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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
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: GF130082RO
TRB-ESSEX HOUSE CORP. RENT
ADMINISTRATOR'S DOCKET
NO.: FK130024RK
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
REVOKING ADMINISTRATOR'S ORDER AND REINSTATING PRIOR RENT
RESTORATION ORDER
On June 12, 1992 the above named petitioner-owner filed a
Petition for Administrative Review against an order of the Rent
Administrator issued May 8, 1992 concerning various housing
accommodations located at 42-15 43rd Avenue, Sunnyside, N.Y.,
wherein the Administrator revoked a prior rent restoration order
for all rent stabilized tenants based on a finding that repairs had
not been completed and modified the order to exclude $10.00 from
the rent restoration for rent controlled tenants to reflect the
current amount for various cracked hallway window panes and loose
handles.
The Commissioner has reviewed the record and carefully
considered that portion relevant to the issues raised by this
appeal.
The record reveals that the on June 19, 1990 the owner filed
an Application for Rent Restoration (Docket No. EF130153OR) stating
that all services for which a rent reduction order had been issued
on July 27, 1987 (Docket No. AK130035B) had been restored. The
Commissioner notes that there was a prior rent restoration
application filed by the owner, which resulted in an order issued
on August 17, 1987 wherein the Administrator ordered that the rents
of rent controlled tenants of the building be restored by $8.00 per
month based on a finding that services had been partially restored
(Docket No CA130209OR). The August 17, 1987 order was issued
without prejudice to the owner's right to refile for rent
restoration of the remaining $12.00 per month for rent controlled
tenants as well as restoration of the rents of rent stabilized
tenants. The application bearing Docket No. EF130153OR is such a
refiling.
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The tenants were served with a copy of the application and
afforded an opportunity to respond. The tenants filed responses
both individually and collectively, wherein they stated that the
owner had not restored services and requested that the application
be denied.
The Administrator ordered a physical inspection of the subject
building. The inspection was conducted on November 2, 1990 and
revealed the following:
1. Cracked window pane on second floor left window on
right side of elevators in left wing of building,
2. Missing window handles on second and third floors
of right wing of building.
The inspector also reported that there was no evidence of water
damage to bulkhead walls throughout the building. Additional items
were described in the inspector's report but the only issues to be
resolved in this rent restoration proceeding concerned the
bulkheads, windows and window handles building-wide.
On November 29, 1990 the Administrator sent a notice to the
owner advising that the two conditions set forth above still
existed and affording 20 days to respond with evidence that these
specific conditions had been repaired.
On December 10, 1990 the Administrator received a response
from the building's new management company, stating that the
building was in receivership. The managing company asserted that
repairs to the second floor window pane and the missing second and
third floor handles had been completed. Annexed to this letter
were affidavits from the building superintendent and managing
agent. Both parties stated that the windows and window handles
described above were repaired.
The Administrator issued an order on January 15, 1991 and
granted full rent restoration to rent controlled and rent
stabilized tenants. The Administrator found that all services had
been restored, including the repair of windows in both wings of the
building.
On April 17, 1991 the tenant representative sent a letter to
the agency wherein she alleged that services had not, in fact, been
restored. She stated that the bulkhead, roof and chimney walls had
not been repaired, that the laundry room, halls, stairs and
terrazzo floors were dirty, that the sidewalks were cracked and
uneven and that the windows in both wings required repairs. She
also stated that she never received a copy of the Administrator's
order restoring rent. The representative requested reconsideration
of the rent restoration order.
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The Administrator sent a notice to the parties on November 21,
1991 and stated that the tenants had requested reopening of the
rent restoration proceeding based on the failure of the owner to
make the required repairs and the fact that the building was in
receivership. The parties were afforded the opportunity to submit
responses and evidence with regard to the proposed reopening.
The management company for the subject building filed a
response to the Administrator's notice on November 25, 1991 and
stated, in relevant part, that the windows and window handles had
been repaired as attested to in the affidavits previously filed
with the Administrator and described above. Copies of those
affidavits were again submitted to the Administrator.
The tenants filed a response to the Administrator's notice on
December 9, 1991 and stated, in relevant part, "We hereby attest
that no repairs on cited violations have been undertaken to
date..." Individual tenants filed responses to the notice, however
these responses were not relevant to the issue of the repair of the
windows and window handles.
The Administrator ordered a physical inspection of the subject
building. The inspection was conducted on January 30, 1992 and
revealed the following:
1. Fifth floor left window on right side of building
has one cracked pane,
2. Third floor right window handle on right side is
loose
3. Bulkhead ceiling on right side of building is
bubbled above roof door (minor),
4. Third floor left window pane on left side of
building cracked,
5. Bulkhead right side wall on left side of building
is bubbled.
