DHCR Decisions
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 NOS.:
APPEALS OF DB110124RT, DB110125RT,
DB110129RT, DB110148RT,
Various Tenants of DB130266RT, DC110080RT,
Parkway Apartments, Phase III DC110059RT, DC110093RT,
PETITIONER DC110094RT, DC110100RT,
DC110111RT, DC110112RT,
DC110360RT, DC110419RT
------------------------------------X
RENT ADMINISTRATOR'S
DOCKET NO: AD110013OM
ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
The above-named tenants timely filed petitions for administrative
review against an order issued on February 7th, 1989, by the Rent
Administrator, Gertz Plaza, Jamaica, New York concerning the
housing accommodations known as various apartments of Parkway
Apartments, Phase III, namely 71-40 to 71-70, 71-02 to 71-24 252nd
Street; 251-02 to 251-32, 251-38 to 251-40, 251-01 to 251-11, 251-
15 to 251-61 71st Road; and 251-42 to 251-44 71st Avenue,
Bellerose, New York.
Since these petitions involve common issues of law and fact, they
have been consolidated for a uniform disposition.
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 these petitions.
This proceeding was commenced on April 1, 1986, by the owner of the
subject housing complex filing of an application for a rent
increase based on the installation of major capital improvements
(MCI), to wit: a new roof including insulation, leaders and
gutters; aluminum replacement windows building-wide; pointing and
waterproofing; adequate plumbing including new faucets, hot water
recirculating and distribution system; rehabilitation of the
heating system consisting of the installation of pumps and air
valves; building entrance and basement entry doors; new bell and
buzzer system; walkways, driveways, stoops and railings; removal of
rubble from job site; basement clean-up to provide work area;
Adm. Rev. Docket No. DB110124RT
and the renovation of 80 vacant apartments. The total claimed
amount for these installations was $1,432,928.12.
The owner certified that on August 20, 1986, it served each tenant
with copies of the application form, notice form, and answer
form.
Six tenants (apartments 8A, 77A, 33B, 39B, 47B and 74B) filed
objections to the owner's application and contended, in substance,
that the improvements were necessary; the proposed rent increase
was exorbitant and would cause a hardship; they were not aware of
any improvements done except new windows and repairs to the front
porch (47B, 77A); the window sashes did not fit, the vestibule
ceiling leaked, and the living room wall needed to be waterproofed
(39B); and the only improvement done to the inside of the apartment
was new windows (8A).
In December 1988, the Division mailed to 41 tenants of the subject
premises a "Notice to Tenant of Opportunity to Respond to
Application". Seven tenants responded and alleged in substance as
follows:
Apartment 74B --- Most of the work was completed three or four
years prior to the owner's application; the windows were drafty;
there was no bell/buzzer system; the front door lock stuck; the
work constituted necessary repairs; the complex was going co-op and
the work was done to make the property more attractive.
Apartment 48B --- No replacement windows were installed since he
commenced occupancy in September of 1981; the walkways,
waterproofing and pointing had begun, but had not been completed;
and he had no knowledge of plumbing, a bell/buzzer system, doors or
roof system being done.
Apartment 47B --- The roof was patched, but was not replaced; he
was not aware of any plumbing work; the apartment door was not
replaced; and there was no new bell/buzzer system installed.
Apartment 27B --- The improvements were made to bring the building
into a habitable condition; the complex was going co-op and the
owner would be compensated for the improvements.
Apartment 8A --- No bell/buzzer system was installed; the windows
were replaced, but the molding which holds the windows was not
Adm. Rev. Docket No. DB110124RT
replaced; he was not aware of any new roof installation; the
entrance door was painted poorly and the design molding was not
replaced.
Apartment 23A --- There were no new bell/buzzer system or walkways
installed; shutters and moldings were installed outside; and he was
not aware of any other improvements except the stucco which was
applied to the exterior walls.
Apartment 17B --- She could not determine if the roof was repaired
or replaced; she did not consider a new dishwasher shut off valve
to be new plumbing; a new bell was installed, but there was no
buzzer system; the pointing and waterproofing were not done
properly as a leak still existed in her apartment; the windows,
building door and walkways were replaced out of necessity; the
apartment door and window moldings were not replaced; and the
walkways were beginning to crack.
Agency inspections conducted on January 12, 13, 19 and 20, 1989
indicated that there was no evidence of leaks in apartment 47B,
that the window installation in apartment 74B was adequate, but
that the key stuck in the front door lock. The inspection also
revealed that no new bell and buzzer system had been installed for
either of the two above-mentioned apartments. The inspector was
denied access to apartments 8A, 39B and 48B.
The order of the Rent Administrator granted, in part, the owner's
application and authorized an increase for a new roof, replacement
windows, plumbing, front entrance and basement doors, pointing and
waterproofing, walkways, driveways and stoops. The total approved
MCI cost was $853,762.85, and the rent increase per room per month
was $22.34, effective October 1, 1986 and collectible March 1,
1989.
Disapproved by the Rent Administrator were the claimed costs of:
the renovation of 80 vacant apartments ($488,637.90); removal of
rubble from the job site ($5,642.00); basement cleanup to provide
a working area ($3,990.00); railings ($19,740.00); and the
rehabilitation of the heating system ($47,521.60) upon a finding
that these installations did not qualify as MCI's. The cost of a
new bell and buzzer system ($13,573.95) was disallowed because no
such installation was discovered in the two apartments which were
inspected. The Administrator also excluded $59.82 of sales tax from
the cost of the installations.
