GI110118RO

           

                          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     S.J.R. NO.: 6838
IN THE MATTER OF THE ADMINISTRATIVE     
          APPEAL OF                               ADMINISTRATIVE REVIEW        
          DOCKET NO.: 
                 EILAT MANAGEMENT CORP.,          GI110118RO
                                                  
                                                  RENT ADMINISTRATOR'S
                                   PETITIONER     DOCKET NO.:         
          ----------------------------------x     DC130035B



           ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW,
                                       IN PART
                                          

          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.












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          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 





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          identified).

          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 
          sections.

          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 










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          services.  

          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 
          complaint.

          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 
          rooms.

          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 





          GI110118RO


          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 
                    added)
               
               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.
                    (Emphasis added)
               
          Since the roach infestation was confirmed in public areas, the rent 
          reduction imposed building-wide was proper and in accordance with 
          agency practice.

          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 










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          "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 
          reduction.

          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 
          warrant.

          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.





          GI110118RO




          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.


          ISSUED:




                                                                           
                                                JOSEPH A. D'AGOSTA
                                                Deputy Commissioner


                                          






    

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