DHCR Decisions
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
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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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