DK 430026-RT
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. DOCKET NO.: 5758
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.:
DK 430026-RT
JERRY JONTRY, RENT ADMINISTRATOR'S
DOCKET NOS.:
DD 430078-RP;
PETITIONER AB 410083-OM
----------------------------------x
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On November 20, 1989, the above-named tenant, filed a petition
for administrative review of an order issued on October 25, 1989,
by a Rent Administrator concerning various housing accommodations
in the premises known as 440 East 57th Street, New York, New York
wherein the Rent Administrator determined that the owner w s en-
titled to a rent increase based on major capital improvements
(MCI).
Subsequent thereto, the owner commenced a proceeding in the
Supreme Court pursuant to Article 78 of the Civil Practice Law
and Rules seeking an order, in the nature of mandamus to direct
the Division of Housing and Community Renewal (DHCR) to issue a
determination regarding the petition for administrative review
(PAR). On August 19, 1991 the Court, Sklar, J., issued an order
directing the DHCR to determine the PAR within ninety days.
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 the petition for review.
The owner commenced this proceeding on February 6, 1986 by filing
an application for a rent increase based on major capital
improvements, to wit - mobilization, various itemized masonry
work, tiles, recaulking, cleanup and engineering at a total cost
of $502,329.00.
The owner certified that on April 7, 1986 it served each tenant
with a copy of the application and placed a copy of the entire
application including all required supplements and supporting
documentation with the resident superintendent of the subject
building.
The tenants' association, by its attorney, interposed an answer
to the owner's application raising eleven separate objections to
the rent increase.
DK 430026-RT
On January 11, 1989, the Rent Administrator issued an order here
under review finding that some of the work qualified as major
capital improvements, determining that the application complied
with the relevant laws and regulations based upon the supporting
documentation submitted by the owner, and allowing appropriate
rent increases for rent stabilized apartments.
Of the $502,329.00 claimed by the owner, $284,429.00 was approved
as qualifying for major capital improvement rent increases. The
remaining costs were disallowed.
Various tenants and the owner filed petitions for administrative
review of the MCI rent increase order. The petitions were con-
solidated.
On appeal, the tenants contended in substance, that:
1. The work done did not constitute major capital
improvements but was normal maintenance and repair
work made necessary by the owner's neglect;
2. The masonry repair work was needed to preve t law-
suits by pedestrians injured by falling masonry;
3. The repair job on the main roof was done poorly
and structural damage and defective conditions
still existed on the premises;
4. Some residents were not charged for the MCI (co-op
owners);
5. The upper floor tenants still complain of roof
leaks; and
6. An engineer's report prior to the co-operative
conversion of the building (dated February 9,
1981), showed a defective roof which should have
been repaired prior to the conversion. In support
of their contentions, the tenants submitted a copy
of the inspection report, which stated that the
cost range for the roofing work in questions was
$49,500 to $60,000.
On its appeal, the owner contended in substance, that the Admin-
istrator should have allowed total costs of $502,329.00 for the
work stating that the installation of quarry tiles on terrace
roofs, mobilization and removal of scaffolding, clean-up costs,
and engineering fees all qualified for the MCI increases. Owner
argued that the replacement of the terrace roofs was part of the
replacement of the main roof area, and that the other expenses
qualified since they were incurred for work necessary to install
the improvements.
On April 7, 1989 the Commissioner issued an order and opinion in
Docket No. DB 410007 et al, remanding the proceeding to the Rent
DK 430026-RT
Administrator for further processing.
On October 25, 1989 the Rent Administrator in Docket No. DD
430078-RP issued an Order Pursuant to Remand, here under review
finding that $469,000 of the work qualified as major capital
improvements determining that the application complied with the
relevant laws and regulations based upon the supporting documen-
tation submitted by the owner, and ordering an increase of $22.72
per room per month for rent stabilized apartments.
The instant petition seeking review of the Order Pursuant to
Remand (DD 430078-RP) was filed by the tenant of Apartment 12-B
on his own behalf and, purportedly, on beha f of "various ten-
ants", a list of whom is attached to the petition, but the tenant
of Apartment 12-B did not submit at the time of the filing of the
PAR written evidence of authorization to act in su h representa-
tive capacity for the purpose of filing the PAR. The tenant
requests that the Rent Administrator's order be vacated alleging
that the tenants have not been given an opportunity to secure
access to the owner's entire submission despite their requests
for same, that a portion, if not all, of the funds used for the
improvements were from the reserve funds of the co-operative
apartment corporation, and that the tenants were denied due
process by reason of the fact that their former attorney joined
the law firm of the owner during the pendency of the owner's
application without notice to or permission of the tenants.
In answer to the tenant's petition the owner alleges inter alia
that the tenants' allegation - that they were deprived of their
rights to review the Division's file - is being raised for the
first time on appeal and that the tenants did not make a Freedom
of Information Law (FOIL) request to review said file. The
owner further contends that no Reserve Funds were used, that the
Rent Administrator raised this issue during the original pro-
ceeding and resolved the issue in favor of the owner, and that
the tenant has offered no evidence that Reserve Funds were used.
The owner states that the tenants' allegation that a conflict of
interest occurred by virtue of their former attorney's joining
the law firm of the owner without their permission is without
merit. Finally, the owner argues that the petition is defective
and should be dismissed in that it was executed by an attorney
who failed to submit written evidence of authorization to act in
such a capacity pursuant to Section 2529.1(b)(2) of the Rent
Stabilization Code.
After careful consideration the Commissioner is of the opinion
that this petition should be denied.
The Commissioner notes that on April 7, 1986 the owner certified
that it served each tenant with a copy of the application and
placed a copy of the entire application including all required
supplements and supporting documentation with the resident
superintendent of the subject building. The records of this
Division do not reveal that the tenants ever filed a Freedom of
DK 430026-RT
Information Law (FOIL) request nor does the tenant even allege
that a request to inspect documents pursuant to FOIL was made at
any time. Accordingly, the Commissioner finds that the tenants
were not denied due process in the proceedings based on the alle
gation that they were not given the opportunity to secure access
to the owner's submission.
On the issue of reserve funds, the Commissioner notes that an
examination of this issue by the Rent Administrator resulted in
the determination that reserve funds were not used to pay for
major capital improvements. The Commissioner notes that the
tenant has offered no evidence to substantiate the allegation.
Accordingly, the tenant has offered insufficient reason to
disturb the Rent Administrator's determination on this issue.
On the issue of an alleged conflict of interest on the part of
the tenants' former attorney occasioned by the fact of her
subsequent coincidental employment with the owner's firm, the
Commissioner notes that the petitioner has not indicated any
breach of fiduciary duty or revelation of confidential informa-
tion which may have prejudiced the tenants' case nor does the
record reveal that any confidential information was relied upon
by the administrator. The petitioner has not alleged any facts
or offered any evidence to suggest a violation f any attorney-
client privilege or other circumstance constituting a denial of
due process. It is finally noted that apart from the allegation
of a denial of due process, the conflict of interest allegation
made by the petitioner is beyond the scope of jurisdiction of
this Division and this order is without prejudi e to the peti-
tioner's right to seek, other relief in an appropriate forum if
facts, additional to those contained in the record, so warrant.
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 record in the instant case indicates that the owner correctly
complied with the application procedures for a major capital
improvement and the Rent Administrator properly computed the
appropriate rent increases. The tenant has not established that
the increase should be revoked.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be, and the same hereby is, denied
and that the Rent Administrator's order be, and the same hereby
is, affirmed.
DK 430026-RT
ISSUED:
ELLIOT SANDER
Deputy Commissioner
|
