DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET NO.: EH530167RO
RUTHANN RICHERT, C/O
410 LENOX APTS., INC.
PETITIONER DOCKET NO.: DD510035OM
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On August 16, 1990, the above named petitioner-owner filed a
petition for administrative review (PAR) of an order issued on July
25, 1990 by the Rent Administrator, concerning the housing
accommodations known as 410 Lenox Avenue, New York, NY, various
apartments, wherein the Administrator denied the owner's
application for a major capital improvement (MCI) rent increase
which was based on the installation of mailboxes, entrance doors,
upgraded lighting and an intercom system, because of an outstanding
rent reduction order.
The Commissioner has reviewed all of the evidence in the record and
has carefully considered that portion of the record relevant to the
issue raised by the administrative appeal.
On July 25, 1990 the Rent Administrator issued the order here under
review, finding that a building-wide rent reduction order under
Docket No. AJ530112B, issued on September 3, 1987, is still in
In this PAR, the owner requests reversal of the Rent
Administrator's order and contends, in substance, that since the
rent reduction order was issued before the owner purchased the
building, the owner was unaware of the outstanding rent reduction
order; and that the DHCR policy of denying MCIs due to the
existence of an outstanding rent reduction order is in excess of
DHCR's statutory authority.
The tenants did not file objections to the owner's application
although afforded the opportunity to do so.
In addition, the owner submitted as evidence a letter dated
December 18, 1990 from the tenant who filed the complaint that
resulted in the rent reduction order being granted, stating that
the owner has repaired all problem conditions to her satisfaction.
ADMIN. REVIEW DOCKET NO. EH530167RO
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that this petition should be denied.
A review of Division records discloses that no application for rent
restoration was filed by the owner with DHCR.
The owner's contention that it should not be responsible for the
rent reduction order because it was issued prior to its purchase of
the building is without merit. The purchaser of a building steps
into the shoes of its predecessor in interest and assumes all the
liabilities as well as assets of the previous owner, including any
rent reduction orders that were issued prior to the purchase of the
building. The existence of all DHCR orders and proceedings is
available to purchasers and new owners of buildings upon request of
The owner's assertion that DHCR has exceeded its statutory mandate
is erroneous. An owner of a rent stabilized apartment is required
by Section 26-514 of the Administrative Code of the City of New
York to maintain all required services and the failure to do so as
evidenced by the issuance of a building-wide rent reduction order
bars the owner from "applying for or collecting any further rent
This statutory mandate is codified in Sections 2523.4(a) and
2522.4(a)(13) of the Rent Stabilization Code and further amplified
in Policy Statement 90-8, by providing that where there is an order
in effect determining a failure to maintain a building-wide service
which resulted in a rent reduction, such order will constitute a
bar to obtaining an MCI rent increase. A subsequent restoration of
rent based upon a finding of service restoration will result in the
prospective elimination of this sanction.
This bar applies despite any acknowledgements by the tenants that
services have been restored.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
ORDERED, that this petition be and the same hereby is, denied and
that the order of the Rent Administrator be, and the same hereby
LULA M. ANDERSON