OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

      ------------------------------------X  S.J.R. NO.: 7021
      APPEAL OF                              DOCKET NO.: FD430069RO
          HERMAN KAHAN,                      RENT ADMINISTRATOR'S
                                             DOCKET NO.: DE430158OM
                            PETITIONER    : 


      The above-named petitioner-owner timely filed a petition for Administrative 
      Review against an order issued on March 5, 1991 by the Rent Administrator 
      (Gertz Plaza) concerning the housing accommodations known as 153-155 Essex 
      Street, New York, New York, various apartments, wherein the Administrator 
      denied the owner's application for major capital improvement (MCI) rent 
      increases at the subject sixteen family dwelling.

      Subsequent thereto, the petitioner filed a petition in the Supreme Court 
      pursuant to Article 78 of the Civil Practice Law and Rules requesting that 
      the "deemed denial" of its Administrative Appeal be annulled.  

      Pursuant to a stipulation of settlement, so ordered by the Court, which was 
      entered into by the petitioner and the Division on July 23, 1993, the 
      proceeding was remitted to the Division for an expeditious determination of 
      this administrative appeal.
      The owner commenced this proceeding on May 22, 1989 by initially filing an 
      application for an MCI rent increase predicated on the installation of a 
      boiler/burner at a total claimed cost of $56,000.00.  Said application was 
      denied on the grounds that a requisite certificate of electrical inspection 
      had not been submitted.

      In this petition for Administrative Review, the owner requests reversal of 
      the Administrator's order and contends, in substance, that the decision to 
      deny the MCI application was arbitrary since at the time the application 
      was filed in 1989, the Division never requested the Electrical certificate; 
      that sufficient time was not given to secure said electrical certificate 
      when the Division finally requested such; and that the owner should not be 
      faulted or penalized for this Administrative delay.  Submitted with the 
      petition, is a copy of the permit to perform electrical work at the subject 
      premises, issued on February 2, 1991.

      After a careful consideration of the entire evidence of record, the 
      Commissioner is of the opinion that this petition should be granted, in 

      The record discloses that with the exception  of a certificate of 
      electrical inspection all necessary governmental approvals and sign-offs 
      plus supporting documentation, (contract, contractor's certification and 
      cancelled checks) had been submitted during the course of the proceeding, 
      for the boiler/burner installation.  In addition, tenants who were served 


          ADMIN. REVIEW DOCKET NO.: FD430069RO

      with notice of the application do not take issue with the quality or 
      effectiveness of said new heating system which satisfies the requirements 
      of a major capital improvement.

      The record further discloses that on June 7, 1993, the owner submitted a 
      duplicate copy of the requisite certificate of electrical inspection, the 
      original of which was issued on May 31, 1991; and that no rent reduction 
      order based on the owner's failure to maintain services of a building-wide 
      nature was outstanding nor have any heat/hot water complaints been filed by 
      the tenants either prior to or subsequent to the issuance of the order 
      appeased herein.

      In view of the fact that the owner has completed the application by virtue 
      of submitting the missing certificate of electrical inspection from the 
      Bureau of Electrical Control and taking into consideration the size of the 
      subject premises and all factors bearing on the equities of this particular 
      matter, the Commissioner is of the opinion and finds that the owner is 
      entitled to a rent increase adjustment of $14.18 per room, per month 
      computed as follows: claimed costs $56,000.00 less commercial tenant's 
      share $15,176.00 = $40,824.00 - 60 months = $680.40 - 48 rooms = $14.18.  
      Said increase is effective for rent stabilized apartments as of August 1, 
      1993, the first rent payment date 30 days after the owner completed the 
      instant application by virtue of the submission to the Division of the 
      requisite certificate of electrical inspection and subject to the statutory 
      limitation of collectibility of 6% (of the April 1989 rent roll).

      In the event that any tenant took occupancy pursuant to a vacancy lease 
      commencing after the owner had filed its application, the Administrator 
      notes that for the MCI increase granted by the order to be collectible 
      during the term of such tenant's vacancy lease, such vacancy lease would 
      have to contain a specific clause advising the tenant of the docket number 
      of the pending proceeding and advising that the rent charged was subject to 
      additional increase as provided by Section 2522.4(a) 5 of the Rent 
      Stabilization Code and established Division precedent.  In the absence of 
      same, said increase will not be collectible until the expiration of the 
      lease term in effect at the time of issuance of the Commissioner's order, 
      provided the renewal lease contains a general authorization provision for 
      adjustment of the rent reserved by DHCR order.

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

      ORDERED, that this petition be, and the same hereby is granted in part; 
      that the order of the Rent Administrator be, and the same hereby is 
      revoked; and that the Rent of the rent stabilized apartments be, and the 
      same hereby is increased as hereinabove provided subject to the limitations 
      on collectibility set forth herein.


                                           JOSEPH A. D'AGOSTA
                                           Deputy Commissioner


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