.
The owner initiated the proceeding below on March 5, 1986 by filing an
application for a major capital improvement rent increase based on the
installation of pointing at a total claimed cost of $14,900.00. In
response to the application, various tenants filed answers objecting to the
proposed increase without any complaints pertaining to the installation.
The order of the Administrator appealed herein denied the application based
on the fact that the evidence on record indicated that all exterior walls
of the subject building were not pointed.
On appeal, the petitioner-owner requests a reversal of the Administrator's
order and contends, in substance, that the fact a building is made
watertight by any means of pointing should always be deemed building-wide;
that pointing and waterproofing is rarely ever performed over every square
inch of surface area and usually only done to areas where water is
infiltrating into the building; and that the new Rent Stabilization Code
stated that if the owner can satisfactorily demonstrate to the DHCR that
certain of such similar components did not require improvements, such
installation should qualify as a major capital improvement.
In response to the owner's petition, various tenants filed answers stating,
in substance, that the decision of the Rent Administrator was fair and
should be upheld because: (1) a major portion of the exterior walls of the
subject buildings was never pointed; (2) cosmetic repairs were made in an
attempt to stop leaking in some apartments, but these were, for the most
part, ineffectual; and (3) the building was not rendered watertight as the
leaks which the supposed pointing was supposed to correct still exist.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that the Administrative appeal should be
granted.
ADMIN. REVIEW DOCKET NO.: BE 430192-RO
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, 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
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 record contains a diagram indicating the extent to which the exposed
sides of the subject building were pointed and a contractor's statement
that all exposed sides of the building were examined and
pointing/waterproofing performed wherever necessary. It is the established
position of the Division that pointing/waterproofing performed where
necessary and also comprehensive in nature constitutes a major capital
improvement for which a rent increase adjustment may be warranted, provided
the owner otherwise so qualifies. The record further notes that the owner
and the contractor both certified that approximately 9,000 square feet of
pointing was done on all exposed sides of the building both above and below
the parapet line. As such, the work should have been considered to be
comprehensive enough to qualify for treatment as a major capital
improvement. It was therefore improper for the Rent Administrator to
disallow the cost for pointing and waterproofing because all exterior walls
of the subject buildings were not pointed.
The Commissioner notes that no rent reduction order based on the owner's
failure to maintain services of a building-wide nature is outstanding
against the subject premises as of the time of issuance of this order nor
have any service complaints been filed by the tenants either prior to or
subsequent to the issuance of the order appealed herein.
In view of the foregoing, the Commissioner finds that this proceeding
should be granted and that the owner is entitled to a rent increase of
$0.94 per room, per month, (claimed cost $14,960.00 less sales tax of
$400.00 = $14,560.00 less commercial tenants share $3,452.18 = $11,107.82 -
60 months = $185.13 - 196 rooms = $0.94) effective for rent stabilized
apartments as of June 1, 1986 (the first rent payment date 30 days after
service of the application on the tenants) and effective for rent control
tenants as of June 1, 1987, (the first of the month following issuance of
the Administrator's order).
The tenants may pay any arrears resulting from this order to cover the
period between the effective dates of the increase (June 1, 1986 and June
1, 1987) provided for herein and the date of issuance of this order of the
Commissioner subject to the statutory limitation on collectibility of 6%
(of the 2/86 rent roll) for the permanent increase plus 6% for temporary
arrears and 15% (of the June 1, 1987 rent roll) with respect to rent
controlled apartments.
ADMIN. REVIEW DOCKET NO.: BE 430192-RO
THEREFORE, in accordance with the Rent Stabilization Law and Code, and the
New York City Rent and Eviction Regulations, it is
ORDERED, that this petition be, and the same hereby is granted; that the
order of the Rent Administrator be, and the same hereby is revoked; and
that the rent of the rent stabilized and rent controlled apartments be, and
the same hereby are increased as hereinabove provided subject to the
limitations on collectibility set forth herein.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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