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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.: FI530232RO
945 ST. NICHOLAS REALTY CORP. RENT
ADMINISTRATOR'S DOCKET
NO.: DB530056B
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND MODIFYING RENT ADMINISTRATOR'S ORDER
On September 4, 1991 the above named petitioner-owner filed a
Petition for Administrative Review against an order of the Rent
Administrator issued July 31, 1991. The order concerned various
housing accommodations located at 945 St. Nicholas Ave., New York,
N.Y. The Administrator directed restoration of services and
ordered a rent reduction for failure to maintain required services.
The Commissioner has reviewed the record and carefully
considered that portion relevant to the issues raised by this
appeal.
This proceeding was commenced on July 10, 1989 when 21 tenants
joined in filing a Statement of Complaint of Decrease in Building-
Wide Services wherein they alleged, in sum, that the owner was not
maintaining certain required building services including the fact
that the owner had removed the central heat and hot water system
without the consent of the tenants.
The owner was served with a copy of the complaint and afforded
an opportunity to respond. The owner filed a response on January 8,
1990 and stated that several of the complaining tenants no longer
lived in the subject building, that it required more time to
investigate the complaint and that the records of prior DHCR
inspections would prove that it maintained services in the subject
building.
The Administrator ordered a physical inspection of the subject
apartment. The inspection was conducted on January 10, 1990 and
revealed that there was no boiler in the building, that the tenants
have their own heating system (electric) and that there was no
evidence of chipped and cracked stair treads throughout the public
areas or dirty public areas.
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On January 31, 1990 the Administrator sent the tenants a
request for information regarding the heat and hot water condition.
The tenants were asked when the change from owner supplied heat to
tenant provided heat took place, the type of heating system now in
use, whether the change resulted in increased costs to the tenants
and how long the tenants were in occupancy.
Various tenants filed responses to the Administrator's request
for information. The Administrator was informed that the boiler
had been removed in 1988, that electric baseboard heaters were now
in use and that the tenants had been made to incur increased costs
by the change. The Administrator was subsequently notified that
the tenants had instituted an action in Housing Court and that, on
January 14, 1991, Judge Klein issued an order directing the owner
to reinstall the central heating system in the building. The
court's order specifically found that the owner had violated the
NYC Housing Maintenance Code by removing the boiler.
On July 25, 1990 the Administrator sent the owner a request
for information. The owner was asked to submit any authorization
it had obtained from the Division to make the change from central
heating to the current situation. The owner's response, submitted
on August 22, 1990, was an application to modify services wherein
it stated that the old central heating system "had outlived its
usefulness" and was subject to frequent breakdowns and that it was
permitted, under the Multiple Dwelling Law, to make the change from
central heating to individual apartment heating.
A second inspection was conducted on June 13, 1991 and
revealed evidence of chipped and cracked stair treads throughout
the public areas and that the public areas were dirty.
The Administrator issued the order here under review on July
31, 1991. Rent stabilized tenants who joined the complaint were
granted a rent reduction equal to 25% of the maximum legal rent for
the removal of the central heat and hot water system.
Additionally, a reduction of an amount equal to the most recent
guideline adjustment for the lease's commencing before September 1,
1989 was ordered for the conditions relating to the stairs and
dirty public areas. Rent controlled tenants were granted a rent
reduction equal to 25% of the maximum legal rent for the removal of
the central heat and hot water system plus $12.00 for the other
conditions.
On appeal the owner states that it was acting within the law
when it removed the boiler and converted to individual apartment
heating, that a DHCR inspection conducted on December 11, 1989
revealed adequate heat and hot water, and that the DHCR inspection
in this proceeding conducted on January 10, 1990 did not reveal any
evidence of cracked or chipped stair treads or dirty public areas.
The petition was served on the tenants on October 25, 1991.
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The tenants filed responses and stated, in sum, that the owner
had not restored services and that, instead of being in compliance
with the law, the owner's removal of the boiler and change to
individual apartment heating was both a violation of the NYC
Housing Maintenance Code and Judge Klein's above described order.
After careful review of the evidence in the record, the
Commissioner is of the opinion that the petition should be granted
in part and the order here under review should be affirmed as
modified herein.
Pursuant to Section 2523.4 of the Rent Stabilization Code,
tenants may file a complaint alleging decreased services and the
Administrator is required to order a rent reduction to the level in
effect prior to the most guidelines adjustment where it is found
that the owner is not maintaining required services. Required
services are defined in Section 2520.6 (r) as that space and those
services provided or required to be provided on the applicable base
date including the furnishing of heat and hot and cold water.
Pursuant to Section 2202.16 of the Rent and Eviction
Regulations for New York City the Administrator may order a rent
reduction if it is found that the owner is not maintaining
essential services. The rent reduction should approximate the
decrease in rental value of the subject premises because of the
decreased services.
The owner had not filed for prior approval from the Division
for this modification of services which resulted in the transfer to
the tenants of the owner's obligation to provide heat and hot water
services with substantial increased costs to the tenants. The
Commissioner is of the opinion that, in these circumstances, the
undisputed removal of the boiler and installation of individual
electric baseboard heaters without prior approval and in violation
of a court order constitutes a failure to maintain required or
essential services for which a rent reduction is warranted. The
Commissioner finds, however, that the remedy for a failure to
maintain required services for rent stabilized tenants is,
according to Section 2523.4, a rent reduction to the level in
effect prior to the most recent guidelines adjustment. Accordingly,
the rent reduction of 25% of maximum legal rent reduction is
revoked in the order hereunder review and a rent reduction of an
amount equal to the percentage of the most recent guidelines
adjustments for the tenants' leases commencing before September 1,
1989 is ordered for the removal of the central heat and hot water
system. The tenants may file overcharge complaints with the
Division based on the additional costs they have incurred as a
result of the installation of individual heat and hot water
systems.
The findings regarding the stairs and dirty public areas are
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revoked. The Commissioner's review of the January 10, 1990
inspection report reveals that the inspector reported that the
stairs and public areas were being maintained indicating that these
conditions were addressed by the owner in response to the
complaint. It was improper to order a reinspection for these
conditions based on this report. The $12.00 per month rent
reduction ordered for rent controlled tenants is revoked.
In sum, the order here under review is modified with regard to
rent stabilized tenants to delete the findings regarding the stairs
and dirty public areas and is further modified to substitute the
rent reduction described above for the 25% of maximum legal rent
reduction ordered by the Administrator. With regard to rent
controlled tenants, the order here under review is modified to
delete the findings regarding the stairs and dirty public areas as
well as the $12.00 per month rent reduction ordered by the
Administrator. The finding and rent reduction ordered based on the
removal of the central heat and hot water system is affirmed.
With regard to rent stabilized tenants, the automatic stay of
the retroactive rent abatement for rent stabilized tenants, which
resulted from the issuance of the Administrator's order is vacated
upon issuance of this order and opinion. The owner may file for
rent restoration when services have been fully restored.
THEREFORE, pursuant to the Rent Stabilization Law and Code and
Rent and Eviction Regulations it is
ORDERED, that this petition be, and the same hereby is granted
in part, and that the Rent Administrator's order be, and the same
hereby is, affirmed as modified herein. Rent stabilized tenants
who owe arrears based on the Commissioner's decision herein may pay
off said arrears in twenty-four (24) equal monthly installments.
Rent controlled tenants who owe arrears may pay off said arrears in
installments of $12.00 per month. Any tenant who vacates their
apartment owes arrears immediately.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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