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 ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET NO.: BF410426RO
APPEAL OF
CABRINI TERRACE JOINT VENTURE
RENT ADMINISTRATOR'S
DOCKET NO.: UC00003OH
PETITIONER
-------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On June 18, 1987 the above named petitioner-owner timely filed a
petition for administrative review (PAR) against an order issued on
May 15, 1987, by a Rent Administrator (Gertz Plaza) concerning the
housing accommodations known as 900 West 190th Street, New York,
New York, various apartments, wherein the Rent Administrator denied
the owner's application for rent increase pursuant to the
alternative hardship provisions of Section 26-511 c(6-a) of the
Rent Stabilization Law and Section 2522.4 of the Rent Stabilization
Code.
The order of the Rent Administrator, appealed herein, decreased
claimed operating expenses by $9,000.00 to correct a mathematical
error made in the application and increased the total claimed
rental income from rent stabilized apartments by $20,000.00. These
adjustments resulted in a ratio of operating expenses to income of
93.67 percent which is below the 95 percent threshold to qualify
for an alternative hardship rent increase.
In this administrative appeal the petitioner-owner contends, in
substance, that the Administrator's order is in error to the extent
that $20,000.00 was added to the owner's claimed rental income.
Numerous tenants responded to the owner's petition objecting to the
proposed hardship increase and stating that the building had been
converted to a co-operative ownership on December 29, 1986; and
that the owner is deriving income from a garage operation and from
management fees received by its subsidiary.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that this petition should be denied.
ADMIN REVIEW DOCKET NO. BF-410426-RO
In order for an owner to qualify for a rent increase pursuant to
the "Alternative Hardship" provisions of the Rent Stabilization Law
and Code, it is incumbent upon an owner to establish that the
standard rent guidelines adjustments are insufficient for the
property to maintain an annual gross income level which exceeds the
allowable annual operating expenses by an amount equal to at least
five percent of such annual income. The Rent Administrator has the
inherent duty to ascertain the validity of the submissions made in
any application filed pursuant to Section 2522.4 of the Rent
Stabilization Code.
In regard to the owner's petition, the Commissioner notes that in
the instant application the stabilized rental income for the
calendar year of 1984 claimed by the owner is $1,053,038.00. The
Rent Administrator reviewed the financial statement submitted by
the owner from which the above mentioned figure was derived and
correctly adjusted the amount of the rent stabilized income to
include an additional $20,000.00. The aforementioned financial
statement, Note E- Rent Stabilization Settlement provides that the
owner had refunded, to rent stabilized tenants a total of
$231,000.00 in excess rent and security deposits collected pursuant
to a settlement with the Office of the Attorney General of which
$20,000.00 was credited to stabilized tenants during the 1984
calendar year. Section 2522.4(c) of the Rent Stabilization Code
states that the annual gross rental income collectible shall
consist of the actual income receivable per annum arising out of
the operation and ownership of the property including but not
limited to the rental income from housing accommodations. In this
regard the Commissioner notes that rental income collected must be
consistent with lawful guideline levels; that refunds or credits of
excess rent or overcharges collected do not constitute a normal
recurring item qualifying as a deduction from rental income; and
that an owner may not receive the benefit of a hardship rent
increase as a consequence of having been required to refund or
credit monies collected in prior years in excess of the lawful
stabilized rent.
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ADMIN REVIEW DOCKET NO. BF-410426-RO
The Commissioner finds that the Administrator properly determined
that the applicable rent guideline increases established under the
Rent Stabilization Law are sufficient to maintain an annual gross
rental income collectible from the subject premises by an amount
that exceeds the annual operating expenses equal to at least five
percent of such annual income.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is
ORDERED, that this petition be, and the same hereby is, denied; and
that the Rent Administrator's order be, and the same hereby is,
affirmed.
ISSUED:
____________________
Joseph A. D'Agosta
Deputy Commissioner
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