ADM. REVIEW DOCKET NO. FC 730327-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. 5871
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. FC 730327-RO
:
DISTRICT RENT ORDER
FLOWERVIEW APT. ASSOCIATES DOCKET NO. EB-71-0037-OM
C/O MARTIN A. SHLUFMAN
PETITIONER :
------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On March 28, 1991 the above-named petitioner-sponsor and
holder of unsold shares filed a Petition for Administrative Review
against an order issued on February 22, 1991 by the Rent
Administrator, 50 Clinton Street, Hempstead, NY concerning the
cooperatively owned housing complex known as Flowerview
Apartments, 5 Adelaide Street, 55 Tulip Avenue and 91 Tulip
Avenue, Floral Park, New York, various apartments, wherein the
Administrator authorized a major capital improvement rent increase
for the installation of 25 new roofs ($255, 375.00). Disallowed
by the Administrator was a claimed $5,000.00
supervision/consultant fee with respect to the roofing
installation and a claimed expenditure of $36,000.00 for three
master T.V. antennae.
Thereafter the landlord herein commenced a proceeding
pursuant to Article 78 of the Civil Practice Law and Rules, having
deemed its petition denied by operation of law. This resulted in
a court ordered stipulation remanding this proceeding to the
Division for further consideration.
In its petition for administrative review the landlord herein
contends, in substance, that the fee expended to the consulting
firm to oversee the installation of the new roofs should have been
recognized as an expense in computing the major capital
improvement increase allowed therefor due to the scope of the
project, urging that such fee is no different from an engineering
fee "allowed by DHCR" in connection with heating and hot water
systems where the nature of such installation justified such
consultation. The landlord further contends that it was error to
have disallowed the expense for master T.V. antennae as they meet
the definition of a major capital improvement since to permit
tenants to reinstall their roof antennae might result in damage to
the roof membrane, thus voiding the manufacturer's warranty; and
that such installation would also fall within the definition of a
"cosmetic improvement" performed in connection with a qualifying
ADM. REVIEW DOCKET NO. FC 730327-RO
major capital improvement (roof) as authorized under Operational
Bulletin 84-4.
After a careful consideration of the entire record, the
Commissioner is of the opinion that this petition should be
denied.
With respect to the petitioner's contention that the
consultation fee paid to "Construction Unlimited" was improperly
disallowed, the Commissioner notes that a major capital
improvement of this type is relatively commonplace and a landlord
is presumed to have sufficient knowledge to select a roofing
contractor of a known and sufficient capability to ensure that it
will receive a quality installation adequate to meet the needs of
the premises to be supplied. It is the established position of
the Division that a "consultant fee" normally does not qualify as
an allowable major capital improvement expense. Contrary to the
assertion on appeal, the Commissioner has not authorized a major
capital improvement rent increase for consultant/engineering fees
in connection with heating installations or otherwise albeit
owners have been afforded the opportunity to establish the
necessity for the claimed expenditure.
Turning to the case at hand, the record discloses that the
cooperative corporation engage a licensed roofing contractor to
reroof 25 buildings in a five phase project. Said contract
provides that the contractor "shall not commence any subsequent
Phase nor receive payment for any prior Phase, unless and until
(ii) manufacturer's representative [as opposed to an owner's rep-
resentative] performs a satisfactory inspection of the phase
completed". Upon completion of the installation a "Manufacturer's
twelve (12) year material and labor warranty will be supplied by
the Contractor." The petitioner has not shown that the services
of the owner's consultant were at all a necessary and integral
part of the installation, particularly in light of the terms of
the contract under which the work was performed. The Commissioner
finds that the Administrator properly excluded the claimed
consultant expense from the calculation.
With regard to the petitioner's contention that it was error
to have disallowed the cost of installing master TV antennae (3),
the Commissioner notes that a television antenna does not
constitute an improvement required for the operation, preservation
or maintenance of the premises nor is it an improvement which
inures to the benefit of all tenants since it is undisputed that
many tenants use indoor antennae or have cable service.
While the petitioner/sponsor alleges that many tenants
installed roof antennae in contravention of their lease
agreements; and that the reinstallation of same by the tenants
might result in "possible" damage to the roof membrane, it is
undisputed that said roof antennae were previously installed
openly and notoriously; and that the petitioner herein, as
landlord of the premises, took no steps to enforce the alleged
lease prohibition. The Commissioner is of the opinion that where
such antennae are installed with the landlord's express or implied
consent, and where such antennae are removed by the
ADM. REVIEW DOCKET NO. FC 730327-RO
landlord/property owner to perform repairs or other exterior work
such as the installation of new roofs, that the landlord, rather
than the individual tenant, remains responsible for the
reinstallation of same in a workmanlike manner.
Tenants who formerly had the benefit of obtaining adequate TV
reception by installing their own TV antennae may not be deprived
of this service. The landlord was obligated to either reinstall
such TV antennae or provide an adequate equivalent service, such
as Master TV antenna made available to the tenants free of charge.
The failure to do so would constitute a decrease in service so as
to justify an appropriate penalty (BH 630115-RO; C.I. 7-1-0012 S
issued with respect to the subject premises).
Regarding the landlord's contention that the master TV
antennae were installed contemporaneously with the roofing
installation and fall within the definition of a "cosmetic
improvement" for which a rent increase should be allowed,
Operational Bulletin 84-4 specifically requires that the work must
be directly related to and be completed within six months of the
qualifying major capital improvement. The record discloses that
the roofing installation herein was completed in late October
1988; and that work on the master TV antennae did not commence
until May 25, 1989 and was not completed until seven months later.
On that basis alone the work in question fails to satisfy the
requirements for a rent increase under Operational Bulletin 84-4.
THEREFORE, in accordance with the provisions of the
Emergency Tenant Protection Act and Regulations, it is
ORDERED, that this petition be, and the same hereby is
denied; and that the order of the Rent Administrator be, and the
same hereby is, affirmed.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
ADM. REVIEW DOCKET NO. FC 730327-RO
|
