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
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEALS OF DOCKET NOS.:
ALAN RALPH : CC410357RT/CC410395RT
FRANCESCA AGNELLI CD410055RT/CD410056RT
COLIN RILEY
JAMES CORIGLIANO PETITIONERS : RENT ADMINISTRATOR'S
------------------------------------X DOCKET NO.: AE430194OM
ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE
REVIEW IN PART
The above-named petitioner-tenants timely filed administrative
appeals against an order issued on March 15, 1988 by the District
Rent Administrator (92-31 Union Hall Street, Jamaica, New York)
concerning the housing accommodations known as 213 West 18th Street
and 215 West 18th Street, New York, New York, various apartments,
wherein the Administrator granted major capital improvement (MCI)
rent increases for the controlled and stabilized apartments in the
subject premises based on the installation of adequate plumbing and
restoration work (tiles, walls) related thereto. The Commissioner
notes that the owner initially included a boiler/burner
installation in its application which it subsequently withdrew from
consideration during the proceeding below.
The owner commenced this proceeding in May, 1986, by filing an
application for MCI rent increases. Subsequent thereto, the owner
certified that on July 16, 1986 it served copies of the application
upon all tenants and also made a copy available for tenant review
at the premises.
In response to the application three tenants objected to a rent
increase and to the quality or adequacy of the installations.
On December 4, 1989 a physical inspection of the subject premises
was conducted by a DHCR staff member who reported that restoration
work was unsatisfactory in one apartment. The owner subsequently
submitted documentation indicating that it had made repairs to said
apartment.
In the order appealed herein, the Administrator granted MCI rent
increases as indicated above.
In these petitions the tenants contend, variously, that certain
complaints raised below were not addressed; that all of the
apartments are studios, not two room apartments as indicated by the
owner; that, in substance, the owner has not substantiated its
entitlement to an MCI rent increase; and that the increase should
not be permanent. One tenant contends that she was not provided an
opportunity to respond to the MCI application and should not have
ADMIN. REVIEW DOCKET NO.: CC410357RT, et al.
pay for "shoddy" work begun before her lease commenced and not
subsequently repaired. Another tenant contends that he is being
overcharged.
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.
It is the established position of the Division that the
installation of adequate plumbing meets the definitional
requirements of a major capital improvement for which a rent
increase may be warranted. The record shows that the owner
substantiated the application by the submission of various items of
documentation, including copies of cancelled checks, governmental
approvals and the contractor's certification which indicate that
the owner correctly complied with the applicable procedures for an
MCI rent increase and that the increase was properly computed based
on the proven cost of the installation.
It is the established policy of the DHCR, as provided for in the
Code and as reflected in Policy Statement 90-8, that "where there
is a DHCR order in effect determining a failure to maintain a
building-wide service which resulted in a rent reduction", such
order will constitute a bar to obtaining an MCI rent increase. The
subsequent restoration of rent based on a finding of service
restoration will result in the prospective elimination of this
sanction.
The Commissioner notes that as to the subject accommodations at 213
West 18th Street, Division records disclose that an order of rent
reduction was issued under Docket No. BD410116B on November 10,
1987, based upon a finding of a reduction in service of a building-
wide nature, which order remains outstanding against said premises.
Accordingly, as to premises 213 West 18th Street, the Commissioner
finds that the major capital improvement rent increase should not
have been granted and should be suspended from the effective dates
thereof until such time as an order is issued finding that the
services which were the basis of said rent reduction order have
been restored, at which time the major capital improvement rent
increase at such address shall be restored on a prospective basis
as of the effective date of said finding.
ADMIN. REVIEW DOCKET NO.: CC410357RT, et al.
Regarding the contention raised by the tenant residing in apartment
3D at 213 West 18th Street that she was not provided an opportunity
to respond to the MCI application, the record discloses that the
tenants in occupancy at the time the instant application was filed
were properly notified of the same by the Administrator and
afforded an opportunity to respond thereto.
