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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 NO.:
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MARCELLE GREENFIELD,
RENT ADMINISTRATOR'S
DOCKET NO.:
PETITIONER BL 420066-B
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND REMANDING THE PROCEEDING TO THE RENT ADMINISTRATOR
On August 29, 1988, the above named petitioner-owner filed a Pet
ition for Administrative Review against an order issued on
August 1, 1991 by a Rent Administrator concerning housing accom-
modations known as various apartments at 124 East 85th Street,
New York, New York, wherein the Administrator determined that
there had been a decrease in services and, based thereon,
directed a rent reduction.
The Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion relevant to the issues
raised by the administrative appeal.
This proceeding was originally commenced on December 10, 1987 by
the filing by the tenants f five apartments of the subject-
building of a complaint o decreased services; specifically, that
the basement storage area had been eliminated due to the improper
renovation of apartment 1-R (duplex), which is occupied by the
owner, and that the laundry facilities in the basement were
converted by the owner for use as an office while renovating
(duplex) apartment 1-R. The complaint also stated that a
complaint seeking a rent reduction for the loss of the laundry
service was previously filed in 1980 (Docket No. 2T 657580-589)
and that the owner has also applied for an Major Capital Improve
ment (MCI) rent increase in connection with these renovations
(Docket No. BG 410383-OM).
The owner submitted an answer to the complaint on January
25,1988, stating therein that the renovations complained of took
place seven years before, when he changed from an oil to a gas
heating system. The system required extensive renovations to the
old boiler room, including installing new flue vents. The owner
also claimed that before the renovation, the tenants discarded
trash in the area and the accumulation was creating a dangerous
fire and health hazard. There was also no evidence of storage
usage by any individual tenants. However, the owner did notify
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the tenants before the work began, and advised them to remove any
possessions stored there. The owner also enclosed a copy of an
order from the Department of Rent and Housing Maintenance, Office
of Rent Control, (Docket No. 2T-657580-589), dated January 26,
1980, wherein it was determined to deny the tenants' request for
a rent reduction where the private concessionaire failed to main
tain the laundry facilities in the building. However, the order
also directed the owner to permit a concessionaire to install
laundry facilities should one be found to operate it. Finally,
the owner affirmed that none of the tenants ever complained about
the alleged loss of the basement storage area until they filed
the complaint seven years later.
Inspections of the premises by a DHCR employee were scheduled for
March 11, 1988 and March 21, 1988, but the inspector could not
gain access to the building on both occasions.
In an Order issued under Docket No. BL 420066-B on August 1,
1988, the Rent Administrator determined that a service decrease
had occurred as a result of the discontinuance of the storage
space in the basement, and reduced the maximum legal rent of the
rent controlled tenants by $6.00 per month effective the first
payment day following the issue date of the order and reduced the
rent of the rent stabilized tenants to the level in effect prior
to the most recent guideline adjustment, effective as of February
1, 1988.
In its petition, dated August 31, 1988, the owner contends that
she is being penalized for decreasing a service that was never in
fact provided to tenants. The owner asserts that there never
existed any designated storage space in the basement that was
offered to tenants, but that they had taken it upon themselves to
use the basement area to discard abandoned objects, thereby
creating a potential fire hazard that the owner was mandated to
remove in order to be in compliance with the Multiple Dwelling
Law and insurance requirements. The owner states that she did
not merely remove the hazard but upgraded the basement area in
the building.
The owner then details the history of her involvement with the
building. She states that when she purchased it in 1979, it was
a hundred-year-old twenty one foot five-story walk-up, and that,
upon inspection by an insurer, was found to contain a fire hazard
because of the amount of furniture and other items stored in the
basement. A letter from the insurer so stating this dated
December 13, 1979, is included with the petition. The owner also
notes that the "deteriorating materials" also bred water-bugs due
to the trapped moisture. Then "as a courtesy" to the tenants,
the owner invited them to remove any of their personal items from
the basement prior to the clean-up. T e owner states categor-
ically that none of the tenants ever claimed any of the abandoned
items, which were unlabeled. After the basement was cleared the
owner consulted with an architect and rehabilitated the whole
basement area in accordance with the New York City Building Code
requirements.
The owner claims various improvements as part of the remodeling,
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including the installation of a gas heat and hot water system,
fire proofing the entire room, separate boxed in units for gas
and water meters and other installations. Additionally, the
owner mentions the construction of a full-length fireproof
hallway passageway throughout the entire basement, as required by
the Multiple Dwelling Law, Article 6, Title 2, Section 187 (1B).
Since all of the remodeling was to be in compliance with the law,
the owner feels any rent reduction is unwarranted. Finally, she
asserts that neither she, nor the prior owner ever provided
locked bins, skids or chicken wire (stora e requirements speci-
fied in the building code) nor ever granted permission for
storage of the tenant's possessions in the basement. Enclosed
with the petition is a computer-generated printout stating that
there were no violations pending against the subject-building in
1987 and, as a newly received attachment, a letter from IRA M.
Starr, attorney, dated October 3, 1988 stating that, as
partner/offices of the owner-entity of the subject-building from
the late 1960's through 1979, he affirms that no storage facili-
ties were designated or existed in fact in the basement of the
building and, to the best of his knowledge, no permission was
ever granted the tenants for that purpose. The petition also
includes the owner request for a stay of the order.
