DHCR Decisions
Adm. Rev. Docket No.: FE630345RO
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 S.J.R. NO.: 5983
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: FE630345RO
:
ORIENTA SHORELINE ASSOCIATES, DRO DOCKET NOS:
EB930068-RP
PETITIONER : (WM86CS-178/254-OM)
------------------------------------X
TENANT REPRESENTATIVE:
JOSEPHINE SASSEN
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND MODIFYING THE ADMINISTRATOR'S ORDER
On May 23, 1991, the above-named owner filed a Petition for
Administrative Review (PAR) against an order issued on April 18,
1991, by the District Rent Administrator at 55 Church Street, White
Plains, New York, concerning the housing accommodations known as
various apartments at 490 Bleeker Avenue, Village of Mamaroneck,
New York, wherein the Administrator, upon remand, modified his
previous order by reducing the total costs upon which the subject
Major Capital Improvement (MCI) rent increase had been granted
(under Docket No. WM86CS-178/254-RP) by $54,038.00. In conjunction
with the filing of said PAR, the owner requested a stay as to the
appealed order. Said application was granted as to the retroactive
effect of the appealed order and denied as to the order's
prospective effect.
Thereupon, the owner sought judicial review of the partial denial
of its stay application in the Supreme Court for Westchester County
(Orienta Shoreline Associates v DHCR et al., Index No. 91-16849).
By his order of June 5, 1992, Justice Matthew F. Coppola granted
the owner a stay of the appealed order's prospective effect on the
condition that the owner post with the Clerk of the Court the sum
of $2,470.00 in the form of a surety bond, money or securities, or,
in the alternative, establish an interest-bearing escrow account
with its attorneys. Thereafter the matter was remitted to the
Division for the processing of the instant PAR.
Adm. Rev. Docket No.: FE630345RO
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 PAR.
The only remaining issues in this proceeding are whether the
Administrator properly reduced the sum of the costs upon which the
granted MCI rent increases had been calculated by $30,010.00,
representing monies expended for pointing and waterproofing (and
related work) to the garage and $14,028.00, representing monies the
tenants claimed had been expended for work on a new fitness center
and to relocate certain hobby shops in conjunction with the
creation of that center.
The Commissioner notes that the record indicates that the subject
condominium complex consists of two buildings: a freestanding,
separate garage and a single apartment building containing all of
the residential apartments, a fitness center, hobby shops and a
conference room.
In the appealed order, the Administrator stated, in substance, that
the work on the garage was disallowed as it did not inure to the
benefit of all of the tenants and that the sum of $14,028.00 of the
costs upon which the owner had based its application had been shown
to have been expended on work related to the creation of the
fitness center and the relocation of some of the hobby shops1 in
connection therewith; and that said work, by its nature, did not
constitute a proper basis for an MCI rent increase.
In its Petition the owner asserts, in substance, that the
Administrator erred. The owner argues that the subject garage is an
integral part of the subject complex; therefore, its proper
maintenance inures to the benefit of all tenants; and, in the
alternative, DHCR precedent requires that the cost of the work
should be allocated as an MCI increase to the rent of those tenants
who use the garage. The petitioner also argues that the
Administrator's determination as to the $14,028.00 disallowed was
based on documents that contained notations which did not appear on
the originals: which notations give the erroneous impression that
some of the work described in said invoices was performed in
conjunction with the creation of the fitness center and the
relocation of the hobby shops. The owner further alleges that the
$14,028.00 in question was expended for pointing and waterproofing
(and related work) performed on the residential building; and the
1 The record indicates that these hobby shops were small rooms
which are rented to the tenants and condominium owners for their
personal use (presumptively in connection with some individual
avocation) and were not rented for use in connection with the
business of carrying on a retail trade with the public at large.
Adm. Rev. Docket No.: FE630345RO
funds which were expended for the work on the fitness center and
the relocation of the hobby shops were never included in the costs
upon which the owner had based its MCI application.
In their answer opposing the PAR, the tenants, by their
representative assert, in substance, that the PAR was filed late;
that the $14,028.00 in question had been expended for the fitness
center work and to relocate certain hobby shops; that the garage
work did not inure to the benefit of all residents. The tenants
further allege that parking spaces are not readily available to all
tenants, as the waiting list contains condominium owners only; and
leaks and floods continue to occur in the garage due to the poor
quality of the work performed.
The Commissioner is of the opinion that the Petition should be
granted in part.
