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. BF 430135-RT,
: BF 420250-RT
VARIOUS TENANTS OF 115 and
119 WASHINGTON PLACE, NEW YORK RENT ADMINISTRATOR'S
NEW YORK PETITIONERS : DOCKET NO.: AC 430062-OM
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ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN
PART AND REMANDING PROCEEDING TO THE RENT ADMINISTRATOR
FOR FURTHER CONSIDERATION
On June 18, 1987, the above named petitioner tenants filed Petitions
for Administrative Review against an order issued on May 15, 1987 by a
Rent Administrator concerning housing accommodations known as various
apartments of 115 and 119 Washington Place, New York, New York, wherein
the District Rent Administrator determined that the owner was entitled
to a rent increase based on the installation of major capital
improvements.
The issue in these appeals is whether the District Rent Administrator's
order was warranted.
The applicable sections of the law are Section 2522.4 of the Rent
Stabilization Code and Section 2202.4 of the New York City Rent and
Eviction Regulations.
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 appeals.
This proceeding was commenced on March 5, 1986 by the owner's filing of
an application for a rent increase based on the installation of major
capital improvements (MCI's) to wit: a new intercom system at a total
cost of $2,152.00; a new chimney at a total cost of $1,550.00; and
rewiring at a total cost of $40,320.00.
The owner certified that on May 31, 1986 he served each tenant with a
copy of the application and also placed a copy of the entire
application including all required supplements and supporting
documentation with the resident superintendent of 115 Washington Place.
Numerous tenants filed objections to the owner's application,
contending in substance that the owner was negligent in not maintaining
the chimney and should therefore bear the cost for replacing the
chimney; the old buzzer system was adequate and in good working order;
the new intercom system did not work in all of the apartments; the
rewiring was a maintenance and repair item rather than an improvement;
the rewiring was partial and mainly installed in the kitchens of the
DOCKET NUMBER: BF 430135-RT
the building; in most apartments no new plug sockets were added to any
rooms other than the kitchen; the rewiring was done in an unworkmanlike
manner with some cables exposed, some sockets coming out of the wall
and/or being inoperable; some light fixtures were becoming defective;
ceiling had holes and sloppy plastering; and many tenants had their own
220 line for air conditioning which they had paid for themselves.
The owner responded by claiming that one socket was hooked up to a
light switch in each room; that auxiliary air conditioning outlet was
installed in each apartment and that the workmen cleaned up the trash,
plaster, dirt and rubble before leaving the subject buildings.
In Docket No. ZAC 430062-OM dated May 15, 1987, the District Rent
Administrator determined that the rewiring and intercom systems
qualified as major capital improvements and accordingly authorized rent
increases of $4.02 per room for rent-controlled tenants and 2.97% for
rent stabilized tenants. The administrator further determined that the
chimney repairs did not constitute a major capital improvement.
In these petitions, the tenants contend in substance that the District
Rent Administrator's order is incorrect and should be reversed because
the rewiring was very minimal with only the kitchens being affected in
most apartments and with no additional wiring in the other rooms; most
tenants had to install their own air conditioning lines; and some of
the apartments have suffered a diminution of service as a result of the
rewiring with non-working sockets, light fixtures and exposed cables.
The tenants also reiterate their original answers to the owner's MCI
application.
On February 6, 1992, the Administrative Review Unit of the Division of
Housing and Community Renewal requested that the subject buildings be
inspected as to the adequacy and extent of the rewiring and intercom
installations. The subject premises was inspected on March 24 and 25,
1992 wherein the inspector noted that the intercom system was
functioning properly and that generally the apartments had been
adequately rewired with the exception that in several apartments there
were no wall switches, only pull chains, for livingroom, bathroom and
in some instances kitchen ceiling lights. The inspector further noted
that several apartments were lacking electrical outlets sufficient to
support the installation of air conditioners.
After careful consideration of the entire record, the Commissioner is
of the opinion that these petitions should be granted in part, and the
proceeding remanded for further processing as described herein below.
