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 NOS.: FL610054RT
APPEALS OF FL610055RT
FL610096RT
FL610097RT
VARIOUS TENANTS FL610098RT
GA610411RT
GB610452RT
RENT ADMINISTRATOR'S
PETITIONERS DOCKET NO.: DJ630075OM
------------------------------------X
ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
The above-named petitioner-tenants timely filed or refiled
petitions for administrative review (PAR's) against an order issued
on October 31, 1991 by a Rent Administrator (Gertz Plaza)
concerning the housing accommodations known as 2175 Morris Avenue,
Bronx, New York, various apartments, wherein the Rent Administrator
determined that the owner was entitled to a rent increase based on
a major capital improvement (MCI).
The Commissioner deems it appropriate to consolidate these
petitions for disposition since they pertain to the same order and
involve common issues of law and fact.
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 these administrative appeals.
The owner commenced this proceeding on April 12, 1988 by initially
filing an application for a major capital improvement rent increase
predicated on the installation of a new boiler/burner, at the
subject premises, at a total claimed cost of $46,000.00. In
support of his application, the owner submitted copies of the
contracts, permits and cancelled checks.
Three tenants answered opposing the owner's application. In
substance, the tenants challenged the application on the grounds
that the new boiler/burner was purchased in 1988 by the previous
owner and that they (the tenants) were never told that an increase
ADMIN. REVIEW DOCKET NOS.: FL610054RT et al.
in rent would be requested. They, however, failed to identify any
pertinent reason why the rent increase should not be granted. Six
of the petitioning-tenants, namely the tenants of apartments 1E,
2E, 3C, 3G, 4D, and 5D did not submit any answer to the owner's
application.
On October 31, 1991, the Rent Administrator issued the order
hereunder review finding that the installation of a new
boiler/burner qualified as a major capital improvement, determining
that the application complied with the relevant laws and
regulations based upon the supporting documentation submitted by
the owner and allowing increases for both rent controlled and rent
stabilized apartments.
In their petitions for administrative review, the tenants
contended, in substance, that the boiler/burner was purchased some
four years before the time of petitioning; that the boiler/burner
was not new; that they never received any notice, informing them of
a new boiler/burner, prior to the installation; that they live on
a fixed income; and that they cannot afford an increase in rent.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that these petitions should be
denied.
Rent increases for major capital improvements are authorized by
Section 2522.4 of the Rent Stabilization Code for rent stabilized
apartments. Under rent stabilization, the improvement must
generally be building-wide; depreciable under the Internal Revenue
Code, other than for ordinary repairs; required for the operation,
preservation, and maintenance of the structure; and replace an item
whose useful life has expired.
The Commissioner notes that the installation of a new boiler/burner
qualifies as a major capital improvement for which an increase may
be warranted. The record indicates that the owner substantiated
his application by submitting copies of the permit, contract 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 tenants do not allege any errors on which the Rent
Administrator's order was based but merely assert that the boiler
was not new; that they were not informed of the new boiler/burner
prior to the installation and that they cannot afford an increase
in rent.
2
ADMIN REVIEW DOCKET NOS.: FL610054RT et al.
The Commissioner finds that a new boiler/burner was purchased and
installed in 1988 by Hi-Tech Combustion Ltd. as per the supporting
documents submitted by the owner; that due process was afforded to
all tenants; and that three tenants, including one of the
petitioning-tenants, opposed the owner's application but failed to
identify any pertinent reason why the rent increase should not have
been granted.
With regard to the tenants' assertion that they were never informed
of the new boiler/burner, prior to its installation, the
Commissioner notes that such prior notice is not necessary and that
tenants' consent is also not necessary where the installation
qualifies as a major capital improvement.
A review of the Division's records discloses that no rent increase
was previously granted for the installation of a new boiler/burner
for the subject premises. Further, it is the established position
of the Division that the installation of a new boiler/burner to
replace one that has exceeded its useful life, as is the case in
the instant proceeding, constitutes a major capital improvement for
which a rent increase may be warranted, providing the owner
otherwise so qualifies.
The Commissioner is not unmindful of the possibility that the rent
increase may prove burdensome to some tenants. However, the
Commissioner is constrained by the applicable statutory and
regulatory provisions to grant such increases as are warranted.
A tenant who has a valid Senior Citizen Rent Increase Exemption
Order (SCRIE) is exempted from that portion of the increase which
would cause the rent to exceed one-third of the tenant's household
monthly disposable income. A tenant who may be entitled to this
benefit may contact the New York City Department of the Aging by
calling (212) 240-7000.
THEREFORE, in accordance with the applicable provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that these administrative appeals be, and the same hereby
are denied, and that the Administrator's order be, and he same
hereby is affirmed.
ISSUED:
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JOSEPH A. D'AGOSTA
Deputy Commissioner
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