STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
SJR NO: 6872
------------------------------------X ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET NO.: GE410026RO
c/o Kucker, Kraus & Bruh
PETITIONER DOCKET NO: FE430025RP
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
The above-named petitioner-owner timely filed an Administrative
Appeal against an order issued on March 31, 1992 under Docket No.
FE430025RP by the Rent Administrator (Gertz Plaza) concerning the
housing accommodations known as 279 East 44th Street, New York, New
York, various apartments.
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 his administrative appeal be
annulled. On April 19, 1993, an order was signed by Justice Sklar
remitting the proceeding to the Division for an expeditious
determination of the owner's administrative appeal.
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 this administrative appeal.
The owner commenced the proceeding below on January 7, 1988 by
initially filing an application for a major capital improvement
(MCI) rent increase, predicated on the installation of new windows.
Said application was denied by the Rent Administrator on October
17, 1990 under Docket No. CA430033OM on the basis that building-
wide service reduction order No. ZBK410058-B was still in effect
and the owner failed to file either a restoration or Administrative
Review application against said building-wide order.
On November 20, 1990, the owner filed an administrative appeal
against the order issued by the Administrator under Docket No.
CA430033OM. The Commissioner's order and opinion determined said
Administrative Appeal (Docket No. EK430192RO) and remanded the
proceeding to the Administrator to conduct further fact finding,
Adm. Rev. Docket No. GE410026RO
including an inspection, if deemed necessary, to determine whether
all required services in the building are being maintained and if
found to be maintained, to continue processing the owner's MCI
On March 31, 1992, the Rent Administrator issued the order here
under review denying the owner's application based on findings that
building-wide service reduction order No. BK410058B is still in
effect and there are no owner restoration or administrative review
applications against said building-wide order; and that a
subsequent building-wide service reduction order No. CL430077B is
still in effect since both the owner's request for rent restoration
(Docket No. ZFG410040OR) and Petition for Administrative Review
(Docket No. DI410007RO) were denied.
In this Petition for Administrative Review, the owner requests
revocation of the Administrator's order and contends, in substance,
that the Administrator erroneously denied the MCI application on
the basis that no owner restoration or Administrative Review
Petition was filed against building-wide service reduction order
No. BK410058B; that such building-wide order did not impose a rent
reduction and as such, pursuant to DHCR Policy Statement 90-8, does
not act to bar the petitioners' application; that in the subject
order, which is the result of the remand proceeding, the Administra
-tor again misinterprets the provisions of Policy Statement 90-8 by
holding that the existence of DHCR order CL430077B somehow acts to
bar the successful processing of the MCI application; that pursuant
to Policy Statement 90-8, the effect of a building-wide service
reduction on an MCI application is that an order of denial will be
issued only where the rent reduction order was in effect at the
time of filing of the MCI application; that neither order NO.
CL430077B, nor any other building-wide rent reduction order, was in
effect on the date of filing of the MCI application; and that if
the owner's application had been processed in a timely fashion, the
requested rent increase would have been in effect well prior to the
issuance date of the cited reduction order.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that this Administrative Appeal
should be denied.
Regarding the owner's contention that the Administrator erroneously
denied the MCI application since building-wide service reduction
order No. BK410058B did not impose a rent reduction, it is the
policy of the Division as reflected in Policy Statement 90-8 that
"where there is a DHCR order in effect determining a failure to
maintain a building-wide service which resulted in a rent
Adm. Rev. Docket No. GE410026RO
reduction, such order will constitute a bar to obtaining an MCI
rent increase". The record confirms the owner's assertion that the
order issued under Docket No. BK410058B merely directed a
restoration of services but did not provide the sanction of a rent
reduction and thus the owner was not required to take any further
action before the Division. Under such circumstances and in
accordance with current Policy Statement 90-8, the Commissioner is
of the opinion that said order in of itself should not have acted
as a bar to the owner's application.
Nevertheless the record discloses that a subsequent rent reduction
order, based on the owner's failure to provide services of a
building-wide nature, was in effect during the course of the
proceedings before the Rent Administrator. As a consequence thereof
the Administrator appropriately denied the instant application.
With respect to the owner's contention that the subsequent
building-wide rent reduction order was not in effect at the time
the application was filed and thus should not have resulted in the
denial of the application, the Commissioner notes that the owner
has completely misconstrued the intent of the Rent Laws, Code, and
Regulations and Policy Statement 90-8. Such laws clearly provide
that an owner who has applied for an MCI rent increase shall not
have said application granted if there is a finding that a rent
reduction is warranted based on a determination by the Division
that the owner is not providing required services of a building-
wide nature. To accept the owner's argument would lead to the
illogical and incongruous situation where an application is filed
on one day followed the next day by a determination that the owner
is not maintaining services, irrespective of degree or severity.
Neither Policy Statement 90-8 nor the Laws and Regulations are
intended to reward an owner with a rent increase in such
In addition, the record discloses that contrary to the owner's
certification to the maintenance of essential services and the
continued maintenance of such services, a third inspection
conducted by the Division on January 3, 1992 revealed that all
required services are still not being maintained. Said inspection
conducted on January 3, 1992 resulted in the denial of the owners
rent restoration application under Docket No. FG410040OR, which
order is not now subject to review or collateral attack.
Accordingly, the Commissioner finds that the Administrator properly
denied the owner's application for MCI rent increase on remand.
Adm. Rev. Docket No. GE410026RO
THEREFORE, in accordance with the Rent Stabilization Law and Code,
and the Rent and Eviction Regulations, it is
ORDERED, that this petition be, and the same hereby is denied; and
that the Rent Administrator's order be, and the same hereby is
JOSEPH A. D'AGOSTA