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
          1A2D3D5FE630345.RO3    






    

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