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
APPEALS OF DOCKET NOS.: GF510047RT
: GF510317RT
VARIOUS TENANTS OF 106 CONVENT GF510321RT
AVENUE, NEW YORK, NY GF510336RT
PETITIONERS : GF510352RT
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RENT ADMINISTRATOR'S
DOCKET NO.: EF530136OM
ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
On various dates, five tenants timely filed petitions for administrative
review against an order issued on May 20, 1992, by a Rent Administrator
(Gertz Plaza) concerning the housing accommodations known as 106 Convent
Avenue, New York, New York, various apartments, wherein the Rent
Administrator determined that the owner was entitled to a rent increase
based on the installation of a major capital improvement (MCI).
The Commissioner deems it appropriate to consolidate these petitions for a
uniform disposition since they pertain to the same order and involve common
issues of law and fact.
The owner commenced this proceeding on June 25, 1990, by initially filing
an application for a rent increase based on the installation of apartment
windows at a cost of $47,600.00.
Several tenants objected to the owner's application, alleging, in
substance, that the former windows were not properly maintained by the
owner, and as a result, had deteriorated beyond repair; the new windows
were fragile and unsafe; and the dimensions of the new windows were
different from the former windows, thus preventing the tenants from the use
of their storm windows, screens, gates and air conditioners. The tenant of
apartment #26 contended, in substance, that the former windows were in such
a state of disrepair that he had to install storm windows, screens and
gates which were not replaced upon the installation of the new windows, but
were discarded by the owner; and that his air conditioner no longer fit due
to the changed dimensions of the new windows.
On May 20, 1992, the Rent Administrator issued the order here under review,
finding that the installation qualified as an MCI, 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 rent controlled and rent stabilized tenants.
In these petitions, the tenants contend, in substance, that: (1) the former
windows had deteriorated beyond repair as the owner failed to do routine
building maintenance; (2) two apartments (15 and 26) had been burglarized;
(3) the windows improve the value of the property for the owner, therefore,
the tenants should not be burdened with a permanent rent increase; (4) the
ADMIN. REVIEW DOCKET NO.: GF 510047-RT, et al.
tenant of apartment 3 had to buy new blinds and a new air conditioner due
to the changed dimensions of the windows; (5) the tenant of apartment 8
signed the initial lease for a newly renovated apartment in June 1991 at a
monthly rental of $550.00 (the former tenant paid a monthly rent of
$193.00), and was told that the rent included the new windows which were
installed prior to his initial lease; (6) the tenant of apartment 6 states
that the new windows were installed prior to her renting the apartment in
September 1990, that there is no provision in her initial lease concerning
an MCI, and that she should not have to pay a retroactive increase; and (7)
the tenant of apartment 26 states that she had purchased storm windows
which were discarded by the owner when the new windows were installed, and
that she was not given an alternative to taking the new windows.
In response to the tenants' petitions, the owner contends, in substance,
that it had no knowledge of any burglaries of the tenants' apartments,
that any window broken during a burglary attempt would be replaced by the
owner; that the tenant of apartment 8 was not told that the cost of the new
windows had been factored into the initial rent, rather this tenant's lease
agreement specifies that they (the tenants) were subject to the pending MCI
rental increase application for new windows under Docket No. EF530136OM;
that storm windows were never provided to the tenant of apartment 26; and
that several of the petitioner-tenants had not opposed the owner's MCI
application.
After careful consideration of the entire record, the Commissioner is of
the opinion that these petitions should be denied.
Rent increases for major capital improvements are authorized by Section
2202.4 of the Rent and Eviction Regulations for rent controlled apartments
and Section 2522.4 of the Rent Stabilization Code for rent stabilized
apartments. Under rent control, an increase is warranted where there has
been since July 1, 1970 a major capital improvement required for the
operation, preservation, or maintenance of the structure. 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.
It is the well established position of the Division (as reflected in Policy
Statement 89-6), that the building-wide installation of all apartment
windows and/or public area or lot line windows to replace windows which are
25 or more years old (as is the case herein) constitute a major capital
improvement for which a rent increase may be warranted, provided the owner
otherwise so qualifies. The fact that the work also benefits the owner
makes no difference as to whether the work qualifies as an MCI entitling
the owner to rent increases. Additionally, tenant consent is not required
for an MCI rent increase.
