FF 410543-RT, et al.

                                  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 NO.: 
                                                  FF 410543-RT;   FF 410544-RT; 
                                                  FF 410545-RT;   FF 410546-RT;
                                                  FF 410547-RT;   FF 410548-RT;
                                                  FF 410549-RT;   FF 410550-RT;
                    VARIOUS TENANTS,              FF 410551-RT;   FF 410552-RT;
                                                  FF 410636-RT;   FF 410656-RT;
                                                  FF 410657-RT;   FF 410659-RT;
                                                  FF 410660-RT;   FF 410665-RT;
                                                  FF 410666-RT;   FF 410667-RT;
                                                  FF 410738-RT
                                                  
                                                  RENT ADMINISTRATOR'S
                                                  DOCKET NO.:
                                  PETITIONERS     DF 410255-OM
          ----------------------------------x


          ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN 
               PART AND REMANDING PROCEEDING TO THE ADMINISTRATOR          


          The above-named petitioner-tenants  timely  filed  Petitions  for
          Administrative Review against an order issued March 15, 1991 by a 
          Rent Administrator concerning the housing  accommodations,  known
          as various apartments at 108 West 15th Street, New York, New York 
          wherein the Administrator granted the application of the owner to 
          increase the rentals based on installation of windows as a  Major
          Capital Improvement (MCI).

          The Commissioner has reviewed all of the evidence on  the  record
          and has carefully considered that portion of the record  relevant
          to the issues raised in the administrative appeals.

          The owner commenced the proceeding  below  on  June  1,  1989  by
          filing an application to  increase  the  rentals  for  apartments
          based on the installation of Major Capital Improvements  consist-
          ing of new windows and a compactor.  The owner claimed  costs  of
          $48,515.00 for the installation of windows  and  $5,200  for  the
          compactor.

          In the application the owner indicated that the building contains 
          55 apartments all of which are rent stabilized with  a  total  of
          130 rooms.


          The owner certified that on  October  10,  1989  he  served  each
          tenant with a copy of the application and placed a  copy  of  the
          entire application package, including  all  required  supplements







          FF 410543-RT, et al.
          and supporting documentation with the resident superintendent  of
          the subject building.  

          A total of 17 tenants responded to the owner's application, 16 of 
          which only requested an extension of time to examine the applica 
          tion before submitting their answers.   One  tenant  specifically
          objected to the new windows, saying  they  were  unnecessary  and
          were only installed as an excuse to increase the  rent.   All  of
          the responses were received in October, 1989.

          On November 2, 1990, in response to a request  for  clarification
          from the Rent Administrator, the owner amended the application to 
          state that the total number of rooms in the building is  155  and
          not 130 and that the new windows were installed in all of them.

          In Order DF 410255-OM, issued on March 15, 1991, the Re t  Admin-
          istrator granted the  requested  increase  for  the  new  windows
          based on the full stated cost in the application  of  $48,515.00.
          The Administrator denied the increase for the compactor, however,
          because the owner failed to apply for it within two  years  after
          the work was performed.

          The petitions of all of the 19 tenants challenging the order con 
          tained the same typewritten statement prepared  by  an  attorney.
          The prepared statement contends that in the first place, the room 
          count upon which the increase is based is incorrect in  that  the
          "A","B", "G" and "K" line apartments have 3 1/2 rooms and  not  4
          rooms and the  "D"  line  has  4  1/2  rooms  and  not  5  rooms.
          Secondly, no windows were installed in the hallways in  spite  of
          the owner's claim that the  replacement  was  building-wide,  and
          that  this  constitutes  a  fraudulent  misrepresentation   which
          warrants a denial of the entire application, and  the  imposition
          of treble damages on top of a full refund to  the  tenants.   The
          statement also contends that the  replacement  was   unnecessary,
          that the owner failed to establish that it was a benefit  to  the
          tenants and that the  costs  were  excessive.   Furthermore,  the
          owner's  real  reason  was  to  create  a  "selling  point"   for
          converting  the  building   to   co-operative   ownership.    The
          statement concludes that the rent increase is  especially  unfair
          because the old windows would  not have needed replacement if the 
          owner had properly maintained them.

          In addition to the prepared statement, many of the petitions  had
          brief comments in the  appropriate  space  on  the  form.   These
          included calling the new windows "unnecessary," and that the  new
          ones were inferior or  improperly  installed.   A  few,  however,
          said the old ones did have  to  be  replaced  because  they  were
          poorly maintained, which was why the tenants should not  have  to
          pay for them.

