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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BI220230RO
:
DANIEL SUGRUE RENT ADMINISTRATOR'S
DOCKET NO.: AD220192OM
PETITIONER :
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ORDER AND OPINION GRANTING IN PART PETITION
FOR ADMINISTRATIVE REVIEW
On September 18, 1987, the above named petitioner-owner timely
filed a petition for administrative review (PAR) against an order
issued on September 7, 1987, by a Rent Administrator (Gertz Plaza)
concerning the housing accommodations known as 6803 Owls Head
Court, Brooklyn, New York, various apartments, wherein the
Administrator denied the owner's major capital improvement (MCI)
rent increase application upon a finding that a partial roof
replacement did not constitute an 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.
In this petition, the owner contends, in substance, that a complete
new roof was installed covering 1360 square feet; that the total
roof area is 1515 square feet; however, the remaining uncovered
portion represents the skylight area.
In response to the owner's petition, the tenant of apartment 2B
alleges, in substance, that the entire roof was not replaced, and
that the repair work was not completed by professionals.
After careful consideration of the entire record, the Commissioner
is of the opinion that this petition should be granted in part.
Rent increases for MCIs 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
stabilization apartments. Under rent control, an increase is
warranted where there has been since 1970 an MCI 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.
ADMIN. REVIEW DOCKET NO.: BI220230RO
It is the established position of the Division that the
installation of a new roof meets the definitional requirements of
an MCI for which a rent increase may be warranted, if the owner
otherwise so qualifies.
The evidence of record in the instant case discloses that a new
roof was in fact installed at the subject premises which covered
the entire roof area (1360 square feet) except for the skylight.
Thus, the Commissioner finds that the Administrator erred in
denying the owner's MCI application on the mistaken grounds that
only a partial roof replacement had occurred.
However, the record also indicates that the roof installation was
done by the owner's son with a helper; that the cancelled check
($2,000.00) submitted as proof of payment was made out to the
owner's son (Daniel Sugrue, Jr.) and that the owner's son resided
at the same address as his father (as indicated on the bill
submitted by the owner). Due to the absence of an arms-length
transaction between the owner and the contractor, and the fact that
there was no cost breakdown of labor and materials for the work in
question, the Commissioner finds that the total allowable cost for
the roof installation should be limited to $1360.00 (out of a total
claimed cost of $2,000.00). Therefore, the owner is entitled to a
rent increase of $1.13 per room per month ($1360.00 divided by 60
months divided by 20 rooms).
For rent controlled apartments, said increase is effective October
1, 1987, the first rent payment date after the issuance of the
Administrator's order under appeal. For rent stabilized
apartments, said increase is effective August 1, 1986, the first
rent payment date one month after service of the owner's MCI
application on the tenants. The owner is entitled to collect
temporary arrears in addition to the permanent rent increase.
THEREFORE, in accordance with the applicable provisions of the Rent
Stabilization Law and Code and the Rent and Eviction Regulations
for the City of New York, and Operational Bulletin 84-1, it is
ORDERED, that this administrative appeal be, and the same hereby
is, granted in part; that the Administrator's order be, and the
same hereby is, revoked; and that the rent of the rent stabilized
and rent controlled apartments be, and the same hereby are,
increased as hereinabove provided subject to the attached
conditions which are fully made a part of this order. The tenants
may pay any arrears in rent arising as a result of this order in
twenty-four equal monthly installations.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
ADMIN. REVIEW DOCKET NO.: BI220230RO
CONDITIONS
1. If a Rent Reduction Order is currently in effect for any
apartment(s) in the bulding due to the owner's failure to provide
or maintain services, any rent increase herein, affecting such
apartment(s) which is to be effective on or after the effective
date of the rent reduction, will be non-collectible from such
apartment(s) until a Rent Restoration Order has been issued, and
will only be collectible from the effective date of the rent
restoration.
Any portion of an MCI order which has take effect prior to the
effective date of the Rent Restoration Order is collectible by the
owner.
2. For the increase granted by this Order to be collectible
during the term of the current lease: a) the lease must contain
a provision authorizing the collection of an increase pursuant to
a DHCR order; and b) where the application for this increase was
pending prior to the commencement date of a vacancy lease, the
increase granted in this Order is collectible only if such lease
contains a specific provision regarding the application pending
before the Division of Housing and Community Renewal, citing the
Docket Number assigned, the basis for the application, and that any
increase granted pursuant to a DHCR Order would be effective during
the term of the lease. In the absence of same, the increase is not
collectible until the expiration of the lease term in effect at the
time the order is issued.
3. If the tenant of a rent stabilized apartment is to move from
the building on or after the effective date of this Order, the
owner may immediately charge that tenant the full increase for the
period during which the tenant was in possession on or after such
effective date.
4. A tenant who has a valid Senior Citizen Rent Increase
Exemption (SCRIE) is exempt from that portion of the MCI increase
which causes the rent to exceed 1/3 of the total disposable
household income. If the MCI increase caused the rent of any
Senior Citizen to exceed 1/3 of his or her income for the first
time, such tenant may apply for a SCRIE to the NYC Department of
the Aging by calling (212)240-7000.
5. As to any apartment which was subject to Rent Control at the
time the instant application was filed and which subsequently
became subject to Rent Stabilization jurisdiction, the Commissioner
notes that since the free market rent charged the first stabilized
tenant included any and all services then being provided, and in
the absence of a fair market rent appeal, the rent increase
provided for in this order is not collectible from the first
stabilized tenant or any subsequent tenant of such apartment.
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