The record discloses that the owner substantiated its application in the
proceeding below by submitting to the Rent Administrator in support thereof
copies of the contract, contractor's certification and cancelled checks
ADMIN. REVIEW DOCKET NO.: GF 510047-RT, et al.
for the improvement in question. The petitioners herein, on the other
hand, have failed to establish, either in the proceeding below or an
appeal, the alleged inadequacy of the work performed or that services were
not being maintained. In this respect it is significant to note that the
records of the Division disclose that no rent reduction order had been
issued against the subject premises based on the owner's failure to
maintain services of a building-wide nature nor was any such complaint
pending at the time the order appealed herein was issued. The tenants have
failed to establish that the Administrator's order should be revoked.
In the event of a change of tenancy during an MCI proceeding, it is the
obligation of the owner to notify the new tenant of the pendency of such
proceeding, and to advise the Division of this change in tenancy. While
not fatal to the owner's application, the owner runs the risk of the tenant
who was not so notified raising issues on appeal which could have been
raised in the proceeding below, thus jeopardizing the finality of the
Administrator's order.
Where, as in the instant case, the tenant of apartment #6 took occupancy
pursuant to a vacancy lease commencing after the owner had filed its
application, the Commissioner notes that for the MCI increase granted by
the Administrator's order to be collectible during the term of the
petitioner's vacancy lease, such vacancy lease would have to contain a
specific clause advising the tenant of the docket number 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
2522.4(a)(5) of the Rent Stabilization Code and established Division
precedent. In the absence of same, said increase was not collectible until
the expiration of the lease term in effect at the time of issuance (May 20,
1992) of the MCI order, provided the renewal lease contains a general
authorization provision for adjustment of the rent reserved by a DHCR
order.
As to any apartment which was subject to Rent Control at the time the
instant application was filed and which subsequently became subject to Rent
Stabilization jurisdiction (as is the case with apartment 8 herein), the
Commissioner notes that since the free market rent charged the first
stabilized tenant included any and all services then being provided, and in
the absence of a fair market rent appeal, the rent increase provided for in
this order is not collectible from the first stabilized tenant or any
subsequent tenant of such apartment.
As to the tenants' contention pertaining to the permanent nature of the
increases granted, the New York Court of Appeals has concluded that the
Rent Stabilization Law authorizes this Division to grant permanent rent
increases for MCI's, and that the law does not limit the time during which
the increases can be imposed. In the Matter of Ansonia Residents
Association, et al., v. DHCR et al., 75 N.Y. 2d 206, 551 N.Y.S. 2d 871
(1989).
Finally, the Commissioner notes that an owner is required to maintain that
level of services which was provided or required to be provided on the
ADMIN. REVIEW DOCKET NO.: GF 510047-RT, et al.
applicable "base date", and all additional services provided or required to
be provided thereafter. The courts have held that such services are not
confined to the services set forth in the lease in effect on the "base
date", but that it is the actual services, not the lease provisions, which
control the requisite level of services. Consequently, it has been held
that where a tenant, with the owner's express or implied consent and with
or without a separate charge, installed an air conditioner, window guard,
storm windows or blinds in the apartment, the tenant's right to maintain
these items constitutes a service included in the rent which the owner is
not permitted to modify or discontinue. Unless the owner did not consent
to these items being installed in a tenant's apartment, the owner must, at
his or her own expense, remove and reinstall said items when any exterior
work requires such removal and reinstallation. However, the agency has
determined that the Rent Stabilization Law and Code do not require a major
capital improvement (such as the installation of new windows) to fit the
size of an individual tenant's air conditioners, nor do they require the
owner to buy the tenant's air conditioners that fit the new windows.
The Commissioner notes that this order is issued without prejudice to the
tenants' filing complaints with this Division based on a rent overcharge
and/or a reduction in services, if the facts so warrant.
On the basis of the entire evidence of record, it is found that the
Administrator's order is correct and should be affirmed.
THEREFORE, in accordance with the Rent Stabilization Law and Code, and the
New York City Rent and Eviction Regulations, it is
ORDERED, that these petitions be, and the same hereby are, denied; and that
the Administrator's order be, and the same hereby is, affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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