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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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. GC410188RO
: DRO DOCKET NO. ZAJ410450R
LENOX HILL APARTMENTS INC. TENANT: Paula Bennett
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On March 20, 1992, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
March 6, 1992, by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York, concerning the housing accommodations known as
331 East 71 Street, New York, NY, apt. 3C, wherein the Rent
Administrator determined the fair market rent.
Subsequent thereto, a proceeding pursuant to Article 78 of the
Civil Practice Law and Rules in the nature of mandamus was
instituted in the Supreme Court, New York County and the court
issued an order remitting the proceeding to the DHCR for an
expeditious determination.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2522.3 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order was
warranted.
The Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion of the record relevant to
the issue raised by the administrative appeal.
This proceeding was commenced on October 27, 1986 by the
tenant's filing a rent overcharge complaint in which she questioned
the fair market rent . The tenant stated that she had taken
occupancy of the subject premises on August 1,1986 pursuant to a one
year lease at a monthly rental of $1200.00. The tenant further
stated that she believed the rent of the prior tenant had been
approximately $300.00. In such complaint the tenant listed the
owner as Lenox Hill Apartments, Inc.
In response to the complaint, the owner's managingagent stated
that the complainant was the first rent stabilized tenant of the
subject apartment, that the apartment had been rented to the tenant
at a rent lower than was permissible as an accommodation, and that
the owner had made various improvements at a cost of $3,779.48 while
the apartment was vacant. The owner submitted invoices and
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cancelled checks to substantiate the claimed improvements increase
and copies of the DC-2,the apartment registration,and the Landlord's
Report of Statutory Decontrol. The owner also submitted various
apartments to be used in the comparability study.
In Order Number ZAJ410450R, the Rent Administrator adjusted the
initial legal regulated rent by establishing a fair market rent of
$871.15 effective August 1, 1986, the commencement date of the
initial rent stabilized lease. The fair market rent was determined
on the basis of the special fair market rent guideline and the
comparability study. In addition, the Rent Administrator determined
that the tenant had paid excess rent of $ 11,177.13 through April
30, 1989, and directed the owner to refund such excess rent to the
tenant.
In this petition, the owner alleges in substance that
the Rent Administrator's order is incorrect: 1) the Rent
Administrator erred in computing the Fair Market Rent by failing to
use the 1986 MBR, by omitting from the comparability study
apartment 2B in the subject premises, the mirror image of the
subject apartment and by miscomputing the comparability rents; 2)
the Rent Administrator failed to include an increase for custom
built storm windows which were ordered before the tenant moved in
and installed after the tenant took occupancy; 3) the Administrator
should have included an increase for the installation of a new sink
and cabinet; 4) consideration should have been given to the fact
that the rent charged was a negotiated rent fully agreed to by the
tenant; 5) the tenant broke the lease and the owner should be
reimbursed for damages; and 6) finally, the owner contends that the
entire proceeding is defective as it names the wrong party as owner
and that due to this defect the tenant's complaint should have been
dismissed as untimely.
In answer to the appeal, the tenant contends that the Rent
Administrator's order is correct: 1) there is no evidence that
apartment 2B is a mirror image; 2) the tenant never consented to
the installation of storm windows; 3) the tenant enabled the owner
to receive higher rent in two apartments, the one she moved from as
well as the subject apartment; 4) the tenant vacated the subject
apartment with the consent of the owner who re-rented it but has not
returned the security deposit; 5) there is no proof that a new
sink and cabinet were installed; and, 6) the order names the
managing agent as owner but the complaint was filed against the
petitioner.
The Commissioner is of the opinion that this petition should be
denied.
Pursuant to Section 2522.3(e) of the Rent Stabilization Code,
applicable to fair market rent appeals filed after April 1, 1984,
comparability will be determined based on the following:
(1) Legal regulated rents, for which the time to file a Fair Market
Rent Appeal has expired and no Fair Market Rent Appeal is then
pending, or the Fair Market Rent Appeal has been finally determined,
charged pursuant to a lease commencing within a four year period
prior to, or a one year period subsequent to, the commencement date
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of the initial lease for the housing accommodation involved; and
(2) At the owner's option, market rents in effect for other
comparable housing accommodations on the date of the initial lease
for the housing accommodations involved.