Adm. Rev.Docket No. DB110124RT
In their petitions the tenants contend, in substance, that the
owner's application was not timely filed; they were never notified
of the owner's application or given the opportunity to respond; the
work done was not an MCI, but rather a necessary
repair/replacement; some of the installations were never done, were
not completed or are defective; the improvements were made for the
purpose of converting the premises to a cooperative; and none of
the apartments were inspected. Several of the tenants complain of
the owner's failure to maintain services within their apartments.
The tenants of apartment 38A claim that they have been paying
$15.00 per month for the MCI's since the commencement of their last
lease in August of 1987, they still owe $1600.00, and this balance
should be dropped since they are purchasing their apartment.
In response to the tenants' petitions the owner contends, in
substance, that its application was timely filed; that the
installations conform with agency standards for MCI's; that the
fact that the improvements were necessary is irrelevant; that the
tenants were properly notified of the owner's application; and that
the owner is entitled to a rent increase pursuant to the law and
regulations.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that these petitions 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.
The evidence of record in the instant case indicates that as to
those items for which a rent increase was granted, the owner
substantiated its application by submitting contracts, proposals,
invoices, contractors' certifications, affidavits and cancelled
checks for the work in question. On the other hand, the tenants
have not submitted any evidence to support any of their
allegations. The Commissioner finds that the owner correctly
complied with the application procedures for MCI's and that the
Administrator properly computed the appropriate rent increase. The
tenants have not established that this rent increase should be
revoked.
Adm. Rev. Docket No.DB110124RT
With regard to the tenants' contention that they were never served
with a copy of the owner's application or given the opportunity to
respond, the Commissioner notes that the owner certified (in
accordance with procedures then in effect) as to having served all
tenants in occupancy on August 20, 1986 with copies of its
application; that six tenants (including the petitioner-tenants of
apartments 8A and 74B) submitted answers to the owner's
application; that 41 tenants, including all of the petitioner-
tenants, were served in December 1988, by the Administrator with
notices of the instant proceeding, and that ten of the petitioner-
tenants (5A, 12B, 16B, 14B, 30A, 35B, 38A, 45B, 46A and 3B) failed
to respond thereto while this proceeding was pending before the
Administrator. Accordingly, the Commissioner finds that the tenants
were provided proper notice and an opportunity to respond to the
owner's MCI application when this proceeding was before the
Administrator. Fundamental principles of the administrative appeal
process and Section 2529.6 of the Rent Stabilization Code prohibit
a party from raising issues on appeal which were not raised below.
The tenants of said apartments could have raised the very issues
before the Rent Administrator which they now seek to raise for the
first time on appeal. Accordingly, the Commissioner is constrained
to foreclose consideration of these issues in this appeal
proceeding (Docket numbers: DB110124RT, DB110125RT, DB110129RT,
DB110148RT, DC110080RT, DC110093RT, DC110094RT, DC110360RT,
DB130266RT and DC110419RT).
Section 2522.4 (a)(8) of the Rent Stabilization Code (which became
effective on August 1, 1987) provides, in pertinent part, that MCI
applications must be filed within two years of the completion date
of the installation. The owner's application was filed on April 1,
1987, before the two year rule was in effect. Accordingly, the
Commissioner finds that the filing of the application was timely.
The Commissioner notes that the tenant of apartment 8A made several
allegations as to the defectiveness of the various installations.
However, despite this tenant having received an agency notice of
inspection for January 12, 1989, the inspector could not gain
access to the apartment on that date nor on the following date
(January 20, 1989) that the inspector visited the subjected
premises. Accordingly, the Commissioner rejects this tenant's
contentions on appeal.
It is the established position of the Division that the various
installations recognized by the Administrator meet the definitional
requirement of an MCI as stated in Section 2422.4(a)(2)(i) of the
Rent Stabilization Code. The fact that the improvements were
needed, as claimed by the tenants, underscores the propriety of the
owner's application.
Adm. Rev. Docket No. DB110124RT
With regard to the tenant's contention that the improvements were
made for the purpose of converting the premises to a cooperative,
the Commissioner notes that this fact does not affect the propriety
of the Administrator's order and is not a bar to the owner
receiving a rent increase.
With regard to the tenant of apartment 74B who complains that
"boiler number ten (10) doesn't give enough heat", the Commissioner
notes that the MCI rent increase order appealed herein did not
involve a boiler installation nor was any increase granted for
claimed repairs to the heating system. Therefore, this tenant's
complaint is not relevant to the instant proceeding. It is further
noted that there are no outstanding heat or hot water complaints on
file with the agency for the subject building. This order and
opinion is issued without prejudice to the right of this tenant or
any tenant to file applications for rent reductions based
on a diminution of services, if the facts so warrant.
With regard to the tenants' (apartment 38A) contention that they
have been paying a $15.00 rent increase for the MCI's since August
of 1987, the Commissioner notes that the Rent Stabilization Code
precludes an owner from collecting an increase predicated on an MCI
unless and until an order is issued by the Division authorizing the
collection of same. This order and opinion is issued without
prejudice to the tenants' right to file an individual complaint of
rent overcharge, if the facts so warrant.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that these petitions be, and the same hereby are, denied,
and that the Rent Administrator's order be, and the same hereby is,
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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