DOCKET NO.: GK420197RT
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
IN THE MATTER OF THE ADMINISTRATIVE :
APPEAL OF ADMINISTRATIVE REVIEW
: DOCKET NO. GK420197RT
ROBERT DABROWSKI, DISTRICT RENT ADMINISTRATOR'S
: DOCKET NO. EH420045RP
PETITIONER
--------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART
AND REMANDING PROCEEDING TO THE RENT ADMINISTRATOR
On November 25, 1992, the above-named tenant filed a petition for
administrative review of an order issued on October 29, 1992 by a Rent
Administrator concerning the housing accommodation known as Apartment 2-R, 24
Minetta Lane, New York, New York.
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 petition for review.
This proceeding was commenced by the subject tenant filing a "Request for
Registration Information," dated July 21, 1988, with the Division of Housing
and Community Renewal (D.H.C.R.). In the above-mentioned tenant's request,
the tenant asserted, among other things, that he first took occupancy on May
1, 1966; that his current rent is $427.29 per month, and that the subject
tenant is rent controlled.
On January 27, 1989, the Administrator mailed to the subject tenant and owner
a "Notice of Commencement of Proceeding to Determine Facts or Fix Maximum or
Legal Regulated Rent," to determine the rental status of the subject
apartment.
The Administrator issued an order on May 19, 1989, under Docket No.
CK420007AD, which determined that the subject apartment is rent controlled,
and that the subject apartment's maximum rent is $30.70 per month effective
August 1, 1970.
The subject owner filed a petition for administrative review, dated June 22,
1989, of the Administrator's order issued under Docket No. CK420007AD. The
owner's petition alleged, among other things, that the aforementioned notice
was mailed to an address no longer used by the subject owner; that the
subject owner submitted an answer to the above-mentioned notice that was
received by D.H.C.R. on May 18, 1989; that the subject tenant is subject to
rent stabilization; that the subject tenant's initial rent in 1966 was
$225.00 per month, and that the Administrator was in error by establishing
the subject tenant's maximum rent at $30.70 per month effective August 1,
1970.
DOCKET NO.: GK420197RT
The Commissioner issued an order on August 19, 1990, under Docket No.
DF420173RO, finding that the subject owner had "inadequate notice and
opportunity to submit evidence as to the regulatory status of the apartment."
The Commissioner remanded the proceeding to the Administrator to reconsider
those issues pertaining to the rental status and the legal rent of the
subject apartment. The Commissioner established an interim rent of $229.00
per month (the average of the last rent charged by the subject owner which
was $427.29 per month and the rent of $30.70 per month which was established
by the Administrator's order issued under Docket No. CK420007AD) until the
Administrator issued a new order.
On September 6, 1990, the Administrator mailed to the parties to the
proceeding a "Notice of Proceeding to Reconsider Order Pursuant to Remand."
The notice directed the parties to submit their responses to the
Administrator for the purpose of substantiating their allegations as to the
issues raised in the aforementioned Commissioner's order.
On September 19, 1990, the subject tenant filed a response which alleged,
among other things, that the subject tenant first took occupancy in the
subject apartment in 1966 pursuant to a lease; that the subject tenant
"continued to receive renewal leases every two years, where until 1988 the
rent was $427.00 per month," and that the subject tenant has been overcharged
as the Administrator established the legal rent at $30.70 per month.
On October 18, 1990, the subject owner filed a response which alleged, among
other things, that the subject building's current Certificate of Occupancy
(C. of O.) is dated April 8, 1960, which was issued based upon a substantial
alteration of the subject building; that the substantial alteration of the
subject building was performed between 1958 and 1960 by an earlier owner of
the building; that the subject owner stated that: "rent control jurisdiction
specifically extends only to premises constructed prior to February 1, 1947,
and buildings having a post-February 1, 1947 Certificate of Occupancy are
specifically excluded from rent control coverage"; that as the subject
building's Certificate of Occupancy was issued in 1960, the subject owner
asserted, the subject building is exempt from rent control, and that, the
subject owner alleged, D.H.C.R. should issue an order determining that the
subject apartment is rent stabilized.
