STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
----------------------------------x S.J.R. NO.: 6838
IN THE MATTER OF THE ADMINISTRATIVE
APPEAL OF ADMINISTRATIVE REVIEW
EILAT MANAGEMENT CORP., GI110118RO
PETITIONER DOCKET NO.:
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW,
On September 23, 1992, the above-named petitioner-owner filed a
petition for administrative review of an order issued on August 19,
1992, by the Rent Administrator, concerning the housing accommo-
dation known as 138-15 Franklin Avenue, Queens, New York, wherein
the Administrator determined the tenants' complaint of building-
wide services decreases.
Subsequently, the owner deemed its petition for administrative
review as having been denied and sought judicial review in the
Supreme Court of the State of New York pursuant to Article 78 of
the Civil Practice Law and Rules.
In an order dated July 9, 1993, the Court (Smith, J.) denied the
owner's petition to annul the "deemed denial" of the petition for
administrative review and granted the DHCR's cross motion to remit
the proceeding to the agency, subject to an expeditious determina-
tion of the administrative appeal.
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 the administrative appeal.
The subject premises is a multi-story building consisting of three
(3) sections denominated A, B, and C by the tenants, has an ele-
vator in each of the three sections, separate compactor room lines
in each section, and two (2) laundry rooms, located in A and C.
The premises were converted to co-operative ownership in January
1985. The owner of the unsold shares is the proprietary lessee of
46 rent stabilized apartments in this 138 unit building.
The tenants filed the complaint in March 1989. The owner, the
holder of unsold shares, acknowledged notice of the complaint, and
stated that it promptly advised the Administrator and the managing
agent that it did not control the provision of building-wide
services, as such responsibility remained with the co-operative
corporation. The above notwithstanding, the owner also requested
that the complaint be dismissed, denying the allegations set forth
in the complaint or otherwise asserting that all required repairs
had been or would be completed.
Notes in the Examiner's progress sheet indicate that a copy of the
complaint was also sent to the managing agent of the co-operative
corporation on August 16, 1990.
Inspections of the tenants' complaint were conducted on January 3,
1990 and on September 11, 1990. The inspectors reported, in perti-
nent part, that carpeting throughout the public areas was torn,
stated that public areas required extermination services and cited
roach infestation in several compactor rooms, deemed the public
area lighting to be inadequate, found that the Section B ventila-
tion system was not operating, and cited missing tiles in the
Section C laundry room window as well as an uneven floor. The
reports also reflected that the building had a compactor system,
rather than an incinerator, as suggested in the tenants' complaint.
On October 1, 1990, the owner was notified of the results of the
inspections and was advised to correct the conditions and submit
timely proof of compliance. The owner responded that it did not
manage the building, and requested that all correspondence be sent
to the co-operative corporation's managing agent. Notes in the
Examiner's progress sheet, dated November 9, 1990, state that the
owner and managing agent both say that the Rent Administrator
should contact the other party.
The subsequent inspection on June 20, 1992 reflected extensive
maintenance and repairs undertaken or completed after the initial
inspections. However, several conditions were reported, and fur-
nished the grounds for the rent reduction granted. The inspector
reported evidence of roaches in the fourth floor compactor rooms of
Section C, and the fourth, fifth and sixth floor compactor rooms of
Section A, black stains (spots) on the carpet throughout the public
areas by the compactor rooms, and by the exit and elevator doors,
and broken linoleum floor tiles in one of the laundry rooms (not
The Administrator issued an order on August 19, 1992 reducing rents
building-wide, based on findings of evidence of roaches in the
compactor rooms, broken laundry room floor tiles, and stained
public area carpets in heavily trafficked areas in all three
On appeal, the owner reiterates that it has been wrongfully
penalized, notwithstanding the findings, as it does not control
services to public areas, which are under the sole control and
jurisdiction of the co-operative corporation.
However, the Division has consistently held that all owners have an
overlapping responsibility for the maintenance of services.
Responsibility stems from the definition of an owner under Section
2520.6(r) of the Rent Stabilization Code. The Code defines owners,
in addition to fee owners and their managing agents, to include,
among others, proprietary lessees, Co-op sponsors (i.e. holders of
unsold shares), and any person or entity entitled to receive rents.
The owner's remedy, if any, stemming from liability incurred for
failure to provide services lies against the Co-operative corpora-
tion, based on the terms of their agreement making the corporation
responsible for providing building-wide required services.
Turning to the services items, the owner points out that laundry
room tile defects were not raised in the tenants' complaint, rent
reductions based on the condition were improper, and violative of
the petitioner's due process. The petitioner also contends that
the tile defects, the carpet stains, and the compactor room roach
problems were routine maintenance items insufficient to warrant the
rent reductions imposed.
The owner's supplement to the petition for administrative review
reiterates and elaborates upon arguments as more fully set forth
below, that the conditions found constituted routine maintenance
which did not warrant a rent reduction, and that the findings were
outside the ambit of the complaint.
The tenants responded, among other things, that the building
remains roach infested.
After careful consideration, the Commissioner is of the opinion
that the petition should be granted in part.
Pursuant to Section 2523.4 of the Rent Stabilization Code, DHCR is
required to order a rent reduction, upon application by a tenant,
where it is found that an owner has failed to maintain required
The owner argues that the inspector's observation that the carpets
throughout public areas Sections A, B and C have black stains
(spots by the compactor rooms, exit doors and elevator doors), does
not confirm that the carpets were "filthy" as alleged in the
The record confirms that the carpets were in better condition since
the initial 1990 inspection that confirmed the tenants' complaint.
