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
-------------------------------------X ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET NO.: CB430118RT
APPEAL OF
310 WEST 74TH STREET RENT ADMINISTRATOR'S
TENANTS ASSOCIATION DOCKET NO.: AL430116OM
PETITIONER
-------------------------------------X
ORDER AND OPINION REMANDING PROCEEDING ON APPEAL
On February 26, 1988, the above named petitioner timely filed a
petition for administrative review (PAR) against an order issued on
January 22, 1988, by a Rent Administrator (Gertz Plaza) concerning
the housing accommodations known as 310 West 74th 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 major capital improvements (MCIs).
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 the administrative appeal.
The owner commenced this proceeding on August 21, 1986 by initially
filing an application assigned Docket No. AH430179OM and by
subsequently filing another application assigned Docket No.
AL430116OM for a rent increase based on the installation of the
following items at a total cost of $219,432.00: gas burner and
boiler, hot water heater, new roof/waterproofing and an elevator
upgrade including controller and selector.
The 310 West 74th Street Tenants Association (Tenants Association)
objected to the owner's application referenced as Docket No.
AH430179OM, alleging, in substance, that the installations were to
correct building violations and to comply with a court ordered
Stipulation of Agreement between the Tenants Association and the
owner to make certain repairs including waterproofing; that the
workmanship was of poor quality, specifically that the
roof/waterproofing work was not adequate and several apartments
experience water seepage; that the owner did not report the number
of rooms by apartment in his application; and that the room count
submitted by the owner was incorrect. The Tenants Association
submitted an engineer's report dated May 24, 1982 with a survey of
the building and recommended repairs.
ADMIN. REVIEW DOCKET NO. CB-430118-RT
On January 22, 1988 the Rent Administrator issued an order under
Docket No. AL430116OM granting, in part, the owner's application
and authorizing an increase for rent controlled and rent stabilized
tenants based on approved costs of $196,932.00 upon finding that
the gas burner and boiler, hot water heater, new
roof/waterproofing, and elevator upgrade qualified as MCIs.
Disallowed by the Administrator was $42,500.00 in unsubstantiated
costs and $5,0243.87 of the approved cost was attributed to the
commercial tenants' share of the MCI cost.
The Rent Administrator also issued an order under Docket No.
AH430179OM on January 22, 1988 stating that the owner withdrew the
application on March 27, 1987 and that the application was closed
without any further action.
In this petition, the Tenants Association contends, in substance,
that the tenants were never served a copy of the application that
is the subject of the issued Order, Docket No. AL430116OM, and
therefore they did not have the opportunity to comment on the
owner's application; and that the tenants received an order under
Docket No. AH430179OM stating that the owner withdrew his
application. The Tenants Association also claims that the
installations were poorly installed in that some tenants still
experience water seepage into their apartments; that rainwater
accumulates on the roof; that heat and hot water services are
problematic; and that the elevators break down. Furthermore, the
Tenants Association disputes the owner's room count claiming that
there are 60 apartments with 138 rooms, not 59 apartments with 144
rooms.
In response to the Tenant Association's petition, the owner
contends in substance, that the application under Docket No.
AL430116OM is identical to the application under Docket No.
AH430179OM. The owner explains that the reason for two docket
numbers for one application is that the owner resubmitted his
application after unsuccessfully inquiring about the status of his
original application. The owner also contends that the Tenants
Association has not substantiated its allegations regarding the
workmanship of the MCI installations; that the new roof may need to
be re-pitched but it was properly installed; and that the room
count is 96 comprising 62 apartments.
The owner requests that the Rent Administrator modify the order to
include $12,860.00 of the cost for the roof/waterproofing work
which was excluded as unsubstantiated, and submits cancelled checks
for said amount.
After a careful consideration of the entire record, the
Commissioner is of the opinion that this application should be
remanded for further processing.
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ADMIN. REVIEW DOCKET NO. CB-430118-RT
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 evidence of record in the instant case indicates that the
tenants were notified of the owner's application in that the two
docket numbers were assigned to the same application. A copy of
the application was sent to tenants, albeit under Docket No.
AH430179OM, to which the Tenants Association responded with
comments.
As to the Tenants Association's allegation that there is water
seepage into various tenants' apartments, the record reveals that
this claim was made in particular by the Tenants Association to the
Rent Administrator, but that the Rent Administrator did not conduct
a physical inspection of the tenants' apartments with such
complaints. The Commissioner is of the opinion that this
proceeding should be remanded to the Rent Administrator to
determine whether the water damage in these apartments is
attributable to inadequate roof/waterproofing work.
As for the Tenants Association's allegations regarding the
workmanship of the other MCI installations the Commissioner notes
that the owner substantiated his application in the proceeding
below by submitting to the Administrator documentation in support
of the application, including certifications, invoices, proposals,
government permits and approvals and cancelled checks. On the
other hand , the Tenant Association has not submitted any evidence
to support their allegations.
As for the Tenants Association's claim that work was performed to
eliminate building violations and to comply with a court ordered
Stipulation of Agreement, the Commissioner notes that installations
made by the owner that meet the criteria of an MCI as set forth in
the rent laws and regulations may be the basis for MCI rent
increases.
As for the determination of the room count in the subject rent
controlled and rent stabilized apartments, the Commissioner finds
that the owner did not submit adequate information pertaining to
the room count stated in his application. Specifically, Supplement
II, Schedule of Present Monthly Rental Income does not include a
room count by apartment. On remand, the Rent Administrator should
determine the room count of the subject premises.
ADMIN. REVIEW DOCKET NO. CB-430118-RT
As for the owner's request to include additional costs claimed to
be substantiated by canceled checks, the Commissioner notes that
a tenant's PAR is not the proper forum to raise this issue. The
owner's proper recourse was to have timely filed a PAR in which
this issue may have been raised.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
and the New York City Rent and Eviction Regulations, it is
ORDERED, that this petition be, and the same hereby is, granted to
the extent of remanding this proceeding to the Rent Administrator
for further processing in accordance with this order and opinion.
The automatic stay of that part of the Rent Administrator's order
directing a retroactive increase is hereby continued until a new
order is issued upon remand. However, the Administrator's
determination as to a prospective rent increase is not stayed and
shall remain in effect until the Administrator issues a new order
upon remand.
ISSUED:
____________________
Joseph A. D'Agosta
Deputy Commissioner
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