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
DOCKET NUMBER: BF 430135-RT
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 Divifor an electrical upgrading to qualify
as an MCI under current procedures, the job requires the installation
of new electric service (capacity), with new copper risers and feeders
extending from the property box in the basement to every housing
accommodation of the sufficient capacity to accommodate the
installation of air conditioner circuits as well as the installation of
a double duplex outlet in the kitchen to accommodate heavy duty
appliances (as performed in the case herein). In addition, the tenants
must be given the option of having air conditioning outlets installed
in the apartments at cost to the tenants.
The record herein discloses that the owner substantiated its MCI
application for the rewiring work in the proceeding below by submitting
to the Administrator copies of the contractor's certification, and
certificate of electrical inspection from the bureau of electrical
control for the work in question. However, it appears that, contrary
to the contract, as submitted by the owner, air conditioning outlets
were not installed on a building-wide basis nor were all the tenants
afforded an opportunity to have such outlets installed by the owner
and, in fact, several tenants have installed their own outlets.
Accordingly, the Commissioner is of the opinion and finds that the
Administrator's order should be modified in that so much of the MCI
rent increase attributable to the installation of air conditioner
outlets in each apartment should be revoked. Accordingly, the total
previously approved cost of $42,472.00 is reduced in the amount of
$1,920.00 which represents the claimed cost of the air conditioner
outlet installation. The above adjustment results in a reduced rent
increase of $3.84 per room per month for rent controlled tenants and
2.84% of the August 1, 1986 rent for rent stabilized tenants, (computed
in accordance with the formula set forth in the Administrator's order).
The owner is of the further opinion that the Administrator's order
should be further modified in the following mannertachment to MCI Order
for
Rewiring annexed herein, to wit:
The owner is to notify the tenant that the tenant shall, within 30 days
of receipt of the notice, notify the owner whether he/she wishes to
have an air conditioner outlet installed where there is none yet
existing, which request shall be limited to the living rooms and
bedrooms. For the above-mentioned tenants, as well as those for whom
heavy-duty air conditioner outlets were installed as part of the
origional rewiring installation, the tenants shall be offered the
option of paying outright the current cost of installing each heavy
duty air conditioning outlet installed by the owner in which event
there shall be no monthly increase in rent for each installation and
such one-time charge shall not be deemed a part of the monthly rent for
the purposes of renewal; or, in the alternative, the tenant may elect
a monthly increase in the monthly rent, in which event the rent may be
increased by 1/60th of the cost of the air conditioning outlets upon
completion of the installation without further order of the Rent
Administrator. Any questions arising in the course of complying with
this order may be brought to the attention of the Rent Administrator.
DOCKET NUMBER: BF 430135-RT
DOCKET NUMBER: BF 430135-RT
The Commissioner further notes that the inspection also revealed that
the intercom system, in those petitioners' apartments for which access
was gained and an inspection conducted, was functioning properly.
The Commissioner is therefore of the opinion that this proceeding
should be remanded for a recalculation of the appropriate rent
increases to which the owner is entitled for the installation of the
new intercom only.
The owner is advised that any excess rent collected from the tenants is
to be completely refunded to them within 30 days of the issuance of
this order.
THEREFORE, in accordance with the Rent and Eviction Regulations for New
York City and the Rent Stabilization Law and Code, it is
ORDERED, that so much of the Administrator's order as granted a rent
increase for the electrical installation be, and the same hereby is,
revoked, and it is, further
ORDERED, that the owner shall refund to the tenants any excess rent
arising as a result of this order within 30 days of the date of
issuance hereof, and it is further
ORDERED, that these petitions be, and the same hereby are, granted to
the extent of remanding these proceedings to the District Rent
Administrator for further processing in accordance with this order and
opinion. The order and determination of the Rent Administrator remains
in full force and effect in all other respects until a new order is
issued on remand.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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