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
APPEALS OF DOCKET NOS.:CC410324RT/
: CC410325RT/CC410326RT/
VARIOUS TENANTS OF 177 THOMPSON CC410327RT/CC410328RT
STREET, NEW YORK, NEW YORK
PETITIONERS :
------------------------------------X RENT ADMINISTRATOR'S
DOCKET NO.: LCS00861OM
ORDER AND OPINION GRANTING IN PART PETITIONS
FOR ADMINISTRATIVE REVIEW
On various dates, the above named petitioner-tenants timely filed a
petition for administrative review (PAR) against an order issued on
February 23, 1988 by a Rent Administrator (Gertz Plaza) concerning the
housing accommodations known as 177-181 Thompson Street, New York, New
York, various apartments, wherein the Rent Administrator determined that
the owner was entitled to a rent increase based on the installation of
various major capital improvements (MCIs).
The Commissioner deems it appropriate to consolidate these petitions for
disposition since they pertain to the same order and involve common issues
of law and fact.
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 December 4, 1985, by initially
filing an application for a rent increase based on the installation of a
boiler/burner and windows building-wide at a total claimed cost of
$81,000.00.
The tenants' association of the subject premises (177 Thompson Street)
filed a written objection against the owner's application alleging, in
substance, that the owner intentionally misled them into having their
windows replaced by assuring them that no rent increase would result from
this installation. The tenants who also filed individual responses stated,
in substance, that the owner did not consult or obtain their approval for
the window installations; that screens were eliminated with the
installation of the new windows many of which were drafty and were
installed for cosmetic purposes; that the replacement of the old
boiler/burner, even by the owner's admission, was necessary as it
constantly malfunctioned; that the new boiler had experienced a number of
breakdowns which may be attributable to lack of proper maintenance and
which also contributed to the early demise of the old boiler/burner.
A physical inspection of those apartments which questioned the adequacy of
the window installation occurred on March 12, 1987 wherein the inspector
noted that the bathroom and kitchen windows in apartment #2 (which were in
ADMIN. REVIEW DOCKET NO.: CC410324RT, et al
good condition) were not replaced although the other windows in the
apartment were; that the window frames in apartment #3 had not been
painted; and that it was difficult to either open or close the two bedroom
windows and bathroom window in apartment #25. An inspection of apartment
#1 was not conducted as access was not provided by the tenant. The owner
subsequently submitted an invoice for the purchase and installation of two
new windows in apartment #2.
On February 23, 1988, the Rent Administrator issued the order here under
review finding that the installations qualified as an MCI, based upon the
supporting documentation submitted by the owner, and authorizing rent
increases for rent controlled and rent stabilized apartments. The order
noted the inspection conducted on March 12, 1987 and the owner's response
advising that the window problems had been rectified.
In these petitions the tenants contend, in substance, that the former owner
gave them assurances that there would be no rent increase for the windows;
that the tenants should be relieved of prior rent increases for storm
windows installed in 1962; that they have been paying a rent increase for
a boiler/burner installed in 1968; that screens were not replaced with the
new window installation; that the new boiler/burner has failed on some of
the coldest days and there have been periods of 3 to 4 days without heat;
that the wooden slats used to eliminate drafts around the windows have been
ineffective (apartment 27); and the windows are difficult to operate
including opening and closing (apartment #23). The petitioner-tenant of
apartment #25 reiterates that the windows installed in his apartment are
defective and submitted an agreement, acknowledged in his own handwriting
which he claimed to have reached with Jonis Management Corp., exempting him
from the increase charged for the window installation.
In response to the tenants' petition, the owner stated that heat and hot
water is supplied as required by law, and although requesting 30 days to
further respond to the tenants claims, no such response was filed.
After careful consideration of the entire record, the Commissioner is of
the opinion that these petitions should be granted in part.
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.
The DHCR record reveals that a former owner applied for and received a rent
increase for a "heating system modernization" at the subject premises in
1968. The owner on his application, supported by the contract and the
contractor's statement, indicated that the new boiler/burner was installed
in December 1984.
ADMIN. REVIEW DOCKET NO.: CC410324RT, et al
It has been the long recognized position of the Division, as well as the
predecessor Rent Agencies, that the useful life of a boiler is 25-35 years
and a burner is 20 years. In Docket No. ARL11592K the Commissioner
affirmed the denial of a rent increase predicated on the fact that a prior
"heating system modernization" had not exhausted its useful life. Since
the useful life of the prior heating system installed in the subject
premises had clearly not expired at the time of its replacement, the
Commissioner is of the opinion and finds that the current installation
fails to meet the requirements for a major capital improvement rent
increase; and that the rent increase granted for said boiler/burner should
be revoked.
With regard to the tenants' contentions that their rent was permanently
increased for storm windows installed in 1962, the Commissioner notes that
the useful life of these storm windows had expired pursuant to Policy
Statement 89-5, and that the installation of the subject replacement
windows qualifies for a full MCI rent increase.
It is the established position of the Division that the building-wide
installation of new windows to replace windows which are 25 or more years
old (as in the case herein) meets the requirements for an MCI for which a
rent increase adjustment may be warranted, if the owner otherwise so
qualifies. The tenants' unsupported allegations of an assurance by a prior
owner not to request a rent increase is insufficient to overcome the
supporting documentation submitted by the owner in the proceeding below.
Moreover, the record indicates that the initial complaints regarding the
installation of the windows were addressed in the proceeding below.
However, since the petitioner-tenant of apartment #25, one of the tenants
whose apartment windows were inspected initially and found to be defective,
has raised his complaint anew in his petition for administrative review,
the owner is directed to make every effort to correct any defects, if it
has not already done so.
With respect to the tenants' undisputed allegations below, and reiterated
on appeal, that their old screens were discarded and not replaced with the
new window installation, the owner shall be responsible for replacing the
screens in all apartments for which screens are a required/essential
service. The owner is directed to take appropriate action to correct both
the window defects in apartment #25, if it has not already done so, and to
provide window screens or reimburse the tenants for the purchase of screens
within 60 days of issuance hereof. The owner's failure to comply and the
filing of a service complaint within 90 days from the date hereof may
result in revocation of the rent increase for the affected apartments in
addition to any other penalties which may accrue as a result thereof.
ADMIN. REVIEW DOCKET NO.: CC410324RT, et al
THEREFORE, in accordance with the Rent Stabilization Law and Code, and the
New York City Rent and Eviction Regulations, it is
ORDERED, that these petitions be, and the same hereby are, granted in part;
that the Administrator's order be, and the same hereby is, modified to
provide for a rent increase of $5.19 per room, per month (rather than
$8.44) to reflect the elimination of the increase for the boiler/burner;
and that as so modified, said order be, and the same hereby is, affirmed
subject to the directions contained herein; and it is further
ORDERED, that as to the tenants of the rent stabilized apartments, the
owner refund any excess rent collected as the result of this order at the
rate of 20% per month commencing on the first rent payment date following
issuance of this order of the Commissioner until all overpayments have been
refunded. As to rent controlled apartments, the owner is directed to
refund any excess rent collected within 30 days from the date of issuance
hereof.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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