However, stained carpets clearly fall within the criteria
constituting a services decrease warranting a rent reduction. It
is also not surprising that the conditions were observed building-
wide in the most heavily trafficked areas, i.e., in "front of
compactor rooms, exit doors and elevator doors." However, it did
not abrogate or eliminate the owner's responsibility to maintain
clean carpets in these areas.
The owner also contends that the tenants had complained about
maintenance and roach infestation in the incinerator rooms in the
basement, and that the Rent Administrator went outside the ambit of
the tenants' complaint to find roach infestation in the compactor
The owner's appeal attempts to limit the terms "incinerator" room
and "compactor" room to the location in the building that houses
the compactor system, to which the tenants would not normally have
access. The tenants responded that the parties used these terms -
incinerator, compactor and garbage rooms - interchangeably to refer
to the refuse rooms on each floor in which the tenants deposit
refuse in the chutes located therein.
The record suggests that the owner understood that the tenants'
complaint of roach infestation referred to a building-wide com-
plaint regarding the garbage rooms to which the tenants have access
on a daily basis.
The owner's April 1989 answer to the tenants' complaint states that
the exterminator visited the individual apartments and the incine-
rator rooms monthly.
The Administrator's October 1, 1990 notice to the owner of the
results of the January and September 1990 inspector referred to
evidence from the inspections of roach infestation in the compactor
rooms on various floors.
The owner also referred to compactor rooms, in a building-wide
context, in presenting its arguments regarding the carpet stains.
The owner's argument that it is unnatural to expect a garbage room
to be free of evidence of roaches, is in direct contradiction to
the requirements set forth in the City Department of Buildings
Rules Relating to the Construction and Maintenance of Refuse Chutes
and Refuse. Subsections 12 and 13 of the Rules, submitted with the
owner's petition, state that:
12. Maintenance. Refuse chutes, refuse rooms,
hoppers and all parts of the refuse collecting
system shall be maintained in a clean and san-
itary condition at all times, free of vermin,
odors and defects, and shall be maintained in
good operating condition. Fused sprinkler
heads shall be replaced promptly. (Emphasis
13. Pest control. The owner shall establish a
program to ensure that the refuse chute and
the refuse room and appurtenances will be
treated as often as may be necessary to
prevent infestation with insects or rodents.
The owner shall maintain a record of such
treatments which shall be available at all
times for inspection by the department.
Since the roach infestation was confirmed in public areas, the rent
reduction imposed building-wide was proper and in accordance with
The fact that there is no official designation of an "A", "B", and
"C" wing of the building does not constitute failure to give notice
of complaints of defect in the buildings or excuse the owner from
correcting the defects.
The owner further alleges that the DHCR provided the owner an
incomplete report of the inspection conducted on July 20, 1992, in
that only the second and third pages of the three page report were
provided. If true, the Commissioner notes that the copies provided
contained all the inspection results of the conditions upon which
the Rent Administrator predicated the rent reduction.
The Commissioner notes that the inspector was instructed, in perti-
nent part, to "5) Check for roaches", to inspect the "6) laundry
room floor for any defects", and to inspect "10) carpets in all
public areas if torn or dirty". The owner's suggestion that it was
"handicapped in comparing the requests versus the actual reports
which resulted in a dramatic rent reduction in the subject
premises" does not raise any issue warranting reconsideration of
the Rent Administrator's order. The record, detailed above,
establishes that the owner had ample notice of the tenants'
complaint and of the conditions that gave rise to the rent
The petitioner also argues that the DHCR abused its discretion
because it did not divest itself of jurisdiction regarding the
roach infestation condition, as it allegedly has in elevator
matters, and suggests that responsibility for the problem falls
under the joint jurisdiction of the City Department of Buildings
and the Department of Health.
The suggestion that the agency's failure to divest itself of
jurisdiction over the compactor room roach problem constituted an
abuse of discretion is without merit. Section 2520.6(r) of the
Rent Stabilization Code defines required services to include
services required to be provided by applicable law. Section
2523.4(r) provides for rent reductions where it is found that
required services have not been maintained.
Both the City Building Code referred to by the owner, and the City
Health Code (Section 151 et seq.) mandate measures sufficient to
eradicate insects or other pests from the premises. The evidence
of record reflects that the eradication measures, if any, employed
by owner, failed to eliminate the roach infestation.
These conditions mandated the rent reductions imposed, notwith-
standing the petitioner's effort to "question the rationality of
the criteria the agency imposes in expecting that a garbage room be
without any evidence of garbage and/or roaches . . . ."
The report of broken laundry room linoleum tiles upon reinspection,
but not in the initial inspection almost two years prior, indicates
that the condition was not contemplated in the tenants' complaint,
and renders credible the owner's explanation that it arose in
connection with more recent repairs to a burst pipe beneath the
laundry room floor. Accordingly, the condition is revoked as a
basis for rent reductions.
The owner may file a rent restoration application if the facts so
The automatic stay of the retroactive rent abatement that resulted
in the filing of this petition is vacated upon issuance of this
Order and Opinion.
THEREFORE, in accordance with the provisions of the Rent Stabiliza-
tion Law and Code, it is,
ORDERED, that the owner's petition be, granted in part, in that the
Administrator's order be amended to revoke laundry room floor tile
defects as a basis for the rent reduction. In all other respects,
the Rent Administrator's order is affirmed.
JOSEPH A. D'AGOSTA