Docket No. FK830467RT
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
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. FK830467RT
ESTELLE SEMEL AND SEVERAL TENANTS
RESIDING AT 4 NASSAU ROAD, 16 NASSAU
ROAD, 65 SHOREVIEW DRIVE, 82 SHOREVIEW DISTRICT RENT
DRIVE, 91 SHOREVIEW DRIVE, 93 ADMINISTRATOR'S DOCKET
SHOREVIEW DRIVE, 112 SHOREVIEW DRIVE, NO. DK810016OM
90 CRISFIELD STREET, 92 CRISFIELD
STREET, 96 CRISFIELD STREET, 98
CRISFIELD STREET, 118 CRISFIELD
STREET, 1 ANDOVER ROAD, 93 BEAUMONT
CIRCLE, 95 BEAUMONT CIRCLE, 105
BEAUMONT CIRCLE, 113 BEAUMONT CIRCLE,
YONKERS, NEW YORK,
PETITIONERS
------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN
PART
The above-named tenants filed a petition for administrative
review on November 8, 1991, of an order issued on October 10, 1991
by a Rent Administrator concerning various housing accommodations
in the premises known as 31 Nassau Road, Yonkers, New York and the
above-listed premises.
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 the petition for review.
The owner commenced this proceeding on December 4, 1989 by
filing an application for a rent increase based on a major capital
improvement (M.C.I.), for the installation of a roof (at a cost of
$401,760.00); installation of gutters and leaders (at a cost of
$87,899.00), and the installation of window sills (at a cost of
$141,265.00), at a total cost of $630,924.00.
On October 10, 1991, the Rent Administrator issued the order
under review herein, finding that the installations qualified as a
M.C.I., and allowing rent increases for the subject apartments in
the amount of $5.04 per room, per month.
Docket No. FK830467RT
In their petition the tenants assert, among other things, that:
1. The cost of the installations were excessive;
2. They had not received new window sills;
3. The owner's application for the M.C.I. rent increase did
not contain "invoices to back up" the cancelled checks;
4. The owner's application for the M.C.I. rent increase
contained only twenty-three checks in the total amount of
$451,237.40;
5. Installation of window sills do not qualify as an M.C.I.,
and
6. The M.C.I. rent increase should be denied because some of
the items which qualify for an M.C.I. are defective.
In its answer to the tenants' petition the owner asserts, among
other things, that the work on the window sills consisted of
"resetting, pointing and where necessary replacement"; that the
work on the window sills will extend the useful life of the
structure; that prior orders of the rent agency have held that the
aforementioned work on the window sills qualified as an M.C.I.;
that there is no requirement that every sill be replaced; that the
tenants do not assert any legal basis for questioning the costs of
the M.C.I.; that the owner complied with all regulatory
requirements in proving its costs for the M.C.I.; that the subject
owner has submitted copies of all checks "representing the contract
price" of the major capital improvements, and that the owner is
investigating any defects that are being alleged by the tenants.
After careful consideration, the commissioner is of the opinion
that this petition should be granted in part.
As to the tenants' assertion that the cost of the installations
were excessive, the Commissioner finds that the fact that the owner
might have been able to have the work done more cheaply does not
bar the owner from receiving a M.C.I. rent increase in this
proceeding.
The Commissioner notes that in addition to submitting to the
rent agency an application for a rent increase based on an M.C.I.,
the subject owner also submitted a form promulgated by the rent
agency entitled "Supplement to Owner's Application for Rent
Increase." The form contained a section entitled "Pointing and
Waterproofing," which directed the owner, if applicable, to respond
to the following:
1) How many sides of the building are exposed and to identify
the sides;
Docket No. FK830467RT
2) Submit a diagram of the building indicating areas where
waterproofing and pointing was performed, and
3) Submit a statement from the contractor advising whether all
exposed sides of the building were examined prior to the
work performed, and that based upon such examination the
sections waterproofed and pointed were all areas where it
was required.
The record reflects, and the owner asserts, that the work on
the window sills consisted of "resetting, pointing, and where
necessary replacement."
The Commissioner points out that the rent agency's present
policy is that in order to qualify for an M.C.I. rent increase for
pointing, pointing must be done wherever necessary, and the owner's
assertion of where it was necessary must be adequately proven.
The Commissioner finds that the subject owner did not respond
to the directives of the aforementioned form pertaining to pointing
and waterproofing, and that the subject owner did not establish
that the pointing of the window sills were necessary.
Accordingly, the Commissioner finds that the subject owner has
not complied with the above-mentioned requirements to qualify for
an M.C.I. rent increase for the pointing of the window sills.
As the owner also asserts that the window sills were replaced
where necessary, and that various tenants assert that they did not
receive new window sills, the Commissioner finds that the work on
the window sills was not a building-wide improvement, and that the
work on the window sills constituted ordinary repair and
maintenance.
