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. 6265
     IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
     APPEAL OF                              DOCKET NO. FA 630315-RO
                                         :  
       FINKELSTEIN MORGAN for               RENT ADMINISTRATOR'S
       DREW DEVELOPMENT LTD.,               DOCKET NO. DF 630045-OM
                           PETITIONER    : 
     ------------------------------------X                             

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

     On January 30, 1991 the above named petitioner-owner filed a Petition  for
     Administrative Review against an order issued on January 21, 1991  by  the
     Rent Administrator, 92-31 Union Hall Street, Jamaica, New York  concerning
     housing accommodations known as 111  Mt.  Hope  Place,  Bronx,  New  York,
     various accommodations.

     Subsequent thereto, the petitioner-owner filed a petition in  the  Supreme
     Court pursuant  to  Article  78  of  the  Civil  Practice  Law  and  Rules
     requesting a resolution of the petitioner's administrative  appeal.   This
     resulted  in  an  order  of  the  court  directing  Division  to  issue  a
     determination on this petition.

     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.

     This proceeding was commenced on May 11,  1989  by  the  owner  filing  an
     application for a major capital improvement (MCI) increase  based  on  the
     installation of new windows at the subject premises.  The owner indicated, 
     in substance, that its prior request for MCI increases for new windows was 
     denied as being a partial replacement of windows; that the windows had now 
     been replaced building-wide; and  that  it  was  now  "refiling"  its  MCI
     application.  The owner submitted documentary evidence showing it had made 
     expenditures totaling $93,540.00 for said installation.

     Various tenants responded to the owner's "refiled" application but  failed
     to raise  any  objections  to  the  quality  or  adequacy  of  the  window
     installation.

     In the order appealed herein, the Rent Administrator determined  that  the
     owner had failed to  file  its  application  within  two  years  from  the
     completion date  of  the  installation;  and  that  the  installation  was
     performed in  piecemeal  fashion  by  two  different  contractors  over  a
     seventeen month period.

     In this petition  the  owner  contends,  in  substance,  that  the  window
     installation was physically completed and paid for in July, 1987; that the 
     MCI application was filed  on  May  9,  1989,  within  two  years  of  the
     completion of the work; that although the original contractor was paid to






          DOCKET NUMBER: FA 630315-RO
     replace all 595 apartment windows, it became aware that seven windows  had
     not been replaced; that the original MCI application was denied before the 
     second contractor could complete the  remaining  installations;  that  the
     delay in the completion of the installation was due to the fact  that  the
     owner was not immediately aware there was a problem and the scheduling  of
     the work had to be coordinated  with  other  incomplete  jobs  the  second
     contractor was hired to finish; that its intention was always "to complete 
     the window installation 100%"; that it did not consider  the  installation
     to be piecemeal; and that the fact that all windows were  replaced  within
     this time frame qualifies the work for an MCI increase.

     Various tenants responded to the owner's petition but failed to raise  any
     objections to the quality or adequacy of the window installation.

     The Commissioner is of the opinion that this proceeding should be  granted
     in part and remanded for further processing.
      
     Rent increases for major capital improvements are  authorized  by  Section
     2202.4 of the Rent and Eviction Regulations for rent controlled apartments 
     and Section 2522.4 of the Rent  Stabilization  Code  for  rent  stabilized
     apartments.  Under rent control, an increase is warranted where there  has
     been since July 1, 1970 a  major  capital  improvement  required  for  the
     operation, preservation, or maintenance  of  the  structure.   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.

     It is the established position of  the  Division  that  the  building-wide
     installation of new  apartment  windows  and/or  public  area  windows  to
     replace windows which are 25 or more years old (as  is  the  case  herein)
     constitutes  a  major  capital  improvement  for  which  a  rent  increase
     adjustment may be warranted, provided the owner  otherwise  so  qualifies.
     In this respect, the Commissioner notes that work of  a  piecemeal  nature
     or ordinary repairs and maintenance does not qualify as  a  major  capital
     improvement.

     On July 31, 1987, in an order issued under Docket No.  AE  610071-OM,  the
     Rent Administrator determined that the owner was not entitled  to  an  MCI
     increase for the installation of  replacement  windows  installed  between
     February and April 1986 because the installation  was  not  building-wide.
     (MCI increases were approved for various other items  which  are  not  the
     subject of this proceeding.)  The record therein shows that shortly  prior
     to the issuance of said order the owner  advised  the  Administrator  that
     although all windows were paid for, it became aware that some of them were 
     not installed; that the contractor was no longer in business; and that  it
     had made arrangements with another  contractor  to  correct  the  problem.
     Based on the evidence of record, including the documentation submitted  by
     the owner in support of its allegations both  in  the  prior  and  instant
     proceeding, the Commissioner is of the opinion and finds  that  the  owner
     fully intended to and in fact did  replace  all  of  the  windows  at  the
     subject premises; and that the window installation in this case cannot  be
     considered to be of a piecemeal nature.

     With respect to the owner's contention that its MCI application was timely 
     filed, Section 2522.4 (a) (8) of the Rent Stabilization Code requires that






          DOCKET NUMBER: FA 630315-RO
     an application for MCI increases  be  filed  within  two  years  from  the
     completion date of the installation.  In this case the completion date  of
     the window installation  was  July,1987,  the  date  the  remaining  seven
     windows were replaced.  Since, the instant application was filed  in  May,
     1989, the Commissioner is of  the  further  opinion  and  finds  that  the
     application was timely filed.

     Based on the record, including documentation submitted by the  owner,  the
     Commissioner  further  finds  that  the  owner  is  entitled  to  a   rent
     increase based upon a total approved cost for the  window  replacement  of
     $92,455.00, calculated as follows:

               -588 windows (595 total windows
                minus 7 windows paid for but not
                replaced by the original contractor)
                at $155.00 per window = $ 91,140.00

               -cost of 7 windows replaced by the
                second contractor: $1,315.00

               -total approved cost: $91,140.00 + 1,315.00
                = $92,455.00

     In view of the foregoing, the Commissioner deems it appropriate to  remand
     this proceeding to the Rent Administrator for such further  processing  as
     may be necessary to effectuate the determination herein  and  to  consider
     the effect of any tax abatement benefits which the owner may have received 
     for the work in question.

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

     ORDERED, that this petition be, and the same hereby is, granted  in  part;
     that the Rent Administrator's order be, and the same hereby  is,  revoked;
     and that the proceeding be, and the same hereby is remanded  to  the  Rent
     Administrator for further processing 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:                             










                                                                   
                                          JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner




                                                   
    

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