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
|
