Adm.Review Docket No.: BE 430122 RT
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 SJR 6137
IN THE MATTER OF THE
ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BE 430122 RT
VARIOUS TENANTS,
DRO DOCKET NO.: LC 000018 AR
PETITIONER
OWNERS:
-------------------------------X Former: MOTT & PRINCE, INC.
c/o THOMAS SUNG
(52-56 Henry St.)
Current: DR. JAMES C.W. MOY
(52 & 54 Henry St.)
LAN KWONG
(56 Henry St.)
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
The above-described petitioner-tenants timely refiled a Petition
for Administrative Review against an order issued on March 30,
1987 by the Rent Administrator at Gertz Plaza, Jamaica, New York,
concerning housing accommodations known as various apartments at
number 52, 54 and 56 Henry Street, New York, New York, wherein
the Administrator affirmed the orders issued by the District Rent
Director for the Lower Manhattan District Rent Office of the
Office of Rent Control, Office of Rent and Housing Maintenance of
the New York City Department of Housing Preservation and
Development (the agency formerly charged with enforcing the City
Rent Law) wherein the rents of various rent controlled tenants
residing in the subject buildings were restructured (increased)
under 9 NYCRR 2202.12 (formerly Section 33.9 of the Rent and
Eviction Regulations)
Subsequently, the tenants filed an Article 78 Proceeding in
Supreme Court, New York County, in the nature of an application
for a writ of mandamus, requesting that a determination of the
Petitioner's administrative appeal be issued.
Thereafter, pursuant to a stipulation, the matter was remanded to
the Division for further processing.
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 in the administrative appeal.
Adm.Review Docket No.: BE 430122 RT
The issue herein is whether the appealed order, which was issued
on March 30, 1987, under Docket Number LC 000018 AR was issued in
accordance with the mandate contained in the order and opinion
of August 20, 1984, issued under Docket Number SPTA 22,478-500,
wherein the proceedings assigned Docket Numbers 2ACS 1204-1235
were remanded to the District Rent Administrator.
The Commissioner notes that the tenants of three apartments which
were apparently not subject to rent control when the orders
affirmed by the appealed order were issued (that is, on March 23,
1984) have joined in the Petition for Administrative Review. The
Commissioner finds that the affirmed orders were issued by the
Office of Rent Control, which had no jurisdiction over rent
stabilized apartments; and therefore, the Commissioner finds that
the tenants of apartments numbered 13 and 14 at 54 Henry Street
and the tenant(s) of apartment number 7 at 56 Henry Street have
no standing in these proceedings and may not be deemed parties
hereto.
The proceedings herein were originally commenced on October 11,
1983, by the filing, by the former owner, of applications to have
the rents of the subject apartments restructured based on the
fact that it had obtained rehabilitation loans with respect to
each of the three subject buildings under Article 8A of the New
York Public Housing Finance Law. In said applications, the owner
alleged that the funds obtained through said loans had been
utilized to rehabilitate said buildings.
In response to said applications, various individual tenants and
the tenant representative for the tenants of all three buildings
submitted statements in opposition. In substance, the tenants
alleged that the former owner had failed to complete all of the
work in a workmanlike manner; that there were conditions (some of
which had a connection with the specific components of the
subject rehabilitations and some of which did not) in each of the
buildings which constituted a decrease in services and/or a
failure to provide all essential services; and that the proposed
restructured rents were excessive and/or had been miscalculated.
On March 23, 1984, the aforementioned District Rent
Administrator issued a separate order increasing the rent of each
of the affected apartments, in accordance with the certification
of the 8A Program Director, as to the present rent, the amount
of the increase and its effective date. In summary, all of the
affected apartments in 52 Henry Street had their rents increased
by 32.40 per room per month; at 54 Henry Street the increase was
$ 30.81 per room per month; and at 56 Henry Street, the increase
was $32.78 per room, per month.
The tenants filed an administrative appeal against the orders of
March 23, 1984. On appeal the Commissioner found that many of the
objections asserted by the tenants on appeal had not been
asserted before the District Rent Administrator and that the
Administrator should reconsider the appealed orders in the light
of those objections. In the order and opinion remanding the
proceeding to the Administrator, the Commissioner directed the
Commissioner to "evaluate the case in accordance with the
applicable law as well as current administrative policy."
Adm.Review Docket No.: BE 430122 RT
On November 24,1986, a Notice of Proceeding To Reconsider Order
Pursuant To Remand was sent to the parties by the Administrator.
