STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
-------------------------------------X SJR No. 7133
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: GB630282RO
NEW STAR REALTY
DOCKET NO.: FG630008RK
ORDER AND OPINION GRANTING IN PART PETITION FOR ADMINISTRATIVE
On February 12, 1992, the above named petitioner-owner timely filed
a petition for administrative review (PAR) against an order (Docket
No. FG630008RK) issued on January 27, 1992, by a Rent Administrator
(Gertz Plaza) concerning the housing accommodations known as 1371
Virginia Avenue, Bronx, New York, various apartments, wherein the
Rent Administrator affirmed an order under Docket No. CG630069OM
that granted, in part, the owner's MCI application by authorizing
an increase for rent controlled apartments and determined that the
owner was not entitled to a rent increase for rent stabilized
apartments upon finding that the owner resubmitted an amended
application more than two years from the completion date of the MCI
Subsequent thereto the owner filed a petition in the Supreme Court
pursuant to Article 78 of the Civil Practice Law and Rules seeking
an order of mandamus. This resulted in a court ordered stipulation
remitting the proceeding for a determination of the owner's
administrative appeal herein.
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 this administrative appeal.
The owner commenced this proceeding on June 27, 1988 by initially
filing an application for a rent increase based on the installation
of the following items at a total cost of $36,875.00: windows
building wide, a boiler/burner and a new roof.
On January 3, 1989 the owner submitted to the Division a list of
the MCI installations included in his application and supporting
documentation. The letter listed documentation submitted for
"heating" including proof of payment of $25,200.00 and $3,145.00
for an entrance door.
On March 7, 1991 the Rent Administrator noted in a Request for
Additional Information that the owner's application reflected a
claimed cost for the boiler/burner of $3,145.00; that the
supplement forms indicated a claimed cost of $25,200.00; and that
the application did not include the item entrance doors while the
supplement includes this item at a claimed cost of $3,145.00.
ADMIN. REVIEW DOCKET NO. GB630282RO
On March 12, 1991 the owner advised the Rent Administrator of
omissions from his application, and noted that all backup
documentation had been submitted. The owner submitted "an amended
RA-79 form ... with the revised figures." The amended application
raised the claimed cost for the MCI installations to $62,075.00.
On March 20, 1991 the Rent Administrator re-served the tenants the
owner's completed application with the revised figures and with the
addition of the entrance door.
Various tenants objected to the owner's application, alleging, in
substance, that the heat and hot water are inadequate at times;
that there are leaks in the roof; that the door is difficult to
open; that a second vestibule door is necessary; that the intercom
system is not connected to the door; that the rent increase should
not be permanent; and that the electrical and plumbing systems are
On April 26, 1991, the Rent Administrator issued an order granting,
in part, the owner's MCI application authorizing an increase for
rent controlled apartments, effective June 1, 1991 based upon a
total approved cost of $62,075.00 upon finding that the windows,
boiler/burner, roof and entrance door installations qualified as
MCIs. The installations were disallowed by the Rent Administrator
as to the stabilized apartments upon finding that the owner failed
to resubmit the amended application within two years from the
completion date of the installation of said items, in violation of
Section 2522.4(a)(8) of the Rent Stabilization Code.
The owner requested in a letter dated April 30, 1991 a
reconsideration of the order and the Rent Administrator reopened
the proceeding on July 5, 1991 under Docket No. FG630008RK.
Various tenants responded to the reopening of the proceeding
stating, in substance, that the increase would be a financial
hardship, that the electrical and plumbing systems are antiquated,
and that the door and heat and hot water are inadequate at times.
On January 27, 1992 the Rent Administrator issued the order
appealed herein, noting that a review of the record disclosed that
the owner, in a letter dated March 12, 1991, re-submitted an
amended application (RA-79) with revised figures and an
installation that was omitted from the previous filing; that the
owner's application was given a new filing date of March 18, 1991;
and that the tenants were re-served. The Rent Administrator
affirmed the order issued April 26, 1991 under docket number
CG630069OM and issued a superseding order (Docket No.
ADMIN. REVIEW DOCKET NO. GB630282RO
On February 12, 1992 the owner filed a petition contending, in
substance, that the owner timely filed his application on June 29,
1988 and did not file a new application on March 18, 1991; that the
owner only corrected a typographical error on the RA-79 form; that
the Rent Administrator continued processing the original
application by processing the J-51 information; that the new
application was not assigned a new docket number; that the
supplements to the original application included the correct data;
that the owner sent a letter on January 3, 1989 correctly listing
the application data; that the owner was not given notice of the
Rent Administrator's decision that it considered the owner's answer
to the Request for Information a new application; and if the
submitted RA-79 is a new application then only the doors should be
considered a new item since the other three installations were
included on the application (RA-79).