The Administrator issued the order here under review on May 8,
1992. After describing the procedural history, the Administrator
set forth the results of the January 30, 1992 report of the DHCR
inspector. Based on this report, the Administrator concluded that
it was error to have granted rent restoration to rent stabilized
tenants as well as granting full rent restoration to rent
controlled tenants. Accordingly, the Administrator modified Order
No. EF130153OR to exclude all rent stabilized tenants from the
grant of rent restoration. With regard to rent controlled tenants,
the Administrator modified the prior order to the effect of
granting the owner a $2.00 per month rent restoration based on the
fact that the bulkhead areas were no longer water damaged. The
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rent restoration was made effective February 1, 1992. The
remaining $10.00 per month rent reduction for rent controlled
tenants was reinstated and the owner was given leave to refile for
rent restoration for this amount and for complete rent restoration
for rent stabilized tenants when the windows and window handles had
been repaired. The Administrator noted that this order applied to
the tenant representative, who had claimed that she never received
a copy of the original rent restoration order, as well as all other
tenants who had been granted the rent reduction
The petition for administrative review herein has been filed
by the new owner of the building, as represented by counsel. After
setting forth the lengthy procedural history from the time of the
tenants' initial complaint seeking rent reduction, the owner sets
forth two grounds for reversal of the Administrator's order and for
reinstatement of the original order granting complete rent
restoration for all rent regulated tenants. The arguments are:
1. The Administrator failed to follow established DHCR
procedures in reopening the proceeding and issuing
the order of modification. The owner contends that
this failure constitutes a denial of due process.
2. The determination of the Administrator is in
violation of the intent of the Rent Stabilization
Law.
In stating that the Administrator failed to follow established
DHCR procedures, the owner argues that the Administrator's decision
to reopen this matter was contrary to DHCR Policy Statement 90-2.
This policy statement was issued to clarify DHCR procedures with
regard to rent reductions for failure to maintain services as well
as applications to restore rent based on the restoration of
services. According to the owner this policy states that rents are
to be restored when the owner has demonstrated that it has
corrected the enumerated conditions set forth in the rent reduction
order in a workmanlike manner.
The owner argues that it had demonstrated that all enumerated
conditions were corrected, and therefore, the Administrator was
correct in granting the original order fully restoring all rents.
The owner states that the reply to the Administrator's November 29,
1990 notice settled the matter of whether the subject windows had
been repaired. Any findings made as a result of subsequent
inspections constitute "new issues". The owner states that
ordering the continuation of the instant rent reduction based on a
new issue is a violation of Policy Statement 90-2. The owner
points out that the inspection conducted after the proceeding had
been reopened found different windows to have defects than were
reported by the inspector fourteen months earlier investigating the
initial application for rent restoration. Furthermore, the owner
argues that the inspector's report was inconclusive and unrelated
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to the original complaint.
The petitioner's argument with regard to the Rent
Stabilization Code centers around Section 2520.3 thereof. Pursuant
to this section, policy implemented by the DHCR shall be done so
"with due regard for the preservation of regulated rental housing."
The owner states that the minor nature of the violations is far
outweighed by the financial burden of the rent reduction to this
financially troubled building which, the owner points out, has
recently been in and out of receivership. The petitioner states
that the Administrator's action in reinstating the rent reduction
is not in keeping with the letter and spirit of the Code section
set forth above.
The tenants filed a joint response on July 15, 1992 and
stated, in substance, that they desired the Commissioner to affirm
the Administrator's order issued after reopening. One tenant filed
an individual response on June 27, 1992 and stated that the owner
had made all required repairs.
After careful review of the evidence in the record, the
Commissioner is of the opinion that the petition should be granted,
the order here under review should be revoked and the order bearing
Docket No. EF130153OR should be reinstated.
The Commissioner has reviewed the records in the original rent
reduction proceeding, the rent restoration proceeding bearing
Docket No. EF130153OR as well as the record in this proceeding. It
is apparent from a review of all of these records that the owner is
correct in that the physical inspection conducted in the rent
reduction proceeding revealed that certain public area windows and
window handles were in need of repair. The owner filed for rent
restoration and a new inspection was conducted. This inspection
revealed that repairs to those specific windows and window handles
had not been made. The Administrator duly notified the owner of
the specific window panes and window handles in need of repair and
provided an opportunity to correct the condition and offer proof of
any repairs. The record is equally clear that the owner did, in
fact, provide proof in the form of affidavits that the cited
conditions had been repaired. The Administrator failed to order
another inspection to confirm the alleged repairs.
Based on the specific facts of this case the Commissioner
finds that The Administrator correctly issued the order bearing
Docket No. EF130153OR. It was error for the Administrator to issue
the order here under review based on a physical inspection which
revealed that public area windows and window handles different from
those previously reported broken and different from those the owner
was specifically notified to repair were now in need of repair.
The owner is therefore correct in asserting that the order bearing
Docket No. EF130153OR, which ordered complete rent restoration for
all rent regulated tenants, should be reinstated. The Commissioner
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orders that the order bearing Docket No. FK130024RK be revoked for
the reasons stated above and that the order bearing Docket No.
EF130153OR be reinstated. The rent restoration order is reinstated
as of the original date of issuance, January 15, 1991, and is
effective as of August 1, 1990 for rent stabilized tenants and as
of February 1, 1991 for rent controlled tenants.
THEREFORE, pursuant to the Rent Stabilization Law and Code and
Rent and Eviction Regulations for New York City it is
ORDERED, that this petition be, and the same hereby is,
granted, that the Rent Administrator's order be, and the same
hereby is, revoked, and that the Administrator's order bearing
Docket No. EF130153OR be, and the same hereby is, ordered
reinstated. Rent arrears owed as a result of this order may be
paid in twelve monthly installments for rent stabilized tenants and
in amounts of $10.00 for rent controlled tenants until all arrears
are repaid.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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