In that Notice, the Administrator stated that he proposed to
reopen the rent restructuring proceedings to "determine whether
the improvements made to various apartments in the subject
building[s] with an 8A Loan under the Private Housing Finance
Law were performed in accordance with the applicable law as well
as current administrative policy." In said Notice the
Administrator afforded the parties an opportunity to file an
answer to the action which the Administrator was proposing to
take.
The record herein indicates that both the owner and the tenants'
attorneys (MFY Legal Services, Inc.) requested and received
extensions of time to submit answers to the November 26, 1986
Notice, but that neither of them submitted any such answer. The
record also indicates that two tenants individually answered the
Notice. One tenant did not directly address the issues, but
expressed a reluctance to relocate. The other tenant asserted
that there was no gas service at said tenant's apartment, 1RW, at
52 Henry Street; that due to a gas leak , which the owner was
allegedly refusing to repair, Consolidated Edison had shut off
the gas several months ago. Said tenant also alleged that the
intercom was inoperable. The record also contains a letter from
the then Director of the 8A Loan Program at the New York City
Department of Housing Preservation and Development wherein he
stated : "Kindly be informed that the improvements made to
various apartments in the subject building [52, 54 and 56 Henry
Street] , with an 8A Loan under the Private Housing Finance Law,
were performed in accordance with the applicable law as well as
current Administrative policy."
Thereafter, the Administrator issued the appealed order. The
appealed order simply stated that the orders which had been
issued on March 23, 1984, and which had been appealed and
remanded under an order and opinion dated August 20, 1984, were
affirmed.
In the Petition now before the Commissioner, the tenants, by
their above mentioned attorneys, assert, in substance, that the
appealed order is defective in that it does not set forth the
basis upon which it is issued; and that the orders it affirmed
were issued in contravention of the Private Housing Finance Law,
the Rent and Eviction Regulations and the constitutional and
civil rights of the affected tenants. They also assert that the
Department of Housing Preservation and Development (HPD) Rules
and Regulations for the processing of loans under Article 8A of
the Private Housing Finance Law were not adhered to herein; and
that the HPD Rules for restructuring proceedings do not conform
to the requirements of the Private Housing Finance Law and the
Rent and Eviction Regulations.
The owner has not filed an answer to the Petition.
The Commissioner is of the opinion that the Petition should be
denied.
The Commissioner notes that, in implementing the provisions of 9
Adm.Review Docket No.: BE 430122 RT
NYCRR 2202.12, as it relates to the restructuring of rents upon
the acquisition of a rehabilitation loan under Article 8A of the
Private Housing Finance Law, the Directors of the District Rent
Offices and (after the State assumed the task of enforcing the
City Rent Law) the Rent Administrators placed great weight on the
certifications of the Director of the 8A Program in determining
to issue an order restructuring the rents. Indeed, the
Commissioner notes that it was not the policy of the Office of
Rent Control to look behind the Program Director's certification
and inquire into the transaction between the lender and the
borrower, or the calculation of the restructured rents, as long
as the certification itself appeared regular on its face. The
appropriateness of that reliance in cases such as this was
subsequently underscored by the legislature with the addition of
Subdivision 7 to Section 452 of the Private Housing Finance Law
(added by Chapter 777, Section 3, Laws of 1986) which gave HPD
the power to adjust rents based solely on the debt service the
owner-borrower had to meet and notwithstanding the provisions of
any regulation promulgated under the Emergency Tenant Protection
Act of 1974, the City Rent Law, or the Local [State] Emergency
Housing Rent Control Law.
The District Rent Administrator clearly followed the policy in
effect at the time the March 23, 1984 orders were issued when he
issued them upon the certification by the Program Director that
the loans in question had been made. Having done so, the
Commissioner finds, the District Rent Administrator issued those
orders in conformity with 9 NYCRR 2202.12 and the current
administrative policy.
The mandate given to the Administrator by the order and opinion
of August 20, 1984, was to determine whether or not the
restructuring orders had been issued in accordance with the
applicable law and the current administrative policy. As the
Commissioner now finds that the original restructuring orders
had met those criteria, the Commissioner, finds that the appealed
order, wherein the restructuring orders were affirmed, was
properly issued and should be affirmed.
THEREFORE, in accordance with all of the applicable laws and
regulations, it is
ORDERED, that this Petition be, and the same hereby is, denied;
and that the Administrator's order be and the same hereby is
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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