On December 12, 1990, a physical inspection of the subject apartment was
carried out by the D.H.C.R. The inspector's report noted that, among other
things, the subject apartment consisted of a kitchen, a bathroom, a dining
room, a sitting room, a living room, and a bedroom; that the subject
apartment is a self-contained unit; that the subject tenant does not share
any facilities with any other tenants, and that the subject building consists
of eight apartments.
The owner submitted a further response, dated November 29, 1991, in which the
owner alleged, among other things, that:
1) The subject building was constructed in the
late 1890's or early 1900's as an old law
tenement;
DOCKET NO.: GK420197RT
2) When the subject building was registered with
the Office of Price Administration (O.P.A.) in
1943 the subject apartments did not have,
among other things, central heat, hot water,
mechanical refrigeration service, stoves,
bathrooms and upgraded electrical system, and
that toilet facilities were shared;
3) The prior owner substantially gutted the
subject building's interior to create eight
Class "A" apartments;
4) There were two separate C. of O.'s issued
relating to the alteration of the subject
building;
5) The subject building is exempt from rent
control as a result of the alterations
performed from 1955 - 1958 which created eight
new self-contained Class A apartments where
none had existed before;
6) The subject apartment is also decontrolled due
to owner-occupancy decontrol as a prior owner
of the subject building had resided in the
subject apartment for one year or more;
7) As a result of the alteration to the subject
building, the subject apartment was expanded
from a two-room apartment to a four-room
apartment, and
8) The subject apartment is also decontrolled due
to "luxury decontrol," pursuant to Section
2200.2(f)(14)(i) of the City Rent and Eviction
Regulations.
To the above-mentioned response the subject owner attached, among other
things, the rent registration cards of various apartments in the subject
building that were filed with the O.P.A. in 1943. The registration cards
pointed out that the toilet facilities were shared.The registration cards
also noted, among other things, that hot water, a bathroom, central heating,
a stove, a refrigerator, light and a elevator, were not required services to
be supplied by the landlord.
The Administrator requested that the Hearing Bureau of the D.H.C.R. conduct
a hearing to determine the rental status of the subject apartment.
On April 9, 1992, the Administrative Law Judge mailed a "Notice of Hearing,"
to the parties to this proceeding which directed the subject owner to submit
at the hearing evidence of the following:
DOCKET NO.: GK420197RT
1) That the subject apartment was owner-occupied
for a period of one year or more, and that it
was rented after April 1, 1953;
2) That the subject apartment's monthly rent as
of April 1, 1960 was $250.00 or more, and that
the required notices and decontrol
applications were timely filed, and
3) That the subject building was substantially
altered on or after May 1, 1950 which resulted
in additional housing accommodations
consisting of self-contained family units.
Hearings were held on June 5, 1992 and July 29, 1992 in which the subject
tenant and owner appeared. The Administrative Law Judge made the following
determinations:
1) That the evidence submitted by the subject
owner did not show that the subject apartment
should be decontrolled due to owner occupancy;
2) That the evidence submitted did not show that
the alleged owner-occupant resided in the
subject apartment for at least one year while
owner of the subject building;
3) That the alleged owner-occupant "divested
himself of title to the unit on July 26,
1952";
4) That the subject apartment's monthly rent was
$250.00 on April 1, 1960, but the apartment is
not subject to "luxury decontrol," pursuant
to Section 2200.2(f)(14)(i) of the City Rent
and Eviction Regulations, as the rent agency's
records do not show that a decontrol report
was filed with the rent agency;
5) That the registration cards for the subject
building indicates that the apartments
registered in 1943 did not contain a bathroom,
and a kitchen, or equipped with cooking or
refrigeration equipment;
6) That the building plans, that were filed with
the Department of Building's Alteration No.