For work to qualify as a major capital improvement, it most
satisfy various criteria. Not only must it be depreciable in
nature but the installation must be required for the continued
operation, preservation, and maintenance of the structure, other
than ordinary repairs and maintenance. The installation must be
one which is essentially structural in nature and materially add to
the value of the property and appreciably prolong the life thereof.
As it has been determined that the work on the window sills
constituted ordinary repair and maintenance, the Commissioner finds
that such work does not qualify as an M.C.I.
Accordingly, the Commissioner finds that the Administrator's
order is to be modified to reflect the fact that the work on the
window sills do not qualify as an M.C.I.
The Commissioner finds that the prior rent agency's orders
cited by the subject owner in support of its contention that work
Docket No. FK830467RT
on the window sills qualify for an M.C.I. are not applicable to
this proceeding, as those orders mostly pertain to either window
replacement or the installation of a new roof. The Commissioner
notes that in the one order cited by the owner that actually was
related to work on window sills, the Commissioner in that
proceeding determined that the work on the window sills qualified
as an M.C.I. in conjunction with window replacements. The
Commissioner further notes that in this proceeding the subject
owner did not apply for an M.C.I. rent increase for window
replacements.
As to the work done on the building's roof, gutters and
leaders, the Commissioner finds that the Administrator's
determination that these items qualified as an M.C.I. was proper
and should not be disturbed.
The record reflects that the subject owner submitted thirty-two
cancelled checks to the Administrator to substantiate the cost of
the work that was done as alleged in the application for the M.C.I.
rent increase. The record further reflects that the total amount
of these cancelled checks equal to $630,924.00, which is the amount
the subject owner cited in its application as the total cost of the
work done.
The Commissioner finds that the dates of the above-mentioned
cancelled checks which were submitted to the Administrator were
contemporaneous with the commencement and completion dates of the
work on the subject building.
The Commissioner notes that Policy Statement 90-10 states as
follows:
Any claimed MCI or individual apartment improvement cost
must be supported by adequate documentation which should
include at least one of the following:
1) Cancelled check(s) contemporaneous with the completion of
the work;
2) Invoice receipt marked paid in full contemporaneous with
the completion of the work;
3) Signed contract agreement, and
4) Contractor's affidavit indicating that the installation was
completed and paid in full.
Pursuant to Policy Statement 90-10, the Commissioner finds that
the owner's submission of the aforementioned cancelled checks to
the Administrator was adequate documentation to substantiate the
cost of the work cited in the owner's application.
Docket No. FK830467RT
As to the tenants' assertion that the owner's application did
not include invoices, the Commissioner finds that invoices are not
necessary as evidence that an item was paid for where, as in this
proceeding, cancelled checks showing the cost of the items were
submitted. Accordingly, the Commissioner finds that the items in
the owner's application pertaining to the work on the roof, gutters
and leaders, were sufficient to warrant a M.C.I. rent increase.
As the cost of the work on the building's window sills are
being disallowed in the computation of the M.C.I. rent increase,
the Commissioner finds that the Administrator's order is further
modified to reflect the change in the M.C.I. rent increase, and is
computed as follows: $489,659.00(allowable cost-cost of window
sills) divided by 60, divided by 2,087(number of rooms) =$3.91 per
room, per month.
Accordingly, the Commissioner finds that the subject owner is
entitled to an M.C.I. rent increase in the amount of $3.91 per
room, per month, effective upon the expiration of the lease that
was in effect on October 9, 1991 (the issuance date of the
Administrator's order), unless there was an authorized provision in
the lease, in effect on October 9, 1991, to permit an M.C.I rent
increase during its term, and providing that the work constituting
major capital improvements were commenced prior to the commencement
of the above-mentioned lease, in which case the M.C.I. rent
increase becomes effective on the first rent payment date following
the issuance of the Administrator's order.
The Commissioner further finds that the remainder of the terms
and conditions of the M.C.I. rent increase as cited in the
Administrator's order shall remain in effect.
The Commissioner notes that this order is without prejudice to
the tenants' right to file a complaint of a diminution in services
due to alleged defects in any of the aforementioned items which
qualified as an M.C.I. in this proceeding.
THEREFORE, in accordance with the provisions of the Emergency
Tenant Protection Act of 1974 and the State Tenant Protection
Regulations, it is
ORDERED, that this petition be, and the same hereby is, granted
in part, and that the order of the Rent Administrator be, and the
same hereby is, modified, in accordance with this order and
opinion, and it is
FURTHER ORDERED, that the owner shall repay to the tenants any
excess rent arising as a result of this order within thirty days
from the date of issuance hereof.
ISSUED:
Docket No. FK830467RT
Joseph A. D'Agosta
Deputy Commissioner
|