The Commissioner notes that the PAR herein was received by the
Division, through the mails, on May 24, 1991. The Commissioner
points out that a PAR is deemed filed when posted. As the PAR was
received on the 24th, the Commissioner infers that it was posted no
later than the 23rd and, therefore, finds that it was timely filed.
The Commissioner notes that the application herein showed that of
the 74 tenants in occupancy in April of 1986, only 7 utilized the
garage. The record also shows that, according to that application,
there are 77 apartments in the apartment building and 36 parking
spaces in the garage. The Commissioner also notes that the
registration information filed by the owner for 1990 and the record
herein, together, indicate that as of April 1990 there were thirty-
one tenants (ETPA and Rent Controlled combined) in this apartment
building and that in March of 1990, only 13 tenants had a parking
space in the garage.
The Commissioner finds that the work done on this separate, free-
standing garage, which contains a number of parking spaces equal to
less than half the number of apartments in the subject apartment
building, cannot be deemed to inure to the benefit of all of the
residents; and, therefore, cannot be deemed building-wide. The
Commissioner further finds that there is no established precedent
that warrants the imposition of a quasi-MCI rent increase on
tenants who may have utilized the garage at some time or another.
Either the work is building-wide (and, therefore, all other
requirements being met, may be deemed qualified for an MCI
increase) or it is not. Here, it is not. Therefore, as to the
$30,010.00 expended for work on the garage, the Petition should be
denied and the Administrator's order should be affirmed as the work
Adm. Rev. Docket No.: FE630345RO
paid for with that money does not qualify for an MCI increase,.
The Commissioner notes that by letter dated November 5, 1993, the
owner's attorneys were afforded the opportunity to submit
documentary proof of the Petitioner's compliance with the
conditions imposed by Justice Coppola on the granting of a stay of
the prospective effect of the appealed order. In a letter dated
November 10, 1993, the owner's attorneys replied, in substance,
that their files did not indicate that they had been served with a
copy of said order with notice of entry; that they would like the
Division to send them a copy of said order; and that they would
respond further upon receipt of a copy thereof.
The Commissioner notes that, inasmuch as it was the landlord which
sought the stay, it was plainly the landlord's obligation to follow
through on its application by obtaining a copy of the Court's order
of June 5, 1992 and by meeting the conditions set forth therein.
The Commissioner further notes that the order of June 5, 1992 was
prepared and submitted for signature by the owner's attorneys; that
said proposed order was submitted for settlement in response to the
Court's decision dated April 20, 1992; and that said order appears
to have been signed by Justice Coppola in the same form as it was
submitted by the landlord's attorneys. From these facts, the
Commissioner concludes that the landlord's attorneys were aware of
the conditions set by the Court for effecting the stay.
Consequently, based on the substance of the November 10, 1993 reply
from the landlord's attorneys, the Commissioner concludes that
those conditions have not been met. As the temporary stay, granted
by order to show cause dated September 30, 1991, was in effect only
until the hearing of the Article 78 Petition, the Commissioner
concludes that there is no stay against the effectiveness or
enforcement of the Division's orders in this proceeding.
Consequently, the Commissioner directs that, upon the expiration of
sixty (60) days following the issuance of this Order and Opinion,
the owner shall refund to each of the affected tenants that portion
of the rents collected which had been imposed by virtue of the
putative MCI increase generated by the aforesaid $30,010.00, along
with that portion of any subsequent guidelines increases calculated
thereon; and with interest (at the rate payable on a judgment
pursuant to Section 5004 of the Civil Practice Law and Rules) from
April 18, 1991, forward, on the balance of all such rents
collected.
As to the $14,028.00 in question, the Commissioner finds that the
owner had submitted a contract for the subject allowable MCI work
and proof of payment of the cost for that work. The Commissioner
finds that the work orders relied on by the Administrator appear to
have been altered as alleged in the Petition. Therefore, the
Commissioner finds that they are not reliable evidence of what the
funds in question were expended for. Upon putting aside said work
orders, the Commissioner finds that there is no substantiation for
Adm. Rev. Docket No.: FE630345RO
the tenants' assertion that the owner had spent this $14,028.00 for
work that was not included in the contract and which does not
qualify for an MCI. That being the case, the Commissioner finds
that the Administrator erred in disallowing these costs.
THEREFORE , in accordance with the provisions of all of the
applicable laws and regulations, it is
ORDERED, that this Petition be, and the same hereby is granted in
part and that the appealed order be, and the same hereby is,
modified to conform with the findings in this Order and Opinion;
and that, as so modified, said order be, and the same hereby is,
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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