DOC. NO. DK 130237-RO
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 S.J.R. NO. 5413
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. DK 130237-RO
L.M.S. EQUITIES, : DISTRICT RENT ORDER
PETITIONER : DOCKET NO. BD 130304-OM
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ORDER AND OPINION REMANDING PETITION FOR ADMINISTRATIVE REVIEW
On November 28, 1989 the above named petitioner filed a Petition
for Administrative Review against an order issued on October 24,
1989 by the Rent Administrator, 92-31 Union Hall Street, Jamaica,
New York, NY concerning the housing complex known as Georgetown
Mews, 69-17 150th Street Flushing, New York, various apartments,
wherein the rent increase application was denied.
On September 28, 1990, the Commissioner issued an Order and Opinion
Denying Petition for Administrative Review. Thereafter the
petitioner and the now current holder of all unsold shares
(Overseas Commodities, Ltd.) 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 result
in an order of the Court, Justice Joan Marie Durante, remanding the
proceeding to the Division for further consideration.
The instant matter stems from an application filed with the
Division on April 24, 1987 wherein the petitioner, as then holder
of all unsold shares, sought a major capital improvement rent
increase from all rent regulated units in this cooperatively owned
housing complex which is comprised of four sections (A-D)
containing a total of 38 two-story "building clusters" with 465
building address and 930 garden type apartments, approximately one-
half of which are cooperatively owned. The petitioner's
application is predicated on total claimed costs of $4,122.621.40,
for the following improvements:
Pointing $ 257,850.00
DOC. NO. : DK 130237-RO
Masonary including Garage and of chimneys $ 269,723.00
(added twice)
Walkways, Courtyards & Stoops $ 704,987.60
Adequate Rewiring $1,200,000.00
Mailboxes $ 46,077.00
Roofing $ 80,600.00
Entrance Doors to Apartments $ 37,950.00
Front Doors $ 225,165.28
Intercom $ 36,469.25
Windows $1,263,799.17
The order of the Administrator, which was affirmed on appeal,
denied the application upon finding that the petitioner failed to
submit written contracts (with the exception of electrical work)
for the improvements claimed; that the invoices bear no description
of the work performed and are not considered acceptable
documentation; that several improvements: roof installation,
apartment doors, bell and buzzer system and mailboxes, are not
major capital improvements and/or do not benefit all tenants with
similar components in the complex; that chimneys are not mentioned
in the petitioner's application for Tax Exemption/Tax Abatement
and/or additional components needed for the installation; that the
petitioner's submission of evidence has no description of the work
completed or how many replaced; that several buildings were missing
electrical certificates; and that there is a general failure to
provide contracts that describe the work performed under the
provisions of the Code.
In its Article 78 petition the petitioner herein contends, among
other things, that the order was contrary to established agency
policy; that inadequate consideration was given to the New York
City Department of Housing Preservation and Developments'
Certificate of Eligibility (qualifying the work as a "moderate
rehabilitation" as prima facia evidence of proper installation with
respect to 9 of the 10 items involved herein; that it was error to
have denied the application based on the absence of "original
contracts" since the work, for the most part, was performed
pursuant to verbal agreements; particularly in view of the
DOC. NO. : DK 130237-RO
Division's stated policy recognizing the need for equitable
consideration in permitting an applicant to submit alternate proof;
that Certificates of Electrical Inspection were submitted for all
"building clusters" within the complex which buildings were
adequately rewired; and that the Division improperly denied
rent increases for specific improvements such as roofs, bell and
buzzer system, windows, courtyards etc., for which complete
installations were made either on a complex-wide or building-wide
basis.
The Commissioner is of the opinion that the record, as presently
constituted, is inadequate for a proper determination of all issues
and according to this proceeding should be remanded to the Rent
Administrator for further processing in accordance with this order
and opinion.
At the outset the Commissioner notes that the absence of a written
contract, in and of itself, may not be the basis for the denial of
a major capital improvement rent increase where the owner has
submitted other satisfactory evidence of installation and payment
therefor. In addition, it would appear that there was an
electrical upgrading of the entire housing complex pursuant to
written contract; and that Certificates of Electrical Inspection
were, in fact, submitted for all 38 "building clusters" which
comprise the complex. It would further appear that new thermal
replacement windows were installed on a complex-wide basis. In
view of the size of the complex (930 apartments) and the number of
windows (over 7,500), the fact that minor defects were noted with
respect to windows installed in only 15 apartments scattered
throughout the complex should not have acted as a complete bar to
a major capital improvement rent increase therefor, particularly
without investigation of the petitioner's subsequent contention
before the Administrator that such defects were timely corrected.
In view of the foregoing, the Commissioner deems it appropriate to
remand this proceeding to the Rent Administrator for further
processing and consideration of all issues, and for the issuance of
a new determination. Upon the remand the Administrator may
undertake such processing as may be deemed necessary, which may
include a physical inspection and/or hearing on notice to all
affected parties. The tenants should be afforded the opportunity
to respond to any evidence or statements submitted by the
petitioner prior to the issuance of the Rent Administrator's order
DOC. NO. : DK 130237-RO
on the remand. Such order should, on an item by item basis, set
forth the specific reasons for the grant or denial thereof.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Code, it is
ORDERED, that this proceeding be, and the same hereby is remanded
to the Rent Administrator for further processing in accordance with
this order and opinion.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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