Adm. Rev. Docket Nos: EG 630151-RO; EH 610452-RT; 
                              EI 620087-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 
        IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
        APPEALS OF                          :  DOCKET NOS.: EG 630151-RO
                                            :               EH 610452-RT (REFILE)
            HDS FUNDING CO.                 :               EI 620087-RT (REFILE)
            (HARRY SILVERMAN)               :   
            STEPHEN HUBEL and MARION RAFALO :  DRO DOCKET NO.: BG 630520-OM
                                            : 
                            PETITIONERS     : 
        ------------------------------------X                           
          

           ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
          DOCKET NO. EH-610245-RT AND EI 620087-RT; GRANTING PETITION FOR
            ADMINISTRATIVE REVIEW DOCKET NO. EG-630151-RO AND REMANDING
                       PROCEEDING FOR MINISTERIAL PROCESSING

        On July 9, and August 10, 1990 and September 1 ,  1991,  the  above-
        named  petitioner-owner  and  tenants  filed  and   timely   refiled
        Petitions for Administrative Review against an order issued on  June
        5, 1990 by the Rent Administrator, 92-31 Union Hall Street, Jamaica, 
        New York concerning housing accommodations known as 3971  Gouverneur
        Avenue,  Bronx,  New   York,   Various   apartments,   wherein   the
        Administrator  granted  in  part  the  major   capital   improvement
        application and authorized a rent increase adjustment based  on  the
        installation of a new compactor, oil burner/boiler  and  replacement
        windows  (building-wide).   A  requested  increase  for   the   1987
        installation of a new roof  (including  insulation)  was  denied  on
        grounds that a roof resurfacing of less than "3 ply" did not qualify 
        as a major capital improvement.  

        In his petition for administrative review (EH 630452-RT) the  tenant
        of apartment 1-J, contends, in substance, that the  work  recognized
        by the Administrator was in the nature of required repairs for which 
        a rent increase should not have been granted.

        In her Petition for Administrative Review (EI 620087-RT) the  tenant
        of apartment 6-F contends, in substance, that it was error  to  have
        granted an  increase  for  the  boiler/burner  10  years  after  its
        installation in 1980;  and  that  an  opportunity  to  examine  DHCR
        records is requested pursuant to the Freedom of Information Act.

        In its petition for administrative review, against so  much  of  the
        Administrator's  order  as  disallowed  an  increase  for  the  roof
        installation,  the  owner  contends,   in   substance,   that   said
        installation (consisting of two plys of 90 lb. felt plus blown fibre 
        glass insulation) satisfied agency requirements at the time the work 


        was performed; and that it was error for the Administrator to have 
        given retroactive effect to a new standard promulgated  three  years
        after the work was completed.








        Adm. Rev. Docket Nos: EG 630151-RO; EH 610452-RT; 
                              EI 620087-RT
        In response thereto the tenant of one apartment (6-F) questions  the
        adequacy of the roof insulation but does not otherwise challenge the 
        quality of the total roof installation.

        After a careful consideration of the entire record, the Commissioner 
        is of the opinion that the tenants' petitions (Docket No. EH 610
        425-RT and EI 620087-RT) should be  denied;  and  that  the  Owner's
        petition (Docket  No.  EG  630151-RO)  should  be  granted  and  the
        proceeding remand for ministerial processing in accordance herewith.

        It is the established position of the Division that the installation 
        of  a  new  heating  system,   compactor   and   the   building-wide
        installation of new windows to replace windows which are 25 or  more
        years  old  (as  is  the  case  herein)  constitute  major   capital
        improvements for which a rent increase may  be  warranted,  provided
        the owner otherwise so qualifies.  In this case the record discloses 
        that the owner substantiated its application  with  respect  to  the
        aforementioned  items,  as  well  as  the  1987  roof   resurfacing,
        consisting of a two ply cap-sheet (two layers of heavy roofing  felt
        cemented to solid roof sheeting  and  to  each  other  with  tar  or
        similar material), by  the  submission  of  contracts,  contractor's
        certifications, cancelled checks in payment of  same  and  requisite
        governmental approvals and sign-offs  for  the  new  heating  system
        installed in 1980.  No sustainable objection to the quality  of  the
        aforesaid improvements has been raised by the tenants, either in the 
        proceeding below or on appeal.

        The Commissioner notes that the current Rent Stabilization Code  now
        contains a two year statute of limitations  on  the  filing  of  new
        applications  predicated  on  major   capital   improvements.    The
        effective date of this restriction was extended to  August  1,  1987
        pursuant to Advisory Opinions 87-1  and  87-8.   Since  the  instant
        application was filed with the  Division  on  July  31,  1987,  this
        restriction (which did not exist in the old Code) did not apply with 
        respect  to  the  heating  system  which  is  the  subject  of  this
        proceeding.  It is further noted that the records  of  the  Division
        disclose that no rent reduction  orders  based  on  the  failure  to
        maintain adequate heat or other services were in effect  as  of  the
        issuance of the order appealed herein nor was any  such  application
        pending at that time.  The determination herein is without prejudice 
        to the right of the tenant to pursue her FOIL request.

        Whereas the Administrator's determination with respect to  the  roof
        was predicated on  a  newly  issued  Policy  Statement  (90-6),  the
        Commissioner notes that the eligibility requirements  of  a  roofing
        installation, for consideration as a major capital improvement,  was
        effectively revised pursuant  to  Policy  Statement  (91-2),  issued
        February 26, 1991, and made effective 30 days thereafter.  As 


        stated therein, a roof cap consisting of a singly ply of traditional 
        asphalt based materials (a top sheet) will no longer be considered 
        eligible for a major capital improvement  rent  increase.   However,
        complete roof removals and replacements with multi-ply roof caps  of
        at least two ply asphalt-based materials (as  is  the  case  herein)
        are and will continue to be eligible as major capital  improvements.
        In addition, roof insulation when performed in conjunction with a 







        Adm. Rev. Docket Nos: EG 630151-RO; EH 610452-RT; 
                              EI 620087-RT
        qualifying new roof resurfacing constitutes work for  which  a  rent
        increase is warranted.

        Accordingly, the Commissioner deems it appropriate  to  remand  this
        proceeding to the Administrator to recalculate the allowable  rental
        increase for the roofing installation involved herein  in  order  to
        effectuate the determination herein.

        THEREFORE,  in  accordance  with  the   provisions   of   the   Rent
        Stabilization Code and the Rent and  Eviction  Regulations  for  New
        York City, it is

        ORDERED, that tenants' petitions for administrative  review  (Docket
        No. EH 610425-RT and EI 620087-RT) be,  and  the  same  hereby  are,
        denied; that the owner's petition, (Docket No.EG 630151-RO), be  and
        the same  hereby  is,  granted  to  the  extent  of  remanding  this
        proceeding to the Rent Administrator for processing of a ministerial 
        nature in accordance with this order and  opinion.   The  order  and
        determination of the Rent Administrator remains in  full  force  and
        effect until a new order is issued upon the remand.

        ISSUED:




                                                                     
                                        ELLIOT SANDER
                                        Deputy Commissioner
    

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