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
APPEALS OF DOCKET NOS.: DE 210049-RT
: DE 210051-RT
VARIOUS TENANTS OF 2 GRACE COURT, DE 220048-RT
BROOKLYN DE 220050-RT
PETITIONER : DE 220052-RT
------------------------------------X DE 220374-RT
RENT ADMINISTRATOR'S
DOCKET NO.: AL 230097-OM
ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN PART
The above-named petitioner-tenants filed petitions for administrative
review of an order issued on March 30, 1989 by a Rent Administrator
concerning the housing accommodations known as 2 Grace Court, Brooklyn, New
York, various apartments.
Since the petitions involve common issues of law and fact, the Commissioner
deems it appropriate to consolidate said petitions for disposition.
The Commissioner has reviewed all the evidence in the record and has
carefully considered that portion of the record relevant to the issues
raised by the petition for review.
By application dated February 20, 1987, the owner requested an MCI rent
increase based on the installation of an intercom, elevator rehabilitation
and modernization, concrete/brickwork, new entry doors and waterproofing.
In response to the owner's application, several tenants asserted, in
substance and pertinent part, that the newly installed intercom system does
not function properly and that the former intercom system worked better
than the new one even at the time of its replacement. Several tenants
further assert that the owner was previously granted an MCI rent increase
based on an intercom system installation completed late in 1971. Regarding
the walkways and courtyard, several tenants assert that the improvements
were cosmetic and or necessitated due to damage caused by the premises'
workmen who allegedly used the area as a dumpster while working.
On November 14 and 17, 1988 the agency sent an inspector to inspect various
apartments for leaks. The report of the agency inspection indicates that
no evidence of leakage was found in several apartments.
By order issued March 30, 1989, the Administrator granted the owner's MCI
rent increase application based on the installation of a new concrete
courtyard and walkway, and an intercom system; partial rent increase grants
were approved for the parapet pointing and brickwork and building entrance
ADMIN. REVIEW DOCKET NO.: DE 210049.RT, et al
door installations. The Administrator denied those costs expended to
refurbish elevator cabs, demolishing and removing cement planter boxes,
rebuilding a water fountain wall, and for work done on the concrete floor
in the basement and new steps by the outside yard.
The tenants in their petitions assert, in substance and pertinent part,
that the newly installed intercom system does not function properly.
Several tenants further assert that under Docket Number 2AC 461255-386,
issued in 1972, the owner was granted an MCI rent increase for the very
same installation. Regarding the walkways and courtyard, the tenants
assert that they are not "new" but have always been there. The tenants of
apartment 2K assert that complaints they submitted when this proceeding was
before the Administrator below were not addressed. These tenants further
assert that an MCI rent increase previously granted under Docket No. BB
230161-0M when combined with the increase granted by the order appealed
herein, exceeds the codes 6% MCI rent increase cap.
The owner responds to several of the petitions asserting, in substance and
pertinent part, that the newly installed intercom system functions properly
and replaces one for which its useful life had expired. Regarding the
courtyard, the owner asserts that the installation included landscaping,
lighting, sidewalk repairs and new security doors and asserts that the MCI
rent increase was properly granted.
After careful consideration 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 Law 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.
With regard to the rent increase granted for concrete work, the record in
the instant case indicates that the owner correctly complied with the
applicable procedures for a major capital improvement and the Rent
Administrator properly computed the appropriate rent increases. The
tenants have not established that the rent increases should be revoked.
Accordingly, the Commissioner notes that the rent increases granted for the
concrete work was correct when issued and should be affirmed.
Regarding the petition from the tenants of apartment 2K, the Commissioner
notes that the record below does not contain an answer to the owner's MCI
application from the tenants of this apartment.
The Commissioner notes that the order itself limits the collection of the
increase resulting therefrom or any other prior MCI order to not more than
ADMIN. REVIEW DOCKET NO.: DE 210049.RT, et al
6% in any one year, with any overage collectable in succeeding years. The
Commissioner further notes that this tenant has not asserted that the owner
has in fact requested that those MCI rent increase monies in excess of 6%
be remitted and there is no evidence in the record which suggests this is
the case.
Accordingly, the Commissioner is of the opinion that, as regards the Code's
6% MCI rent increase cap, the Administrator's order was correct when issued
and should be affirmed. In any event, if an owner has been collecting rent
increases exceeding the 6% cap, tenants have the recourse of filing
complaints of rent overcharge
The Agency's current MCI useful life schedule for intercoms indicates that
an intercom's useful life is 15 years. The Commissioner notes that the
order issued under Docket Number 2AC 461255-386 was based on the
installation of adequate wiring and rewiring of existing bell and buzzer
and locked door system with intercom at a time when the agency did not have
a useful life schedule. However, there is no evidence in the record which
would suggest that the replaced intercom had prematurely exhausted its
useful life, as several tenants asserted when this proceeding was before
the Administrator below. In fact, the tenants in their petitions, assert
that the former intercom was functioning well at the time of its
replacement. In addition, by agency notice dated July 30, 1992 the tenants
were, and by agency notice dated September 14, 1992 the owner was,
requested to submit further evidence regarding the nature of the intercom
installation, within fourteen days of the notice; to date no further
evidence has been received by the Agency.
Accordingly, the Commissioner is of the opinion that, the record as
presently comprised does not show by a preponderance of the evidence that
the former intercom system had exhausted its useful life at the time of its
replacement.
Accordingly, the Commissioner is of the opinion and finds that the
Administrator's order should be modified in that so much of the MCI rent
increase attributable to the installation of an intercom should be revoked.
Accordingly, the total previously approved cost of $76,661.00 is reduced in
the amount of $10,656.00 which represents the previously approved cost of
the intercom installation. The above adjustment results in a reduced rent
increase of $1.89 per room per month for rent controlled and rent
stabilized tenants (computed in accordance with the formula set forth in
the Administrator's order).
The Commissioner notes that any excess rent paid by the tenants may be
credited to the monthly rent due on the first rent payment date following
the issuance of this order.
THEREFORE, in accordance with the Rent Stabilization Law and Code and the
Rent and Eviction Regulations for the City of New York, it is
ADMIN. REVIEW DOCKET NO.: DE 210049.RT, et al
ORDERED, that so much of the Administrator's order as granted an MCI rent
increase for the installation of cement walkways and courtyard be, and the
same hereby is, affirmed, and it is further
ORDERED, that so much of the Administrator's order as granted an MCI rent
increase based on approved costs of $10,656.00, for the installation of an
intercom be, and the same hereby is, revoked and the rent increase reduced
accordingly in accordance with this order and opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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