ADM. REVIEW DOCKET NOS. BD420018RT ET AL.


                                  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


          ------------------------------------X
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW
          APPEALS OF                              DOCKET NOS. 
                                                  BD420018RT
           DOROTHY ECKHAUS, ALICE ASHLEY,         BD420088RT
           HELEN DOERFLER, AND SYLVIA TUCKER,     BD420090RT
                                                  BE410026RT
           
                                  PETITIONERS     DISTRICT RENT 
          ------------------------------------X   ADMINISTRATOR'S DOCKET NO.
                                                  LC000087AC

          ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN 
          PART AND REMANDING THE PROCEEDING TO THE ADMINISTRATOR

               In April, 1987, the above-mentioned tenants filed petitions 
          for administrative review of an order issued on March 26, 1987 by 
          a Rent Administrator, concerning various housing accommodations in 
          the premises known as 7 Park Avenue, New York, New York.

               The Commissioner finds that the above-mentioned petitions 
          involve common issues of law and fact.  The Commissioner is 
          accordingly of the opinion that they should be consolidated for 
          disposition.

               The Commissioner has reviewed all of the evidence in the 
          record and has carefully considered that portion of the record 
          relevant to the issues raised by the petitions for administrative 
          review.

               The subject landlord filed an application, dated December 27, 
          1985, for a Labor Cost Adjustment (L.C.A.) to the maximum rents of 
          the subject apartments for the 1984-1985 period.  The landlord's 
          application alleged that there were eighteen union employees 
          employed at the subject building consisting of:  one 
          superintendent, three porters, ten elevator operators, one 
          handyman, two deskmen, and one painter.

               On December 27, 1985, the subject landlord filed, with the 
          rent agency, a statement from a certified public accountant which 
          verified the data contained in the above-mentioned L.C.A. 
          application.














          ADM. REVIEW DOCKET NOS. BD420018RT ET AL.

               In March, 1986, several tenants submitted responses to the 
          above-mentioned L.C.A. which alleged, among other things, that the 
          subject building's two deskmen and the painter were not union 
          members, and that the painter was recently fired.  One tenant 
          submitted a response which raised the issue of whether the painter 
          was a full-time employee.

               On March 26, 1987, the Administrator issued the order under 
          review herein, under Docket No. LC000087AC, which increased the 
          maximum rents of the subject apartments to reflect uncompensated 
          labor costs incurred by the subject landlord, pursuant to Section 
          2202.11 of the City Rent and Eviction Regulations.

               In their petitions several tenants assert, among other things, 
          that there is no painter on the building's staff; that the two 
          deskmen are not union employees; that there has been periodic 
          lapses in services, and that some of the tenants state that they 
          "should not shoulder the burden for the rest of the tenants" in 
          having to pay rent increases to pay for the building employees.

               In one tenant's petition she asserts, among other things, that 
          the granting of the landlord's application, in this proceeding, is 
          a financial burden on senior citizens living on a fixed income.

               On October 2, 1987, the subject landlord submitted a response 
          to the above-mentioned tenant's petition, in which it asserted, 
          among other things, that the painter, as noted in the landlord's 
          L.C.A. application, "was on the staff of the building" for a brief 
          period; that the deskmen were not union members, and that the 
          superintendent was a union employee of Local 32-B.

               After careful consideration, the Commissioner finds that the 
          tenants' petitions should be granted in part and that this 
          proceeding should be remanded to the Administrator for the 
          recalculation of the tenants' rents.

               The Rent and Eviction Regulations were amended in 1970 to 
          provide for the establishment of the Maximum Base Rent system.  
          Included in the formula for establishing Maximum Base Rents is an 
          allowance for payroll expenses.  Section 2202.11 of the City Rent 
          and Eviction Regulations provide that maximum rents may be 
          increased where an owner incurs, or is obligated to incur, payroll 
          expenses for building service employees which exceed the formula 
          provision for labor costs recognized in establishing the maximum 
          gross building rental under Section 2201.4 of the City Rent and 
          Eviction Regulations.




               As to the tenants' assertion that some of the building service 
          employees are not union members, the Commissioner points out that 






          ADM. REVIEW DOCKET NOS. BD420018RT ET AL.

          union membership is not a factor in determining whether the cost of 
          an employee is included in calculating labor cost adjustments to 
          the maximum rents.

               As to the tenants' statement that the rent control tenants 
          "should not shoulder the burden for the rest of the tenants" in 
          having to pay rent increases due to the Administrator granting the 
          landlord's L.C.A. application, the Commissioner is of the opinion 
          that that statement is misguided.  While it is true that only the 
          rent controlled tenants had their rents increased as a result of 
          the Administrator granting the L.C.A. application, the Commissioner 
          points out that in calculating the increase in maximum rents the 
          labor costs were divided equally amongst all of the rent controlled 
          and non-rent controlled apartments, and commercial premises 
          contained in the subject building.