In the event of a change of tenancy during a major capital
improvement proceeding, it is the obligation of the owner to notify
the new tenant of the pendency of such proceeding, and to advise
the Division of this change in tenancy. While not fatal to the
owner's application, the owner runs the risk of the tenant who was
not so notified raising issues on appeal which could have been
raised in the proceeding below, thus jeopardizing the finality of
the Administrator's order.
Where, as indicated in the case of the tenant residing in apartment
3D, the tenant took occupancy pursuant to a vacancy lease
commencing after the owner had filed its application, the
Commissioner notes that for the MCI increase granted by the
Administrator's order to be collectible during the term of the
petitioner's vacancy lease, such vacancy lease would have to
contain a specific clause advising the tenant of the docket number
of the pending proceeding and advising that the rent charged was
subject to additional increase (during the current lease term in
effect) as provided by Section 2522.4(a)(5) of the Rent
Stabilization Code and established Division precedent. In the
absence of same, said increase would not have been collectible
until the expiration of the lease term in effect at the time of
issuance (March 15, 1988) of the MCI order, provided the renewal
lease contains a general authorization provision for adjustment of
the rent reserved by DHCR order.
However, the Commissioner notes that since the tenant of apartment
3D resides at the premises 213 West 18th Street, upon said lease
expiration the increase shall be collectible in accordance with
this order and opinion.
Regarding the contention of the tenant occupying apartment 5A at
213 West 18th Street that certain complaints raised below were not
properly addressed by the Administrator, the Commissioner notes
that some of these complaints concerned items directly related to
the condition of this tenant's apartment subsequent to the MCI
installation which were not addressed below. The owner is hereby
directed to promptly rectify any defective conditions which may
exist with respect to these items, if it has not already done so,
upon written notification of the tenant of said apartment within 30
days from the issuance of this order. Upon the owner's failure to
do so, the determination herein is without prejudice to the tenant
filing a complaint with the DHCR based upon a diminution of
services. As noted above, the rent increases for apartment 5A is
suspended until such time as there is a finding by the Division
that services have been restored.
ADMIN. REVIEW DOCKET NO.: CC410357RT, et al.
The Commissioner notes that this petitioner-tenant also (Apt. 5A)
raised a heat and hot water complaint below related to the
boiler/burner installatin that the owner withdrew from
consideration. This order and opinion is issued without prejudice
to the tenant filing a complaint with the DHCR based upon current
service decreases, if found warranted.
Regarding the contentions that all apartments in the subject
premises are studio apartments (i.e. one room apartments) and not
all two room apartments as indicated in the MCI application, the
tenants have not submitted any evidence in support thereof. It is
agreed by all parties that the apartments are the same size even
though there is disagreement on the room count. The Commissioner
notes that in this case, since the total approved cost is divided
by an equal number of rooms, it does not materially affect the rent
increase granted to an individual apartment.
Regarding the contention that the MCI rent increase should not form
a permanent part of the rent structure, the Commissioner notes that
the permanent nature of the increase has been upheld by the Court
of Appeals of the State of New York in the Matter of Ansonia
Residents Associates v. DHCR.
Regarding the contention raised by the tenant in Apartment 1A at
213 West 18th Street that he is being overcharged, the record is
not sufficient to support this contention. This order is issued
without prejudice to the tenant filing a complaint with this
Division based on a rent overcharge, if the facts so warrant.
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, it is
ORDERED that these petitions be, and the same hereby are, granted
in part; that the Rent Administrator's order be, and the same
hereby is, modified to the extent of suspending rent increase for
premises 213 West 18th Street in accordance with this order and
opinion; and that as so modified such order be and the same hereby
is affirmed; and it is further
ORDERED, that the owner shall pay any arrears occurring as a result
of this order and opinion as follows: for rent stabilized
apartments, a monthly credit of 20% of such arrears for five
consecutive months until all overpayments have been refunded,
commencing on the first payment date after the issuance of this
order and opinion; and for rent controlled apartments, a full
refund within 30 days from the issuance date of this order and
opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
|