BL110047RT, BL110319RT (refiling of BK130043RT), ART08683-Q
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 NOS. BL110047RT
BL110319RT
(refiling of BK130043RT)
ART08683Q
Charles Dempsey, (refiling of ART06425Q)
: DISTRICT RENT OFFICE
DOCKET NO. ZQ002857R
OWNER: Joseph Macari
PETITIONER :
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ORDER AND OPINION TERMINATING DOCKET NO. ART08683-Q,
DENYING PETITIONS IN PART, AND REMANDING PROCEEDINGS ON APPEAL
On December 17, 1987 the above-named petitioner-tenant perfected the
filing of Petitions for Administrative Review against an order issued on
October 28, 1987 by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York concerning the housing accommodations known as 144-41
41st Avenue, Flushing, New York, Apartment No. 6N wherein the Rent
Administrator determined that the owner had overcharged the tenant by
$137.20.
The issue herein is whether the Rent Administrator's order was
warranted.
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the record relevant to the issue
raised by the administrative appeals.
This proceeding was originally commenced by the filing in July, 1985 of
a rent overcharge complaint by the tenant, in which he stated that he
had commenced occupancy on January 1, 1977 at a rent of $210.00 per
month; that his apartment had been gutted on January 30, 1985 by a fire
caused by a contractor working for the owner; that the owner sent him a
letter on February 1, 1985 requiring him to vacate; that the owner later
gave him a new lease commencing July 1, 1985 at a rent increase of
$72.66 per month, even though his existing lease had not run out; and
that the appliances were only smoke and water damaged and could have
been cleaned. The tenant later contended that the owner's losses were
compensated by insurance; that tenants did not consent to a rent
increase, other than in new leases signed under duress; that the Rent
Stabilization Code does not provide that tenants must renew at a higher
rent if an apartment in destroyed by fire, or that they must accept a
premature new lease; that the law mandates a rent of $1.00 per month
while apartments are being repaired; that his previous lease should be
extended by the five months that it took the owner to repair the subject
BL110047RT, BL110319RT (refiling of BK130043RT), ART08683-Q
apartment; that the apartment previously had six cabinets as well a sink
with two basins; that only two cabinets, and a sink with one basin, were
installed, with no drawers and no counter top; and that this is inferior
to what previously existed.
In answers, the owner asserted in substance that the destruction of the
roof and the damage done by the fire caused the equipment to rust and
warp; that the Fire Department ordered the tenants to vacate; that the
leases were voided because of the fire, with tenants paying no rent
during the time they were not occupying apartments; that the building
was restored and improved immediately after a settlement was made with
the insurance company; that the apartment was completely renovated, with
a new refrigerator, new stove, new cabinets, new sink, painting, and
floor scraped; and that the apartment was first offered to the previous
tenant, with a charge being made for the two new appliances, and other
improvements other than painting, plus a two year lease without vacancy
charge. The owner submitted a contract for modernization of the
kitchen, including a new Formica counter top, and new bathroom sink and
vanity, at a cost of $2,595.00, and a cancelled check.
In an order issued on October 28, 1987 the Administrator, allowing
$2,595.00 for improvements, and deeming a two year lease commencing
October 1, 1985 rather than July 1, 1985, found an overcharge of $137.20
as of October 31, 1987.
The tenant filed three Petitions for Administrative Review during the 12
months prior to the Administrator's order. Docket No. ART04511Q was
rejected on November 4, 1985 because he failed to specify the issuance
date of the order [not yet issued] which he was appealing. He refiled
his petition as Docket No. ART06425Q, which was rejected on February 27,
1986 for other procedural reasons. On March 12, 1986 he refiled again
as Docket No. ART08683-Q. While that appeal is herein being terminated
as premature, since it was also filed long before there was any order to
appeal, the Commissioner notes that its main points are also set forth
in Docket Nos. BL110047-RT and BL110319-RT, which are considered herein.
In those petitions, the tenant contends in substance that he should not
have to pay an increase for work for which was paid for out of insurance
proceeds, and that the old lease should be extended by the six [actually
five] months that it took to make the repairs.
In answer, the owner asserts in substance that the tenant's appeals,
received on December 17, 1987, were untimely for an order issued on
October 28, 1987.
The Commissioner is of the opinion that Docket No. ART 08683-Q should be
terminated, and that Docket Nos. BL110047-RT and BL110319-RT should be
denied in part and remanded to the Rent Administrator.
On the issue of timeliness: The tenant filed a timely appeal on November
9, 1987 under Docket No. BK130043-RT. It was rejected on December 9,
1987 because it did not include a copy of the order being appealed. The
rejection order gave the tenant 15 days to refile properly. He did so
on December 19, 1987 with duplicate appeals docketed as BL110047-RT and
BL110319-RT, so those appeals are timely.
While the tenant is correct that he was entitled to continue with his
1983 lease at a rent of $1.00 per month while the apartment could not be
BL110047RT, BL110319RT (refiling of BK130043RT), ART08683-Q
occupied, such lease expired on September 30, 1985. It was therefore
proper for the Administrator to deem a new lease commencing October 1,
1985.
DHCR policy, paralleling the provisions in Sections 2522.3(a)(9) and
(10) of the Rent Stabilization Code [that rent increases not be granted
for Major Capital Improvements to the extent that they are paid for by
governmental grants or out of the post-conversion reserve fund of a
cooperative corporation], and as reflected in the May 4, 1989 order in
Docket No. CF510024RO, is that no rent increase is allowed for
individual apartment improvements to the extent that they are paid for
out of insurance proceeds representing compensation for loss of the
previously existing equipment or facilities. While the owner has not,
in this appeal proceeding, denied the tenant's contention that the
owner's "insurance coverage compensated him for his losses," and while
the owner in a November 7, 1985 answer in the earlier proceeding
mentioned "settling our losses with the insurance company," it cannot be
assumed that 100% of the cost was covered by insurance (e.g., the owner
may have had current value coverage, or replacement value coverage, or
a co-pay percentage, or a deductible, etc.). This proceeding is being
remanded to look further into the matter. It may also be relevant if
the insurance company did not pay for them on grounds that they were
repairable, and if the owner nevertheless made improvements and
installed new equipment without tenant consent to a rent increase.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that the proceeding in Docket No. ART08683-Q be, and the same
hereby is, terminated; and that the petitions in Docket Nos. BL110047-RT
and BL110319-RT, be, and the same hereby are, denied in part and granted
to the extent of remanding those proceedings to the Rent Administrator
for further processing in accordance with this order and opinion. The
automatic stay of so much of the Rent Administrator's order as directed
a refund is hereby continued until a new order is issued upon remand.
However, the Administrator's determination as to the rent is not stayed
and shall remain in effect, except for any adjustments pursuant to lease
renewals, until the Administrator issues a new Order upon remand.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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