One tenant responded, stating in substance, that the heat and hot
water are inadequate at times; that the boiler needs repairs on an
ongoing basis; that a second vestibule door is necessary; and that
the electrical and plumbing systems are antiquated.
After careful consideration of the entire record, the Commissioner
is of the opinion that this petition should be granted in part.
The evidence of the instant case indicates that the owner timely
filed an incomplete application for a MCI rent increase on June 29,
1988 and submitted to the Division supporting documentation on
January 8, 1989. The Commissioner finds that under the
circumstances of this case that the corrections made pursuant to a
letter dated March 12, 1991, which the owner alleges was in answer
to a Request for Additional Information sent from the Rent
Administrator on March 8, 1991, was not a new application but
rather clarifying or supplemental information reconciling the
information on the application (RA-79) with the supporting
documentation. The record further shows that upon receipt of the
"amended application (RA-79)", the Rent Administrator served the
tenants on March 20, 1991 with the complete application which
included an additional $25,200.00 in MCI costs and the addition of
an entrance door. (The Commissioner notes that the owner had ample
opportunity prior to the Rent Administrator's request to submit a
corrected RA-79 form).
The completion dates of the installations (windows, May 1988;
boiler/burner, March 1988; roof, December 1987; and door, March
1988) as indicated on the contractors' certifications, which were
submitted with the original application, are undisputed and are
supported by the cancelled checks. Therefore, the Commissioner
finds that the owner did file the application albeit incomplete
within two years after the completion of the installations.
ADMIN. REVIEW DOCKET NO. GB630282RO
Rent increases for major capital improvements are authorized by
Section 2202.4 of the Rent and Eviction Regulations for rent
controlled apartments and Section 2522.4 of the Rent Stabilization
Code for rent stabilized apartments. Under rent control, an
increase is warranted where there has been since July 1, 1970, a
major capital improvement required for the operation, preservation,
or maintenance of the structure. 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
installations involved herein all qualify as MCIs.
Furthermore, the record discloses that the owner substantiated its
application in the proceeding below by submitting to the
Administrator documentation in support of the application,
including the contractors' certifications, copies of proposals,
invoices, cancelled checks, and the necessary governmental
approvals for the work in question.
The Commissioner is of the opinion and finds in this instant case
that the owner is entitled to a rent increase of $11.25 per room,
per month with respect to stabilized apartments effective as of May
1, 1991, the first rent payment date 30 days after completion of
the filing by service of the completed application on the tenants.
The rent increase of $11.25 per room, per month for rent stabilized
tenants is arrived at as follows:
1. Approved MCI cost $ 62,075.00
roof and entrance door)
2. Amortization by 60 months $ 1,034.58
(Line 3 ö 60)
3. Total number of Rent Stabilized and 92
rent controlled rooms
4. Rent increase per room per month $ 11.25
(line 2 ö line 3)
Furthermore, based upon the foregoing, with respect to the rent
stabilized apartments, the Commissioner has determined that the
lawful retroactive rent increase to be the following:
11.25 (rent increase) X 34 months = 382.50 per room.
In accordance with applicable provisions of the Rent Stabilization
Law and Code, collection of the rent increase is limited to and
shall not exceed 6% of the rent charged on the June 1, 1988 rent
roll date in any 12 month period with a similar limitation on the
collection of temporary arrears, with any overage collectible in
succeeding years subject to the same limitation on collectibillity.
ADMIN. REVIEW DOCKET NO. GB630282RO
The Commissioner notes that in regards to rent controlled tenants,
the Rent Administrator correctly allocated a J-51 tax abatement
offset of $2.57 which resulted in a rent increase for rent
controlled tenants of $8.68 per room, per month. ($11.25 - 2.57
= $8.68). No offset is due to rent stabilized tenants in as much
as the installations were commenced prior to June 28, 1988.
A tenant who has a valid Senior Citizen Rent Increase Exemption
Order (SCRIE) is exempted from that portion of the increase which
would cause the rent to exceed one-third of the tenant's household
monthly disposable income. A tenant who may be entitled to this
benefit may contact the New York City Department of the Aging by
calling (212) 240-7000.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
and the New York City Rent and Eviction Regulations, it is
ORDERED, that this petition be, and the same hereby is, granted;
that the Administrator's order be, and the same hereby is, modified
to grant a rent increase of $11.25 per room, per month with respect
to stabilized apartments with an effective date of May 1, 1991 for
reasons hereinabove provided subject to the conditions of
collectibility. The order and determination of the Rent
Administrator is hereby affirmed in all other respects.
Joseph A. D'Agosta