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 ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET Nos.: FK410442RT,
APPEALS OF FK410443RT, FK410462RT,
VARIOUS TENANTS OF FK410466RT, GB410138RT,
300 EAST 51ST STREET GC410408RT
NEW YORK, NEW YORK
RENT ADMINISTRATOR'S
DOCKET Nos.: EK430048RP,
FK430036RK
PETITIONERS
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ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
The above named petitioner-tenants timely filed or re-filed
petitions for administrative review (PARs) against the remand and
reconsideration orders issued subsequent to the initial order
issued on November 1, 1988 under, Docket No. BE430153OM, by a Rent
Administrator (Gertz Plaza) concerning the housing accommodations
known as 300 East 51st Street, New York, NY, various apartments,
wherein the Administrator initially denied the application upon a
finding that the owner failed to submit required information in a
timely manner.
Pursuant to a Court order derived via an Article 78 proceeding, the
DHCR was ordered to make a determination on the case within a
certain time period (SJR 5133). The Commissioner remanded the
proceeding to the Rent Administrator because the owner established
on appeal under Docket No. CL430014RO that he had submitted a
timely response to the Administrator's request for further
information which was not considered below. During the interim, a
second Article 78 proceeding was initiated by the owner to compel
the DHCR to make a final determination. The Court ordered that the
owner be granted the increase for the MCI installations which were
not in dispute promptly while allowing ninety (90) additional days
to determine whether or not the items in dispute were eligible to
be included in the increase (SJR 5583).
ADMIN. REVIEW DOCKET NO. FK-410442-RT
On October 22, 1991, the Rent Administrator issued an order under
Docket No. EK430048RP granting the owner an increase for 410
apartment windows and 16 sliding glass doors pursuant to the Court
Order. DHCR sought to reargue its position with respect to that
portion of the Court's order which granted the MCI for sliding
glass doors. The Court denied DHCR's motion to reargue. However,
DHCR had already issued a reconsideration order under Docket No.
FK430036RK which revoked the collection of any rent increases
associated with the sliding glass doors. The Appellate Division
modified the prior decision to the extent of allowing the owner
thirty (30) days to file a PAR concerning the sliding glass doors
and directing DHCR to make a final determination within thirty (30)
days after submission of said PAR. Finally, DHCR issued an order
granting the owner's petition for the approval of that portion of
the MCI related to sliding glass doors thereby reinstating the
order issued under Docket No. EK430048RP and revoking the order
issued under FK430036RK.
The Commissioner deems it appropriate to consolidate these
petitions for disposition since they pertain to the same orders and
involve common issues of law and fact.
The Commissioner has reviewed all of the evidence in the record and
has carefully considered that portion of the record relevant to the
issues raised by these administrative appeals.
The owner commenced this proceeding on May 7, 1987, by initially
filing an application for a rent increase based on the installation
of new prime windows and sliding glass doors at a total cost of
$200,000.00.
Several tenants objected to the owner's application alleging, in
substance, that the newly installed windows were dysfunctional;
that the installation should not qualify as an MCI because all the
windows in the building were not replaced; that extensive repairs
were done to the windows in one of the apartments which should have
exempted the tenant from the window replacement and any subsequent
rent increase arising therefrom (12B); that the owner is failing to
maintain services; that the building's elevator is dysfunctional;
and that since the tenants were not afforded the opportunity to
respond in court to the Article 78 proceeding, due process has been
denied which should nullify the court proceedings.
A physical inspection of the subject premises occurred on July 1
and 2, 1991, wherein the inspector noted that all the windows
complained about were functioning satisfactorily.
The owner responded by submitting statements regarding the
completion of necessary repairs and/or the restoration of services.
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ADMIN. REVIEW DOCKET NO. FK-410442-RT
The orders here under review granted the owner's application, in
part, and authorized rent increases for rent stabilized tenants.
In these petitions, the tenants essentially make the same
allegations as raised below. The tenants additionally question the
owner's ability to change the bank account for the tenants'
security deposits to another account which yields a lower
percentage of interest; and whether the owner has the legal right
to charge tenants for servicing "lock outs."
The owner addressed each petitioner by affirming that he has
proceeded through this action according to the legal specifications
of the DHCR and that any further challenge may be decided upon
judicial review.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that these petitions should be
denied.
Rent increases for major capital improvements are authorized by
Section 2522.4 of the Rent Stabilization Code 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 replacement of windows in
excess of 25 years is considered to be an MCI.
The evidence of record in the instant case indicates that all
complaints regarding the installation herein were addressed
appropriately in the proceeding below; and that although all of the
windows in the building may not have been replaced, there are
limited circumstances where the replacement of all windows would be
unnecessary and unwarranted. The Commissioner has adopted the
position where an owner has earlier installed new windows, the
condition of which are such that their replacement is not required
or due to the special characteristics of certain other windows
which are clearly of a distinct and different nature such as public
area or lot line windows, that the subsequent replacement of all
other apartment windows totalling at a minimum at least 80% of the
total number of apartment windows in the building as part of a
unified plan and consecutively timed project completed within a
reasonable time frame would substantially comply with the
requirement of a major capital improvement. Work of a piece-meal
nature or ordinary repairs does not constitute a major capital
improvement. Thus, the owner may determine that certain windows do
not need replacement in accordance with the above noted exceptions
as long as it is in compliance with the 80% rule.
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ADMIN. REVIEW DOCKET NO. FK-410442-RT
Failing to maintain services is best evidenced by the existence of
building-wide rent reduction orders and/or individual apartment
services complaints prior to the issuance of the order herein or
pending at the time of the application. In the instant case, the
record indicates that although a building-wide rent reduction order
(TC083837B) was issued with particular emphasis on one (1)
apartment (12B), the owner was subsequently granted a rent
restoration based upon a finding that the conditions or violations
upon which the rent reduction order was based had been corrected
and warranted a restoration of the rent effective September 1,
1987, under Docket No. BF410125OR. Since the building-wide issue
was resolved prior to the issuance of the final order herein, it
shall not be deemed as an impediment to the approval of the owner's
application. It is further noted that the main condition resulting
in the rent building-wide reduction was not related to the MCIs
herein nor did it impose any immediately hazardous conditions upon
the tenants.
In conclusion, the Commissioner notes that the manner in which the
owner conducts his affairs with respect to escrow accounts or
superintendent service fees are not issues relevant to the instant
proceeding; and that, if the facts so warrant, a building-wide rent
reduction order may result from the filing of a service complaint
involving elevator dysfunction.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
and the New York City Rent and Eviction Regulations, it is
ORDERED, that these petitions be, and the same hereby are, denied;
and that the Administrator's order be, and the same hereby is,
affirmed.
ISSUED:
____________________
Joseph A. D'Agosta
Deputy Commissioner
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