745-1955, showed that prior to the subject
building's alterations there was an air shaft
located in the center of the building;
DOCKET NO.: GK420197RT
7) That an architect, from the architectural firm
which prepared the blueprints for the
alterations of the subject building,
"testified credibly that the resulting work
transformed what was essentially eight cold
water flats into apartments which contained
kitchens and bathrooms";
8) That the architect also testified that the
work included: "the installation of heating,
plumbing, electrical and exhaust systems," and
that: "The floors of the building were
rebuilt to cover what was formerly the air
shaft and in this newly constructed space the
kitchens and bathrooms were built";
9) That the record supports the owner's
allegation that the "work done was virtually a
gut renovation";
10) That by July, 1957 the aforementioned
alterations had been completed, and were
approved by the Department of Buildings as
indicated by C. of O. No. 47796;
11) That after the aforementioned alterations the
area of the subject apartment was
approximately 285 square feet, and therefore
could not be considered as a "self-contained
family unit," pursuant to the applicable rent
regulations;
12) That the record shows that in 1958 two rooms
were added to the subject apartment which
increased the area of the subject apartment to
673 square feet which resulted in the subject
apartment qualifying as a "self-contained
family unit";
13) That the subject building originally contained
eight units and that after all of the
alterations were completed the subject
building still contained eight units, and
14) That as a result of the alterations in the
subject building additional self-contained
family units were created, and therefore the
subject apartment should be decontrolled,
pursuant to Section 2200.9 of the City Rent
and Eviction Regulations.
DOCKET NO.: GK420197RT
In the order under review herein, the Administrator revoked its prior order
issued under Docket No. CK420007AD, and determined that the subject apartment
qualified for decontrol pursuant to Section 2200.9 of the City Rent and
Eviction Regulations. The Administrator also established that the subject
apartment's legal regulated rent should be $427.29 per month.
In his petition, the subject tenant asserts, among other things, that prior
to the conversion of the subject building it contained eight housing
accommodations; that after the conversion of the subject building it still
contained eight housing accommodations, and that as the conversion of the
subject building did not result in additional housing accommodations, the
subject apartment should not have been decontrolled by the Administrator. As
legal authority for his assertion the subject tenant cites the court cases
Panzer v. Berman, 53 Misc.2d 122, 277 N.Y.S.2d, 186 (1967), and Boss v.
Caputa, 9 A.D.2d 730, 192 N.Y.S.2d 237 (1959). The tenant's petition also
alleged that the Administrative Law Judge's findings should be reversed.
On February 17, 1993, the subject owner filed a response to the tenant's
petition. In the response the subject owner asserts, among other things,
that the subject building was converted from "a former old law tenement
building containing cold water flats into a modern Class A apartment building
consisting of eight self-contained family units"; that the size of the
subject apartment doubled after the work in the subject building was
completed; that: "additional housing accommodations were created in
apartment 2-R, so that instead of a two-room apartment, Apartment 2-R now
consisted of four-room apartment, plus a kitchen and bathroom"; that the
conversion of the subject building has met all of the conditions to be
eligible for decontrol as set forth in Section 2200.9 of the City Rent and
Eviction Regulations, and that, the owner alleges, there are court cases
which have interpreted the above-mentioned regulation as requiring the
decontrol of a housing accommodation where a conversion has resulted in
additional self-contained family units, even though the conversion did not
result in additional housing accommodations.
As legal authority for the owner's above-mentioned assertion the owner cites
the court cases Schuh v. Abrams, 19 Misc.2d 668, 195 N.Y.S.2d 237 (1955), and
319 West 108th Street Realty Corp. v. McGoldrick, 19 Misc.2d 678, 195
N.Y.S.2d 236 (1954).
The subject owner further asserts, among other things, that the subject
apartment has been decontrolled due to owner occupancy, pursuant to Section
2200.2(f)(11) of the City Rent and Eviction Regulations; that the subject
apartment is not rent controlled due to "luxury decontrol," pursuant to
Section 2200.2(f)(14)(i) of the City Rent and Eviction Regulations, as the
rent as of April 1, 1960 was $250.00 per month, and that the subject
apartment thereafter became vacant and was subsequently rented on or about
August 1, 1964 at a monthly rent of $250.00.
