STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
-------------------------------------X ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET NO.: BF430262RO
GABSONS MANAGEMENT CO.
DOCKET NO.: AA400176OM
ORDER AND OPINION REMANDING PROCEEDING ON APPEAL
The above-named petitioner-owner timely filed a Petition for
Administrative Review (PAR) against an order issued on May 15, 1987
by the Rent Administrator (Gertz Plaza), concerning the housing
accommodations known as 79 West 12th Street, New York, NY, wherein
the Administrator partially granted, in part, the owner's MCI
application for major capital improvement rent increases.
The issue in this appeal is whether the Administrator's order was
The owner commenced this proceeding below on January 16, 1986 by
initially filing a major capital improvement rent increase
application seeking to increase the rent of controlled and
stabilized apartments based upon various installations of a new
roof, refuse compactor, parapet stone replacement,
pointing/waterproofing and window perimeter caulking at a claimed
cost totalling $240,100.00.
The Rent Administrator's order, appealed herein granted rent
increase adjustments based on allowable cost totaling $44,200.00,
as determined by J-51, for those items recognized as major capital
improvements (roof, compactor, parapet stone replacement, pointing
and waterproofing). The owner was denied a rent increase for
window perimeter caulking as it did not qualify for an MCI rent
In its petition, the owner contends, in substance, that the rent
increase adjustment should have been based on its total claimed
cost of $240,100.00.
After a careful consideration of the entire record, the
Commissioner is of the opinion that this proceeding should be
remanded to the Administrator for further appropriate processing.
ADMIN. REVIEW DOCKET NO. BF-430262-RO
Rent increases for major capital improvements are authorized by
Section 2522.4 of the Rent Stabilization Code for rent stabilized
apartments. Under rent stabilization, the improvement must
generally be building-wide; depreciable under the Internal Revenue
Code, other than for ordinary repairs; required for the operation,
preservation, and maintenance of the structure; and replace an item
whose useful life has expired. Piecemeal work or ordinary repairs
and maintenance does not constitute work for which a rent increase
adjustment is warranted under current and past procedures.
A review of the record reveals that the owner properly filed the
MCI application in the proceeding below, and no showing to the
contrary has been made by the affected parties.
Turning to the merits of the subject petition for administrative
review, the record in the proceeding below discloses that the owner
submitted with its MCI application certain documentation including
copies of contracts, contractors' certifications, proposals and
cancelled checks for the work herein, in support of such
The Commissioner notes that the J-51 program is governed by an
independent body of law and regulation. Thus the Administrator
improperly substituted a J-51 Reasonable Cost as certified for tax
abatement purposes in lieu of those costs submitted by the owner's
contractors. Accordingly, the Commissioner deems it appropriate to
remand this proceeding to the Administrator for further processing
so as to recompute the authorized rent increase based on the
owner's costs which are found to be properly substantiated and
The Commissioner further notes that window perimeter caulking was
properly found not to constitute a major capital improvement. Nor
does it constitute other directly related work performed in
conjunction with a qualifying major capital improvement.
THEREFORE, pursuant to the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, granted to
the extent of remanding this proceeding to the Administrator for
further processing in accord with this order and opinion. The
order and determination of the Administrator remains in full force
and effect until a new order is issued on remand.
Joseph A. D'Agosta