          In its answer, the owner states that the hall  windows  were  not
          replaced and were not  part  of  the  total  window  count.   The
          replaced windows,  however, were over 25 years old  and  had  ex-
          ceeded their useful life.  Furthermore, the cost of  $155.00  per
          window is less than the $165.00 approved  under  New  York  State
          valuation standards.  The  owner  also  objects  to  the  tenants
          raising arguments for the first time  on  appeal.   Finally,  the
          owner notes that the room count is correct under RSA standards.







          FF 410543-RT, et al.

          The Commissioner is of the considered opinion that  the  tenants'
          petitions should be granted in part and that  the  proceeding  be
          remanded to the Rent Administrator.

          Rent increases for major capital improvements are  authorized  by
          Section 2522.4 of the Rent Stabilization Law 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 rent  increase
          is computed based on an amortization of  the  cash  cost  of  the
          improvement.  All of the apartments in the  subject-building  are
          rent stabilized.

          The tenants' contention that the window  installation  cannot  be
          considered building-wide because of the omission  of  windows  in
          the hallways is incorrect.  The Commissioner has held  that  such
          circumstances do not mean that the replacement was not done on  a
          building-wide basis, especially if the  actual  improvement  con-
          sisted of replacing all windows in all apartments, which resulted 
          in benefits to every tenant.  Moreover, had the hallways  windows
          been replaced, this cost would only have been factored  into  the
          total cost, resulting in an even higher increase (ARB Docket  No.
          ART 07981-B et al.).  The claim that the replacement was unneces 
          sary is also without merit, since the record is  undisputed  that
          the windows were over 25 years old  and,  according  to  previous
          holdings, are meriting of an MCI increase regardless of their 
          condition (ARB Docket No. ART 00840-W).  The  general  objections
          that the claimed cost has not  been  substantiated  is,  firstly,
          disputed  by  the  owner's  documentation  in  the   record   and
          secondly, is inadmissible since it had not been raised by any  of
          the tenants in the record below, and cannot  be  raised  for  the
          first time on appeal.   The  contention  that  the  owner's  real
          purpose  for  the  replacement  was  as  a  "selling  point"   in
          converting the building to a co-operative  does  not  lessen  its
          benefit to the  tenants,  and  is  no  reason  not  to  grant  an
          authorized  rent  increase.   Finally,  the  contention  that  no
          replacement would have been necessary if the owner  had  properly
          maintained the windows, besides contradicting the tenants'  claim
          that the old windows  were  still  adequate,  is  also  meritless
          because of the aforementioned 25  year  useful  life  policy  and
          because none of the tenants had filed service complaints charging 
          deterioration of the old windows.

          However, the claims of 9 petitioners that the number of rooms  in
          apartments in the "A, "B," "G" and "K" lines is 3 1/2 and  not  4
          and in the "D" line is 4 1/2 and not 5,  cannot  be  verified  by
          documentation in the record.  It is noted that the tenants' claim 
          corresponds to the owner's original room count, which was  stated
          in the application that was mailed to each tenant, but  that  the
          owner revised it pursuant to a request for additional information 
          from the Administrator, and this revised count was never known to 
          the tenants prior to the issuance of  the  order.   Although  the
          amount of the claim that was approved is not subject  to  change,
          since the total cost and number  of  windows  installed  are  not
          affected, the cost per room as well  as  the  rent  increase  per







          FF 410543-RT, et al.
          tenant, as based on the room count in each apartment, will depend 
          upon the  verified  room  count.   The  proceeding  is  therefore
          remanded to the Rent Administrator for a  determination  of  this
          issue in accordance with the standards promulgated in the  DHCR's
          Policy Statement (90-3), and  the  appropriate  revision  of  the
          order, if required.

          This order and opinion is issued without prejudi e  to  the  ten-
          ants' filing applications with the Division for  rent  reductions
          based on a decrease in services, if the facts so warrant.


          THEREFORE, in accordance with the applicable  provisions  of  the
          Rent Stabilization Law and Code, it is       









          ORDERED, that these  petitions  be,  and  the  same  hereby  are,
          granted in part, and that the proceeding be remanded to the  Rent
          Administrator for further  processing  in  accordance  with  this
          order and opinion. The automatic stay of  so  much  of  the  Rent
          Administrator's order as directed a retroactive rent increase  is
          hereby continued  until  a  new  order  is  issued  upon  remand.
          However, the Administrator's determination as  to  a  prospective
          rent increase is not stayed and shall remain in effect until  the
          Administrator issues a new order upon remand.

          ISSUED:


                                                                           
                                                ELLIOT SANDER
                                                Deputy Commissioner


                                          
    

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