After careful consideration, the Commissioner is of the opinion that the
tenant's petition should be granted in part, and that this proceeding should
be remanded to the Administrator for further processing.
The relevant rent regulation in this proceeding is Section 2200.9(a)(1) of
the City Rent and Eviction Regulations which states in part that:
DOCKET NO.: GK420197RT
Upon application of the landlord, the administrator shall
issue an order decontrolling additional housing
accommodations, other than rooming house accommodations,
resulting from conversion of housing accommodations on or
after May 1, 1950, if there has been a structural change
involving substantial alterations or remodeling and such
change has resulted in additional housing accommodations
consisting of self-contained family units....
Section 2200.9(2) of the City Rent and Eviction Regulations define a "self-
contained family unit" as:
[A] housing accommodation with private access, containing
two or more rooms, consisting of at least one bedroom and
a living room/dining space area in addition to a
kitchen...a private bathroom...and at least one closet
plus an additional closet for each bedroom. Such
accommodation shall contain a minimum total area of 395
square feet, exclusive of the area of bathrooms and
closets....
Pursuant to the aforementioned rent regulation, the issuance of a decontrol
order by the rent agency is warranted when the conversion of the subject
building results in additional housing accommodations consisting of "self-
contained family units" which exceeds the total number of housing
accommodations that existed before the conversion of the subject building.
Based on the record in this proceeding, the Commissioner finds that prior to
the conversion of the subject building it contained eight housing
accommodations, and that none of them were a "self-contained family unit."
The Commissioner further finds, based on the record, that after the
conversion of the subject building it still contained eight housing
accommodations; but the conversion added at least one "self-contained family
unit" to the subject building.
As the subject building contained eight apartments both before and after the
conversion, and that the conversion of the subject building did not result in
the subject building containing more than eight "self-contained family
units," the Commissioner finds that the subject apartment does not qualify
for decontrol pursuant to Section 2200.9 of the City Rent and Eviction
Regulations.
The Commissioner takes note of the fact that the Administrative Law Judge and
the subject owner have a different interpretation of the above-mentioned rent
regulation. They both contend that a decontrol order would be warranted when
the conversion resulted in additional "self-contained family units" without
there being a necessity for additional housing accommodations. However, the
Commissioner is of the opinion that the above-mentioned interpretation of
the aforementioned rent regulation is contrary to the current policy of the
D.H.C.R. and the current interpretation of the courts (see,Boss v. Caputa, 9
A.D.2d 730, 192 N.Y.S.2d 237).
Accordingly, the Commissioner finds that the Administrator's order should be
revoked.
DOCKET NO.: GK420197RT
As to the subject owner's assertion that the subject apartment qualifies for
owner-occupancy decontrol, the Commissioner finds that that assertion is
without merit.
The Commissioner points out that the Administrative Law Judge determined that
the subject owner did not submit evidence showing when the alleged owner-
occupant became owner of the subject building. Furthermore, the
Administrative Law Judge determined that the subject owner did not submit
evidence showing that the alleged owner-occupant resided in the subject
apartment as owner of the subject building for one or more years, pursuant to
Section 2200.2(f)(11) of the City Rent and Eviction Regulations. In
addition, the Administrative Law Judge determined that the alleged owner-
occupant relinquished ownership in the subject building and vacated the
subject apartment on July 26, 1952. The Commissioner notes that an apartment
does not qualify for owner-occupancy decontrol, as in this proceeding, when
the owner vacates that apartment prior to April 1, 1953.
Accordingly, the Commissioner finds that the subject apartment does not
qualify for owner-occupancy decontrol.
As to the issue of "luxury decontrol," pursuant to Section 2200.2(f)(14)(i)
of the City Rent and Eviction Regulations, the Commissioner finds that that
issue should also be remanded to the Administrator for further processing.
The Commissioner points out that for the subject apartment to be eligible for
"luxury decontrol" it must meet the prerequisites set forth in Sections
2200.2(f)(14)(i), and 2203.2(c) of the above-mentioned regulations.
