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 SJR NO.: 4050
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: CF 410035-RO
:
DRO DOCKET NO.: AL 410124-OM
SANDRA & DAVID VAN BUREN
PETITIONER :
------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
AND AFFIRMING COMMISSIONERS PRIOR ORDER AND OPINION
Pursuant to an order of the court, Mr. Justice Glen, this proceeding was
remitted to the Division for further consideration.
The instant matter stems from an application filed in February 1987
wherein the owner of the subject premises known as 132 West 87th Street,
New York, New York sought a rent increase adjustment predicated on the
installation of new chimney flues for the boiler and hot water heater at a
claimed cost of $10,842.61. The various documentation submitted included
a short form contract dated January 29, 1986, the contractor's
certification and cancelled checks in substantiation of the submitted
cost. Said contract provides for the removal of the original flue lines
(aged approximately 90 years), new ceramic flue tiles and masonry work
from the boiler room through the first,second,third and fourth floors,
through the roof and extending approximately 15 feet above the roof along
an adjacent party wall.
On April 29, 1988 the Administrator issued an order denying the
application on grounds "new chimney flues for boiler and hot water heater"
do not constitute a major capital improvement.
In their petitions for administrative review the owners contend, in
substance, that the new chimney flue (the interior lining of the chimney)
installed in the subject seven family dwelling meets the definitional
requirement of a major capital improvement since the work entailed not
only the installation of new ceramic flue piping throughout the entire
length of the chimney but also entailed the removal and subsequent
replacement of substantial portions of the masonry surrounding the flue
pipes in order to gain access to same; and that said installation is a
major component of the heating system and is required for the proper
functioning of some. The owner also cites the provisions of the Internal
Revenue Code as justification for considering the depreciability of the
work in questions.
DOCKET NUMBER: 4050; CF 410035-RO
Tenants responded to the petitions urging, in substance, things that the
requested increase was excessive in view of previously obtained major
capital improvement rent increases for among other things a gas fired
heating system; and that the open chimney was for personal benefit of the
owner who now occupies and has possession of three apartments in the
building.
On March 21, 1988 the Commissioner issued an Order and Opinion Granting
the owners' petition for administrative review and authorizing a rent
increase adjustment upon a finding that the extensive nature of the work
entailed in the removal and replacement of the original flue pipes and
surrounding masonry was tantamount to the construction of a complete new
chimney which substantially complies with he requirement of a major
capital improvement.
Thereafter the tenant of apartment 4A commenced a proceeding in the
Supreme Court pursuant to Article 78 of the Civil Practice Law and Rules
requesting that the Commissioner's order be annulled. This resulted in an
order of the court remitting this proceeding to the Division for further
consideration.
In the tenant's Article 78 petition it is urged, in substance, that it was
error to have permitted a major capital improvement rent increase in the
absence of the owner's obtaining and submitting a building permit and
complying with the New York City Administrative Code, Section C26-1501.1,
regarding the installation of chimneys and required governmental testing
of same; that the chimney improvement benefited apartments, including the
owners', with wood burning fireplaces, which her apartment does not have;
and that without inspection it is impossible to tell whether the flue
system for the gas fired boiler installed in 1984 was modified or replaced
in 1986 as opposed to the fireplace flue system.
Subsequent to the remission of this proceeding the tenant's attorney
submitted a copy of an inspection report dated May 25, 1989 wherein an
inspector from the Boiler Division of the Department of Buildings found
the gas fired heat and hot water system functioning properly but issued a
violation for the boiler as not having been registered with the Department
of Buildings.
Thereafter, by letter dated March 26, 1990, the owners' attorney stated,
among other things, that no violation had been issued against the flue
installation; that the reconstruction of a chimney is not the type of
building improvement for which a permit is required to be submitted to the
DHCR in order to obtain a major capital improvement rent increase; that
under current Division practice governmental approvals are only required
for service equipment improvements such as a new boiler; and that the
owner did obtain approval from the Department of Buildings that the
chimney reconstruction was completed in accordance with all requirements.
Submitted therewith was a copy of a sign-off letter from the Department of
Buildings dated March 21, 1990 to the effect that the work relative to
application No. BN 11651-89 has been noted to have been completed in
accordance with Department of Buildings Directive No. 14 of 1975.
As stated in said sign-off letter, Directive No. 14 of 1975 permits the
retention by the owner of a licensed professional engineer or registered
architect to certify to the Department of Buildings that he inspected
DOCKET NUMBER: 4050; CF 410035-RO
the work approved under the submitted application; and that such work has
been completed in accordance with the Rules and Regulations of the
Department.
Thereafter the owners' attorney submitted to the DHCR copies of: 1) a
Building Notice Application, No. 11651/89, filed by the co-owner herein,
David Van Buren, as a registered architect, for the following work "Reline
Existing Flue in Existing Masonry Chimney No Change to USE EGRESS OR
OCCUPANCY"; 2) a work permit under said application number; 3) a
certificate of completion signed by David Van Buren as a registered
architect and 4) the plan filed and accepted by the Department of
Buildings under application No. BN 11651/89. Said plan shows the
connection of the boiler and hot water heater to the chimney and and the
areas of the chimney that are to be replaced and the areas which are to
remain.
By letter dated June 15, 1990 the owners' attorney stated in response to
an inquiry by the Division, that the work approved by the Department of
Buildings "did not entail the replacement or modification of the flue
system for wood burning fireplaces."
By letter dated August 28, 1990 the tenant was afforded an opportunity to
comment on the aforesaid submission by the owner's attorney. No response
thereto has been received by the Division.
After a careful reconsideration of the entire record, as amplified upon
remit, the Commissioner is of the opinion that the prior grant of this
petition for administrative review should be affirmed.
Rent increases for major capital improvements are authorized by Section
2522.4 of the Rent Stabilization Code for rent stabilized apartments.
Under this section 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 items whose useful life has expired.
As previously stated by the Commissioner, the installation of a new
heating system (or major components thereof) constitutes a major capital
improvement for which a rent increase adjustment may be warranted. While
it is clear from the record that the work in question was not performed in
conjunction with the gas fired heating and hot water system installed two
years earlier, the Commissioner is of the opinion that the installation of
a complete new chimney for the purpose of providing proper exhaust for
said heating system in and of itself would meets the definitional
requirements of a major capital improvement.
Having reviewed the documentation submitted in the proceeding below as
well as the documentation submitted on remit, the commissioner is of the
opinion that the relining of the entire brick chimney with new ceramic
flue pipes together with related masonry work entailed in the installation
of same was sufficiently extensive and structural in nature to be
tantamount to the installation of a new chimney which would appreciable
prolong the life of the structure so as to qualify as a major capital
improvement provides such work meets the requirements of law.
DOCKET NUMBER: 4050; CF 410035-RO
While the tenant asserts that the flue replacement may have been for
woodburning fireplace, such speculation (denied by the owner) is not
supported by the record. On the other hand, the owner has submitted proof
in the form of a sign-off letter from the Department of Buildings that the
chimney flue reconstruction was performed to the satisfaction of the
governmental agency having jurisdiction thereof.
THEREFORE, in accordance with the provisions of the Rent Stabilization
Code, it is
ORDERED, that this petition be, and the same hereby is granted; and that
the Commissioners prior order and the rent increase adjustment provided
for therein be, and the same hereby is affirmed.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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