DHCR Decisions
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.: BF430238RO
APPEAL OF
BARBARA DESNOO
RENT ADMINISTRATOR'S
DOCKET NO.: LS000023OH
PETITIONER
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On June 11, 1987 the above named petitioner-owner filed a Petition
for Administrative Review against an order issued on May 29, 1987
by the Rent Administrator (Gertz Plaza) concerning the housing
accommodations known as 221 E. 26th Street, New York, New York,
various apartments, wherein the Administrator denied the owner's
application for rent increases 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 disallowed
$1,127.64 of the owner's claimed expenditures and increased the
total rental income from stabilized apartments by $593.80. These
adjustments resulted in a ratio of operating expenses to income of
93.7 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 as it fails
to detail the basis for the increase in rental income and the items
and the basis upon which the $1,127.64 in expenditures were
disallowed.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that this petition should be denied.
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 rent 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.
ADMIN. REVIEW DOCKET NO. BF-430238-RO
The Commissioner notes that in the instant application the
stabilized rental income for the calendar year 1984 was determined
to be $43,143.05, plus the total amount of the senior citizen tax
abatement for apartment 1D and the imputed rental value of
apartment 4B while it was vacant for one of two months. The Rent
Administrator found the rental value of apartment 4B to be the
amount of one month's rent at the time the unit first became
reoccupied, which is $593.00. However, the Commissioner notes that
the Rent Stabilization Code, Section 2522.4 (c) (2) (vi) states
that the rental value of unoccupied housing accommodations at the
owner's choice for more than one month is the value of the last
regulated rent plus the minimum number of rent guidelines increases
or, if no such regulated rent existed or is known, the DHCR shall
impute a rent equal to the average of rents for similar or
comparable housing accommodations subject to this Code in the
building during the test year.
The rental value of the unoccupied apartment 4B for one month has
been re-calculated pursuant to the above Code section (by averaging
the monthly rent of rent stabilized apartments with the same number
of rooms as apartment 4B during the period in question) to be
$418.41. This adjustment to the rental income of rent stabilized
apartments, results in a total rental income value of $40,410.50.
Furthermore, the Commissioner notes that the instant application
lists a sum of $50,430.17 in operating expenses. The Rent
Administrator reviewed the itemized expenses and properly
disallowed the following amounts as unsubstantiated expenses:
$25.00- fees; $180.00- necessary contracted services; $704.22- non
capital repairs; and $195.00- parts and supplies, in view of the
owner's failure to submit paid invoices and cancelled checks
identifiable to the subject premises although afforded the
opportunity to do so.
Additionally, the Rent Administrator disallowed $23.42 in
management fees claimed by the owner as expenses. However,
management fees allowed have been re-calculated due to the
adjustment in rental income (six percent of the gross rental
income) to be $2,613.69. The net adjustment in expenditures result
in recognized total operating expenses of $49,327.64. The amount of
the operating expenses apportioned to rent stabilized rooms is
$38,051.34.
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ADMIN. REVIEW DOCKET NO. BF-430238-RO
The ratio of the recalculated operating expenses to rental income
apportioned to rent stabilized accommodations is 94 percent which
is below the 95 percent threshold required to qualify for an
alternative hardship increase.
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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