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.: BH410289RT
DOCKET NO.: AB530090OM
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On August 28, 1987 the petitioner-tenant timely filed a petition
for administrative review (PAR) against an order issued on July 31,
1987 by a Rent Administrator (Gertz Plaza) concerning the housing
accommodations known as 5057 Broadway, Apartment 44, New York, New
York, wherein the Rent Administrator determined that the owner was
entitled to a rent increase based on the installation of a major
capital improvement (MCI).
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 this administrative appeal.
The owner commenced this proceeding on February 13, 1986 by
initially filing an application for a rent increase based on the
installation in August 1985 of a new boiler/burner at a total cost
Three tenants objected to the owner's MCI application stating, in
substance, that the new boiler was inefficient; that the old boiler
operated properly, and one tenant objected to the MCI increase
stating that the owner should pay for the boiler.
On July 31, 1987 the Rent Administrator issued the order here under
review finding that the installation qualified as an MCI,
determining that the application complied with the relevant laws
and regulations based upon the supporting documentation that was
submitted by the owner, and authorizing rent increases for rent
controlled and rent stabilized apartments.
The tenant in Apartment 44 filed a petition for administrative
review objecting to the MCI increase on the grounds that he was the
first rent stabilized tenant in the apartment and that the free
market rent for the apartment included the MCI increase. He stated
he moved into the apartment in August 1986, after the installation
of the boiler/burner.
ADMIN. REVIEW DOCKET NO. BH-410289-RT
After careful consideration of the entire record, the Commissioner
is of the opinion that the petition should be granted.
Rent increases for major capital improvements are authorized by
Section 2202.4 of the Rent and Eviction Regulations for rent
controlled apartments and Section 2522.4 of the Rent Stabilization
Code for rent stabilized apartments. Under rent control, an
increase is warranted where there has been since July 1, 1970 a
major capital improvement required for the operation, preservation,
or maintenance of the structure. 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.
With regard to the petitioner's contention that he should not be
obligated to pay the MCI rent increase because he took occupancy of
the apartment after the installation of the boiler/burner and after
the application was filed, the record discloses that the subject
apartment was still rent controlled as of May 1986. The petitioner
herein, Douglas Meyer, is the first stabilized tenant of record of
said apartment. The tenant moved into the apartment initially
paying a free market rent, which included any and all services then
being provided, including the new boiler/burner. Accordingly, the
Commissioner finds that the owner is precluded from collecting the
MCI rent increase from this tenant and all subsequent tenants of
the subject apartment.
The owner is hereby directed to refund to the tenant within 30 days
of the date of issuance of this order any overpayment of rent
arising as a result of this order and opinion. This determination
is without prejudice to the tenant filing a complaint of rent
overcharge, if the facts so warrant and the owner has not complied
with the above-stated directive.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
ORDERED, that the petition be, and the same hereby is granted, that
the Rent Administrator's order under Docket No. AB530090OM be, and
the same hereby is, modified to the extent of excluding the present
and all future tenants of the subject apartment from the rent
increase; and that as so modified, said order be, and the same
hereby is, affirmed.
Joseph A. D'Agosta