In separated and identical answer dated November 8, 1988 three of
the tenants stated that the "storage room" had been provided to
tenants as an "inducement" to rent as far back as 1964. The
designated space was a cinder block room 10 x 15 feet on the west
wall of the basement, with a steel fireproof door. Tenant access
was via an outside door, for which all tenants used to have a
key, since there was no inside access. The washer/dryer, which
was also discontinued without the tenants' consent was adjacent
to the storage room. The tenant's representative also claims
that the removal of the storage area was part of the owner's
ongoing harassment of rent regulated tenants who refused to
purchase their apartments under the owner's sponsorship plan.
Also, the owner's claim that the stored material constituted a
fire hazard is belied by the fact that she knowingly allowed it
for two years as evidenced by the owner's letter to the tenants,
dated February 10, 1981 and which is enclosed with the answer,
advising them of the improvements and requesting that they remove
personal possessions from the basement. This letter also
indicates that the owner was aware, despite her claims to the
contrary, that the room was used for storage by the tenants. The
representative also suggests that the building plans prior to
1979 would show the existence of the storage room and the
owner's subsequent building plans would show plans for the
demolition of the storage space to make room for the two duplex
apartments. Finally, the representative's claim that the rent
reduction should have been retroactive to the date of actual
misappropriation f the space, in February, 1981.
On January 31, 1989 the Commissioner granted a partial-stay of
the owner's petition in that the directive to refund prior
overcharges to the tenant and, in the alternative, the granting
of permission to the tenants to deduct some from the rent were
stayed pending the determination of the petitio, in accordance
with Section 2529.12 of the Rent Stabilization Code. In a
supplementary affidavit, dated November 3, 1989, the owner adds
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certain details to her argument. She contends that the claimed
storage area was originally used to store coal for the building's
furnace. Once that became obsolete, hazardous conditions
developed which the owner was directed to cure by the insurance
carriers under penalty of loss of coverage. On the other hand,
the tenants present no evidence that any of them were ever
authorized to use the space as a storage facility. The owner
also notes that thee is nothing in writing; including any lease
provisions, which mentions such a right. The owner states that
one tenant even concedes in its answer that the space was
'unusable". Furthermore, although one of the tenants alleges
that the owner "illegally breached the rental contract", no
evidence is presented that such contract ever existed. In fact,
the lease of that tenant which is included with the supplement,
contains no right to use any storage facility; and the tenant
does not claim ownership of any of the abandoned items.
Finally, the owner notes that storage is not listed among
possible "required services" in Policy Statement 89-1, nor is
there any evidence that it was provided on the base date.
Enclosed with the supplement is a copy of the lease to Apartment
2-R, covering the period from August 10, 1972 through August 31,
1974, and eight undated photographs showing the exterior and
interior of the building.
In a final supplement from the owner's new attorneys dated
September 25, 1990, the owner reiterates its contention that the
Administrator's order was incorrect because it did not resolve
the issue of whether the use of the basement area as a storage
facility was a base-date service. It seems, says the owner, that
the Administrator took the tenant's word "at face value" that
they had always had use of the storage pace, even though the
claim is unsupported by any documentation. The owner also
contends that, since a hearing would be necessary to resolve the
issue, (referring to Bel Air Leasing Co., ARD No. ARL 10933-K,
which also concerned storage space), that the order should be
"revoked" until that issue of fact is resolved. Furthermore, the
reliance upon an inspection of the premises could not have been
adequate, since an inspection could not establish whether the
service actually existed on the base date. The owner cites prior
Commissioner's opinions holding that a mere inspection would not
suffice.
The Commissioner is of the opinion that the owners petition
should be granted in part and the proceeding be remanded to the
Rent Administrator for further investigation.
With respect to the question of the correctness of the order for
rent controlled tenants, the sole substantive issue is whether
the use of the basement should be considered an "essentia " ser-
vice. Section 9 NYCRR 2200.3(b) of the Rent a d Eviction Regu-
lations defines "essential services" for rent-controlled tenants
as those essential services which the landlord furnished or which
he was obliged to furnish on April 30, 1962 and which were
included in the maximum rent for the housing accommodation on
that date.
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For rent stabilized tenants, the issue must revolve around
whether the practice constituted a "required service" under
Section 2520.6(r) of the Rent Stabilization Code, which defines
required service as those services which the owner was
maintaining or was required to maintain on the applicable base
date and any additional services provided or required to be
provided thereafter by applicable law.
In the instant case, which involves both rent-controlled and rent
stabilized tenants, the record fails to establish whether in fact
the use of the basement as a storage facility would be a
preserved right for either group. Although the owner correctly
asserts that the tenants' offer no documentation to validate the
claim, it is well established that the practice itself on the
applicable base dates is all that is required. Therefore, the
owner anticipated correctly when mentioning, in its supplement to
the petition, that a formal hearing should be held to resolve the
issue.
It is also noted that the fact that the complaint about the loss
of the storage space was not filed until seven years after its
occurrence would not in an of itself deprive such tenants of
their right to the service.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, and the Rent and Eviction Laws, it is,
ORDERED, that this petition be, and the same hereby is, granted
to the extent of remanding this proceeding to the District Rent
Administrator for further processing in accordance with this
order and opinion. It is further
ORDERED, that the Administrator's order be revoked. Any arrears
owed by the tenants as a result of this order and opinion shall
be paid by the tenants to the owner in equal monthly installments
over the course of the next twelve months.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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