` 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 ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET NO.: FK410433RT
APPEAL OF
JAMES W. HIPKISS
RENT ADMINISTRATOR'S
PETITIONER DOCKET NO.: CF430178OM
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On November 15, 1991 the above-named petitioner-tenant timely filed
a Petition for Administrative Review (PAR) against an order issued
on November 1, 1991 by the Rent Administrator (Gertz Plaza)
concerning the housing accommodation known as 129 Perry Street,
Apartment 2D, New York, NY, wherein the Rent Administrator
determined that the owner was entitled to a rent increase based on
a major capital improvement (MCI).
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 this proceeding on June 24, 1988 by initially
filing an application for a major capital improvement rent increase
predicated on the installation of a new boiler and the removal and
disposal of existing boiler asbestos, at the subject premises, at
a total claimed cost of $21,700.00. In support of his application,
the owner submitted copies of contracts, permits and cancelled
checks.
In answer to the owner's application, several tenants responded
objecting to the rent increase. They contended, in substance, that
there has been no substantial rehabilitation nor any major capital
improvements done to the building; that the replacement of the
boiler falls under ordinary repairs and maintenance and should,
therefore, be considered exempt from consideration; that the old
boiler had constantly malfunctioned in the past and that tenants
had made numerous complaints to the Division; that, as a result of
these complaints, inspectors from the Division had placed several
violations against the building; that the hot water is not as hot
ADMIN. REVIEW DOCKET NO.: FK410433RT
as is legally mandated; that, according to Con Edison, the
inadequate supply of hot water was as a result of the faulty
installation of the boiler which was done by plumbers hired by the
owner; and that the landlord should be made to reimburse the
tenants for not providing adequate hot water instead of being
granted an outrageous and unfair rent increase.
On November 1, 1991 the Rent Administrator issued the order here
under review finding that the installation of the new boiler and
the removal and disposal of existing asbestos qualified as major
capital improvements, determining that the application complied
with the relevant laws and regulations based upon the supporting
documentation submitted by the owner and allowing rent increases
for both rent controlled and rent stabilized apartments based upon
an approved cost of $21,700.00.
In his petition for administrative review, the tenant contends, in
substance, that he should not be obligated to pay a rent increase
since the order issued by the Rent Administrator states that a
vacancy lease must state a pending MCI and list the items for which
a major capital improvement rent increase is sought; and that his
vacancy lease does not state anything about a pending MCI. He also
submitted a copy of said lease to substantiate his claim.
In answer to the tenant's petition the owner contends, in
substance, that the tenant is correct in stating that the MCI
information was not set forth in the tenant's April 10, 1990
vacancy lease; that the requirement to set forth the pending MCI
information only applies to the April 10, 1990 vacancy lease and
not to the May 1, 1991 renewal lease; that the tenant agreed,
pursuant to the renewal lease, to pay for any MCI increases granted
during the term of the lease; that the tenant has not been billed
and is not obligated to pay the retroactive rent increase granted
by the order; and that the tenant is obligated to pay the increase
from the December 1, 1991 collection date set forth in the
Administrator's order.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that this petition should be denied.
Rent increases for major capital improvements are authorized by
Section 2522.4 of the Rent Stabilization Code. Under rent
stabilization, the improvement must generally be building-wide;
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depreciable under the Internal Revenue Code, other than for
ordinary repairs; be required for the operation, preservation, and
maintenance of the structure; and replace an item whose useful life
has expired.
The Commissioner notes that the replacement of a boiler and the
removal and disposal of existing boiler asbestos qualify as major
capital improvements for which an increase may be warranted. The
record indicates that the owner substantiated his application by
submitting copies of the contract, permits and cancelled checks.
The record confirms that the owner correctly complied with the
applicable procedures for a major capital improvement rent
increase. The Commissioner further notes that on appeal, the
tenant does not allege any errors on which the Rent Administrator's
order was based, but rather asserts that the collectibility of the
increase as to the subject apartment is affected by the specific
terms or omissions in his vacancy lease.
The Commissioner notes that where the tenant took occupancy of the
apartment pursuant to a vacancy lease commencing after the owner
had filed its application, as is the case in the instant
proceeding, for the MCI increase granted by the Administrator's
order to be collectible during the term of the tenant's vacancy
lease, such vacancy lease would have to contain a specific clause
advising the tenant of the pending proceeding and advising that the
rent charged was subject to an additional increase (during the
current lease term in effect) as provided by Section 2522.5 (d) (2)
of the Rent Stabilization Code and established Division precedent.
In the absence of same, and in accordance with Section 2522.4 (a)
(5), said increase is not collectible until the expiration of the
lease term in effect at the time of issuance of
the MCI order, providing the renewal lease contains a general
authorization provision for adjustment of the rent reserved by the
DHCR order.
This order and opinion is issued without prejudice to the tenant's
right to file a rent overcharge complaint if the owner has
collected any rent increase authorized by the Rent Administrator's
order for any period prior to the expiration of the lease term in
effect at the time the Administrator's order was issued.
THEREFORE, in accordance with the applicable provisions of the Rent
Stabilization Law and Code, it is
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ADMIN. REVIEW DOCKET NO.: FK410433RT
ORDERED, that this administrative appeal be, and the same hereby is
denied, and the Administrator's order be, and the same hereby is
affirmed.
ISSUED:
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JOSEPH A. D'AGOSTA
Deputy Commissioner
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