               As to the tenants' assertion that the increase in maximum 
          rents resulting from the granting of the landlord's L.C.A. 
          application will result in a financial hardship to the tenants who 
          are senior citizens living on a fixed income, the Commissioner 
          finds that that assertion does not raise any issues which would 
          warrant the revocation of the Administrator's order under review 
          herein.

               The Commissioner points out that the Administrator's order 
          under review herein stated that:  "if you are a tenant holding a 
          valid Senior Citizen Rent Increase Exemption Order, you are not 
          required to pay any portion of this increase which causes the 
          monthly rent to exceed one third of your monthly disposable 
          income."

               As to the issue of the painter, the Commissioner notes that, 
          in general, building service employees are those whose duties are 
          that of superintendent, janitor, handyman, elevator operator, 
          doorman and porter regularly employed throughout the year.  
          Building service employees do not include employees hired for 
          temporary purposes, those hired as vacation replacements, or those 
          hired as repair and maintenance personnel, i.e. painters, plumbers, 
          carpenters, etc. and management or office personnel.  The 
          Commissioner further notes that the above-mentioned classification 
          of building service employees is a long established policy followed  
          by the rent agency and the predecessor agency of the Division of 
          Housing and Community Renewal in administrating the various 
          statutes providing for the regulation of housing.




               Accordingly, the Commissioner finds that, in this proceeding, 
          the painter is not a building service employee for the purpose of 
          calculating labor cost adjustments to the maximum rents.













          ADM. REVIEW DOCKET NOS. BD420018RT ET AL.

               Even if a painter were classified as a building service 
          employee, the Commissioner is of the opinion that the cost of the 
          painter in this proceeding should still be disallowed in 
          calculating labor cost adjustments to the maximum rents.

               The record reflects that the subject landlord did not list a 
          painter as a building service employee in its application for a 
          L.C.A. to the maximum rents for the 1982-1983 period, filed under 
          Docket No. 2AOM34240.

               The Commissioner points out that the landlord admits, in its 
          response to the tenants' petitions, that the painter was employed 
          in the subject building for a brief period, and that several 
          tenants, in their petitions, point out that the painter is no 
          longer employed in the subject building.

               Accordingly, the Commissioner finds that the painter, in this 
          proceeding, was hired by the landlord for a temporary purpose.

               As the painter in this proceeding is not classified as a 
          building service employee for the purpose of calculating labor cost 
          adjustments, and that the painter was hired for a temporary 
          purpose, the Commissioner finds that the Administrator's order 
          under review herein should be modified for the purpose of 
          disallowing the cost of the painter in calculating labor cost 
          adjustments to the maximum rents.

               As the Commissioner has modified the Administrator's order 
          under review herein, the Commissioner is of the opinion that this 
          proceeding should be remanded to the Administrator for the 
          recalculation of the labor cost adjustments to the maximum rents in 
          accordance with this order and opinion, and for the issuance of new 
          determinations of the maximum rents and maximum base rents (MBR's).  
          The Commissioner is further of the opinion that this proceeding 
          should be remanded to the Administrator for the ministerial act of 
          adjusting the subject apartments' maximum base rents (MBR's), if 
          such adjustments are determined to be necessary; and to update the 
          subject apartments' MBR's and maximum rents in accordance with any 
          subsequent orders of eligibility issued by the rent agency.

               As to the tenants' assertion that there has been periodic 
          lapses in services, the Commissioner finds that the tenants' remedy 
          is to file an application with the rent agency for a reduction in 
          rent due to a diminution of services, if the facts so warrant.


               THEREFORE, in accordance with the City Rent and Rehabilitation 
          Law and the Rent and Eviction Regulations, it is 

               ORDERED, that these petitions be, and the same hereby are, 
          granted in part, and that the Administrator's order, issued under 
          Docket No. LC000087AC, shall be modified in accordance with this 






          ADM. REVIEW DOCKET NOS. BD420018RT ET AL.

          order and opinion; and it is

               FURTHER ORDERED, that these proceedings be, and the same 
          hereby are, remanded to the Administrator to recalculate the labor 
          cost adjustments to the maximum rents; to issue new determinations 
          listing the maximum rents and MBRs; for the ministerial act of 
          adjusting the subject apartments' MBRs, if such adjustments are 
          determined to be necessary, and to update the subject apartments' 
          MBRs and maximum rents in accordance with any subsequent orders of 
          eligibility issued by the rent agency.  The previously issued order 
          remains in full force and effect until a new order is issued on 
          remand.

          ISSUED:
                    
                                                                   
                                        JOSEPH A. D'AGOSTA  
                                        Deputy Commissioner                 
                              






    

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