STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
-------------------------------------X ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET Nos.: GH210077RT,
APPEALS OF GH210131RT, GH210132RT,
VARIOUS TENANTS OF GH210154RT, GH210160RT,
145 72ND STREET GH210169RT, GI210002RT,
BROOKLYN, NY GI210015RT
DOCKET NO.: CJ210198OM
ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
On various dates, the above named petitioner-tenants timely filed
petitions for administrative review (PARs) against an order issued
on August 5, 1992, by a Rent Administrator (Gertz Plaza) concerning
the housing accommodations known as 145 72nd Street, Brooklyn, New
York, wherein the Rent Administrator granted, in part, the owner's
application for a rent increase based on the installation of major
capital improvements (MCIs).
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 October 28, 1988 by
initially filing an application for a rent increase based on the
installation of the following items at a total cost of $193,500:
new roofs for the two building complex (145 72nd Street and 138
71st Street), pointing and waterproofing and associated masonry
work, replacement of the parapets and coping, tarpapering of the
garage roof, installation of a concrete courtyard on top of the
garage and the painting of the fire escapes.
The tenants objected to the owner's MCI application, alleging, in
substance, that the owner did not install complete new roofs; that
the pointing work was not identified on the application; that the
garage roof work constituted only a repair; that the garage roof
still leaked; that the improvement to the garage roof only benefits
the tenants that use the garage; that the improvements were
necessitated by years of neglect; that the rent roll was
inaccurate; and that the costs of the improvements were paid out of
the cooperative's reserve fund.
ADMIN. REVIEW DOCKET NOS. GH-210077-RT ET AL
A physical inspection of the subject premises occurred on February
26, 1992, wherein the inspector noted that the "walkway roof" over
the garage was replaced; that there was a leak stain on the
northeast section of the garage roof; and that the two buildings'
roofs were completely replaced and in excellent condition.
On August 5, 1992, the Rent Administrator issued the order here
under review, granting in part the owner's MCI application and
authorizing an increase based upon an approved cost of $162,100.00
upon finding that the new building roofs, pointing and
waterproofing, the masonry work and the parapets qualified as MCIs
based upon the supporting documentation submitted by the owner.
Disallowed by the Administrator was the claimed cost of $5,400.00
for the garage roof and $31,000.00 for the concrete courtyard on
top of the garage and the painting of the fire escapes upon finding
the work did not qualify as MCIs.
In these petitions, the tenants contend, in substance, that the
cooperative corporation should have used the reserve fund to pay
for the MCIs; that the improvements are being done over; that the
work constituted repairs or maintenance; that water inundates
apartments during rain storms; that prices for the work were
inflated; and that the retroactive increase is a hardship.
In response to the tenants' petitions, the owner contends, in
substance, that the tenants' allegations were not submitted in
opposition to the application; that it is a violation of the rent
regulations to use reserve funds for MCIs; that the installations
qualify as MCIs; that the owner submitted proof that all the work
was completed in a workmanlike manner; and that tenants' claim that
work is being done over is vague and without basis.
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 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 record in the instant case indicates that the owner correctly
complied with the application procedures for a major capital
improvement. The owner substantiated its application in the
proceeding below by submitting to the Administrator documentation
in support of the application, including the contractor's
certifications, copies of contracts, estimates, and cancelled
checks. The Rent Administrator properly computed the appropriate
rent increases. The tenants have not established that the increase
should be revoked.
ADMIN. REVIEW DOCKET NOS. GH-210077-RT ET AL
The tenants' contention that the owner should not be entitled to a
rent increase because the installations were ordinary maintenance,
is without merit. The work in question meets the criteria for an
MCI as stated in Section 2522.4 of the Rent Stabilization Code as
set forth above, and it has been the long-standing policy of the
Division to consider the installation of a new roof, conprehensive
pointing and waterproofing where necessary, parapets and associated
masonry work to qualify as MCIs.
On the other hand, the tenants have submitted on this appeal no
evidence to support any of their allegations. The Commissioner
further notes that the tenants' allegations were raised for the
first time on appeal, thus may not be considered at this stage of
the proceeding as this is not a de novo proceeding.
As for the tenants' claim that the owner should have used the
reserve fund to finance the MCIs' the Commissioner notes that the
owner is not required to pay for MCIs out of the cooperative
THEREFORE, in accordance with the Rent Stabilization Law and Code,
ORDERED, that these petitions be, and the same hereby are denied;
and that the Administrator's order be, and the same hereby is
Joseph A. D'Agosta