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
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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
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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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