Pursuant to Section 2200.2(f)(14)(i) of the aforementioned regulation, in
order for an apartment to qualify for "luxury decontrol" the maximum rent
effective on April 1, 1960 must have been $250.00 per month or more.
In determining whether an apartment qualifies for "luxury decontrol,"
pursuant to the above-mentioned regulation, the Commissioner notes that the
determinative factor is the legal maximum collectible rent effective on April
1, 1960, and that it is not determined by the rent the landlord charged on
the above-mentioned date.
As the issue of the subject apartment's maximum rent is being remanded to the
Administrator, the Commissioner finds that the issue of whether the subject
apartment qualifies for "luxury decontrol" can not presently be determined.
Accordingly, the Commissioner finds that the issue as to whether the subject
apartment qualifies for "luxury decontrol" is to be remanded to the
Administrator for further processing.
If the Administrator should determine that the subject apartment's maximum
rent effective April 1, 1960 is less than $250.00 per month, the Commissioner
is of the opinion that the Administrator should find that the subject
apartment does not qualify for "luxury decontrol."
If the Administrator should determine that the subject apartment's maximum
rent effective April 1, 1960 is $250.00 per month or more, the Commissioner
is of the opinion that the Administrator should determine whether all of the
requisite conditions, pursuant to the applicable rent regulations, have been
DOCKET NO.: GK420197RT
followed to qualify the subject apartment for "luxury decontrol."
The Commissioner notes that the Administrative Law Judge, in his findings,
stated that the subject apartment did not qualify for "luxury decontrol" as
the requisite conditions, as set forth in Section 2203.2(c) of the City Rent
and Eviction Regulations, were not met.
If the Administrator should determine that the subject apartment qualifies
for "luxury decontrol," the Commissioner is of the opinion that the
Administrator should establish the subject apartment's legal regulated rent
pursuant to the Rent Stabilization Law and Code.
As to the tenant's assertion, in his petition, that the Administrative Law
Judge's findings should be reversed, the Commissioner points out that the
Administrative Law Judge's findings are not an order of the rent agency, but
are recommendations to guide the Administrator and/or the Commissioner in
resolving the issues raised in a proceeding.
Accordingly, the Commissioner finds that the subject tenant's petition should
be granted in part.
As the Commissioner has revoked the Administrator's order under review
herein, and that the subject apartment's legal rent is not known, the
Commissioner is of the opinion that the issue of establishing the subject
apartment's rental status and legal rent should be remanded to the
Administrator pursuant to Section 2202.22 of the City Rent and Eviction
Regulations.
The Commissioner is also of the opinion that in establishing the subject
apartment's maximum rent the Administrator should take note of the
aforementioned alterations done to the subject apartment.
As the Administrator's order under review herein is revoked, the Commissioner
finds that the subject apartment's rent should be $229.00 per month, as
established in Docket No. DF420173RO, until a new order is issued on remand.
THEREFORE, in accordance with the City Rent and Rehabilitation Law and the
Rent and Eviction Regulations, it is
ORDERED, that the subject tenant's petition be, and the same hereby is,
granted in part in accordance with this order and opinion, and that the
Administrator's order, issued under Docket No. EH420045RP, be, and the same
hereby is, revoked; and it is
FURTHER ORDERED, that this proceeding shall be remanded to the Administrator
for an administrative determination to establish the subject tenant's maximum
rent; and it is
FURTHER ORDERED, that if the facts so warrant, the Administrator shall
determine whether the subject apartment qualifies for "luxury decontrol"; and
it is
FURTHER ORDERED, that if the Administrator determines that the subject
apartment qualifies for "luxury decontrol," then the Administrator shall
establish the subject apartment's legal regulated rent; and it is
FURTHER ORDERED, that the subject apartment's interim rent shall be $229.00
per month, as set forth in Docket No. DF420173RO, until a new order is issued
DOCKET NO.: GK420197RT
on remand.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
|