The Commissioner finds that the Administrator computed the Fair
Market Rent correctly. Review of the record reveals that the
instant fair market rent was determined on the basis of the 1984
Maximum Base Rent plus the 1986 fuel cost adjustment increased by a
special Fair Market Rent Guidelines and the comparability study plus
1/40th of the total cost of substantiated improvements. When the
subject apartment was decontrolled, Special Guidelines Order Number
17 which required that the 1984 Maximum Base Rent be used in
computing fair market rents for apartments vacancy decontrolled
between October 1, 1985 and September 30, 1986 was in effect.
Accordingly, the Commissioner finds that the Administrator used the
appropriate Maximum Base Rent.
Of the apartments submitted for comparability, the
Administrator correctly determined that only apartments 3A and 2B at
330 E.71 Street qualified for the study. Apartment 2B at 331 East
71 Street was ineligible for inclusion in the comparability study
since it was vacancy decontrolled and rented to the first rent
stabilized tenant in 1981 whereas the subject apartment was rented
to the first stabilized tenant in 1986. Therefore, apartment 2B in
the subject premises was not rented to the first rent stabilized
tenant within a four year period prior to or a one year period
subsequent to the commencement of the initial lease for the subject
apartment and therefore cannot be used as a comparable pursuant to
Code Section 2522.3(e). The Administrator used appropriate
percentages to update the rents of the comparable apartments.
With respect to the the increase permitted for improvements,
the Administrator correctly disallowed an increase for the
installation of storm windows. Section 2522.4(a) permits an owner to
take a rent increase of 1/40th the cost of improvements provided in
or to the tenant's housing accommodation on written tenant consent
to the rent increase. In the case of vacant housing accommodations,
tenant consent is not required. There is nothing in the record to
support the owner's contention that the replacement windows were
ordered when the tenant took occupancy. Since the installation was
effected after the tenant took occupancy, tenant consent was
required and there was no tenant consent so that the increase was
not warranted. Moreover,if, in fact, the owner did install new
windows twice, once in 1986 after the tenant took occupancy, and
then again as part of the building wide installation, the owner
would be entitled to only one rent increase. The Commissioner
notes that the owner was granted a Major Capital Improvements (MCI)
rent increase for replacement windows effective October 1, 1987.
Therefore, the Administrator did not err in denying an individual
apartment improvement rent increase based on the cost of new
windows.
The owner did not submit appropriate substantiating
documentation for an increase based on the installation of a new
sink and cabinet. Therefore, the Administrator was correct in not
permitting an increase for these items.
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Legal stabilized rents are those rents permitted pursuant to
the Rent Stabilization Law and Code. The tenant is not bound by a
negotiated rent which exceeds the permissible rent.
The evidence of record indicates that the complainant vacated
the subject apartment in 1989. The refund ordered encompasses only
the tenancy period. Accordingly, the owner's claim for
reimbursement for damages caused by the tenant's vacating is more
properly brought in a court of competent jurisdiction.
The tenant's complaint which was filed against the petitioner
as owner of the subject building was answered by the owner's
managing agent who is considered an owner pursuant to Section
2520.6(i) of the Rent Stabilization Code. Accordingly, the order as
issued is not defective.
The owner is directed to roll back the rent to the lawful
stabilized rent consistent with this decision and to refund the
excess rent collected by the owner.
In the event the owner does not take appropriate action to
comply within sixty (60) days from the date of issuance of this
order, the tenant herein may seek to enforce this order by filing an
appropriate action in a court of competent jurisdiction. A copy of
this order is being sent to the tenant currently in occupancy at the
subject apartment.
The owner is directed to reflect the findings and
determinations made in this order on all future registration
statements, including those for the current year if not already
filed, citing this order as the basis for the change. Registration
statements already on file, however, should not be amended to
reflect the findings and determinations made in this order. The
owner is further directed to adjust subsequent rents to an amount no
greater than that determined by this order plus any lawful
increases.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be, and
the same hereby is, denied, and, that the order of the Rent
Administrator be, and the same hereby is, affirmed.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
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