STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.:DA 630046-RO
GILDIN MANAGEMENT CO. :
FOR RENT ADMINISTRATOR'S
HENRY HUDSON EQUITIES CO., DOCKET NO.:CE 630214-OM
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On January 17, 1989 the above-named petitioner-owner/sponsor filed an
administrative appeal against an order issued on December 22, 1988 by the
Rent Administrator (92-31 Union Hall Street, Jamaica, New York) concerning
the housing accommodations known as 2711 Henry Hudson Parkway, Bronx, New
York, Various apartments, wherein the Administrator denied major capital
improvement (MCI) rent increases for the stabilized apartments in the
subject premises based on the installation of new windows.
The owner/sponsor commenced the proceeding below by filing its MCI
application in May, 1988. The owner indicated in its application that the
subject building is a cooperative (co-op), that it is the holder of the
unsold shares and that a total of 641 windows (620 apartment windows and 21
windows in public areas) at the premises had been installed as follows:
a) 248 windows installed in 20 apartments (1 occupied
by a stabilized tenant) by Ecker Manufacturing
Corp. commencing December 11, 1985 and ending
March 7, 1986. The owner/sponsor indicated
that the resident-owners paid for the windows
installed in their apartments, that the
stabilized tenant paid a "voluntary increase"
for the window installation therein and that
it was not requesting a rent increase for said
b) 16 windows installed in 1 professional apartment by
County Engineering Co. in July 1987 and paid for by
the individual owner of said apartment. The owner
indicated that it was not requesting a rent
increase for this work.
c) 377 windows installed in 30 apartments, of which 22
are occupied by stabilized tenants, and in the
public areas by Miller Stormguard Corp.,
commencing December 1, 1987 and ending December 9, 1987.
The owner indicated that it was only requesting a
rent increase for the windows installed in the
aforementioned 22 apartments.
ADMIN. REVIEW DOCKET NO.: DA 630046-RO
The Rent Administrator's order, appealed herein, denied MCI rent increases
based on a determination that the window installation was completed in
stages over a two year period by three different contractors.
In its petition the owner contends that the improvement was building-wide;
that the cost is being depreciated; that there is nothing in the Law of
Code to preclude the work being done in stages and by more than one
contractor; and that one of the contractors performed the work in one
professional apartment only and at the occupant's expense in conjunction
with an alteration.
Various tenants submitted responses to the petition alleging, in substance,
that the Administrator's order should be affirmed.
After a careful consideration of the entire record, the Commissioner is of
the opinion that this petition should be denied.
Rent increases for major capital improvements are authorized by Section
2522.4 of the Rent Stabilization Code for rent stabilized apartments.
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 building-wide
installation of new apartment windows and/or public area windows to replace
windows which are 25 or more years old constitutes a major capital
improvement for which a rent increase adjustment may be warranted provided
the owner otherwise so qualifies. In this respect, the Commissioner notes
that work of a piecemeal nature or ordinary repairs and maintenance does
not qualify as a major capital improvement.
The Commissioner is of the opinion that at the time the work was initially
commenced the owner/sponsor did not fully intend to install new windows on
a building-wide basis at the premises. The window work was performed in
three separate installations over a two year period by three different
contractors. The Commissioner notes that the owner/sponsor submitted with
its application a copy of a letter dated August 31, 1987 and addressed to
the shareholders which states:
"After numerous Board of Directors meetings, a decision
has been reached to the effect that the cooperative
would look considerably better if all new windows were
installed. We anticipate the project to begin in
October and be completed by year-end."
The record reveals that at the time this letter was written 264 windows or
41% of the 641 total windows at the premises had already been replaced in
two separate installations that were conducted over a year apart. The
subsequent decision of the owner/sponsor to commence a "project" which upon
ADMIN. REVIEW DOCKET NO.: DA 630046-RO
comp1etion signified that all of the windows had been replaced albeit not
in one installation is not sufficient to fulfill the building-wide
requirement of Section 2522.4 of the Code.
The Commissioner further notes that although the owner/sponsor indicated
that the resident-owners paid for the windows installed in their respective
apartments, said installation indicated above under a), the record reveals
that the costs therefor were partially paid by the owner/sponsor, as
evidenced by a copy of a cancelled check (no. 8274) made out by the
owner/sponsor to Ecker Manufacturing Corp. Although the record indicates
that the owner/sponsor was involved in this initial installation, the
owner/sponsor has failed to show that the intention at the outset was to
perform a unified and consecutively timed building-wide window
installation. The Commissioner finds that the window installation herein
was of a piecemeal nature and that the Administrator properly denied an MCI
rent increase for the subject premises for this work.
THEREFORE, in accordance with the provisions of the Rent Stabilization Law
and Code, it is
ORDERED, that this petition be, and the same hereby is, denied, and the
order of the Rent Administrator be, and the same hereby is, affirmed.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner