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.: GG410150RT
APPEALS OF GG410159RT, GG410194RT
GG410225RT
VARIOUS TENANTS OF
330 E. 77TH STREET RENT ADMINISTRATOR'S
NEW YORK, NY DOCKET NO.: EB410121OM
PETITIONERS
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ORDER AND OPINION GRANTING IN PART PETITIONS FOR ADMINISTRATIVE
REVIEW
On various dates the above-named petitioner-tenants timely filed
Petitions for Administrative Review against an order issued on
June 24, 1992 by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York, concerning the housing accommodations known as
330 East 77th Street, New York, New York, various apartments.
Four tenants filed individual petitions for administrative review
which have been consolidated herein for a uniform disposition.
The applicable sections of law are Sections 2522.4 and 2522.5 (d)
(2) of the Rent Stabilization Code.
The owner commenced this proceeding on February 20, 1990 by filing
an application for a rent increase based on the installation of
major capital improvements (MCIs), to wit: a boiler/burner,
elevator upgrade, pointing and waterproofing, and a new roof.
One tenant objected to the owner's MCI application, claiming that
the roof leaked.
On June 24, 1992, the Rent Administrator granted the MCI
application in part, determining the boiler/burner and elevator
upgrade qualified for an MCI rent increase but disallowing a rent
increase for waterproofing, pointing and a new roof because the MCI
application was filed more than two years from date this work was
completed and thus is disqualified pursuant to Section 2522.4 (a)
(8) of the Rent Stabilization Code.
ADMIN. REVIEW DOCKET NO. GG-410150-RT
In their petitions, the tenants allege that they never received
notice of the installlations of the MCI application, and that the
installations were necessitated due to poor maintenance. The
tenant of apartment 4A alleges that he never received notice of the
MCI application in his lease when he moved into his apartment in
September 1989. The tenant of apartment 5D alleges that the old
boiler/burner was replaced with a defective used boiler/burner
which needed to be replaced in less than a year.
In response to the tenants' petitions, the owner contends, in
substance, that due to the emergency nature of the installations of
both the boiler/burner and the elevator controller, prior
notification to the tenants was not possible. The owner also
states that the DHCR notified the tenants of her application; that
the elevator and boiler/burner were properly maintained; that the
new furnace cracked beyond repair within 14 or 15 months and had to
be replaced at the owner's cost; and that she did not file new MCI
papers for this subsequent replacement of the furnace.
After a careful consideration of the entire record, the
Commissioner is of the opinion that these petitions should be
granted in part.
As to the tenants' allegation that they did not receive notice of
the MCI application, the record discloses that all of the tenants
were served by the Division on May 9, 1990 with copies of the
owner's application, but that only one tenant submitted a response.
As to the claim by the tenant of apartment 4A that his lease did
not contain a notice of the pending MCI application, the
Commissioner notes that this tenant commenced occupancy in
September 1989. The MCI application was filed by the owner in
February 1990. Section 2522.5(d)(2) and (4) of the Rent
Stabilization Code requires only notice in a vacancy lease of a
pending MCI application. The owner was under no obligation to
include any specific mention of the installation prior to the
filing of her MCI application.
As to the tenants' allegation that poor maintenance of the elevator
and boiler/burner contributed to their condition of disrepair, the
Commissioner notes that the installation of the elevator
controllers and a boiler/burner meet the criteria for a major
capital improvement under Section 2522.4(a) of the Rent
Stabilization Code as set forth below. This order and opinion is
issued without prejudice to the tenants' right to file an
application for a rent reduction based on a diminution of service,
if the facts so warrant.
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ADMIN. REVIEW DOCKET NO. GG-410150-RT
As to the tenant's allegation and the owner's subsequent admission
that the boiler/burner, which is the subject of the current MCI
increase, was replaced with another unit, the Commissioner finds
that the increase for the boiler/burner must be disallowed.
Pursuant to Section 2522.4 (a) (2), major capital improvement rent
increases are warranted when improvement is 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.
In addition, the Rent Stabilization Code sets forth additional
requirements which the owner must meet in order to qualify for a
rent increase. These requirements include the submission of
contractor's certification of cost of work, proof of payment,
necessary government approvals, and an owner's affidavit that the
installation had been properly performed in a workmanlike manner,
and that all information submitted with the application is
truthful.
In the instant case the boiler/burner that was installed in April
of 1989 was replaced, by the owner's own admission, 14 or 15 months
later, while the MCI application was still pending. The record
shows that the owner did not notify the Rent Administrator that the
boiler/burner was replaced. No documentation to substantiate this
replacement of the newly installed boiler/burner was included in
the record. Furthermore, as to the workmanship of the first
installation, as the record now stands, the first installation must
be considered defective. Lastly, since the second installation
occurred during the application process, the owner had an
affirmative duty to notify the Rent Administrator. In essence, the
application and information submitted by the owner contained
material omissions which undetermined the veracity of the owner's
application.
The Commissioner finds that the rent increase for the boiler/burner
should be excluded retroactively from the effective date of the
Administrator's order and that the permanent rent increase should
be reduced to $5.18 per room per month as follows:
1. Approved MCI cost for elevator controller $11,000.00
2. Amortization by 60 months (line 1 divided by
line 60) $ 171.22
3. Total number of rent stabilized rooms 33
4. Rent increase per room per month $ 5.18
(line 2 divided by line 3)
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ADMIN. REVIEW DOCKET NO. GG-410150-RT
The resulting reduction in rent continues in effect notwithstanding
that an Article 78 proceeding for judicial review or any other
legal action may have been taken in connection with this order of
the Commissioner unless and until an order is issued to the
contrary.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is
ORDERED, that these petitions be, and the same hereby are, granted
in part, and that the Rent Administrator's order be, and the same
hereby is, modified in accordance with this order and opinion, and
it is further
ORDERED, that the owner refund any excess rent collected as a
result of this order and opinion by granting to the tenants a
credit of twenty percent per month of such excess rent commencing
on the first rent payment date after the issuance of this order and
opinion until all overpayments have been made.
ISSUED:
____________________
Joseph A. D'Agosta
Deputy Commissioner
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