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 ADMINISTRATIVE REVIEW
IN THE MATTER OF THE ADMINISTRATIVE DOCKET NO.: GC410231RT
APPEAL OF
LISA M. BOYD
RENT ADMINISTRATOR'S
PETITIONER DOCKET NO.: EL410048OM
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On March 20, 1992, the above-named petitioner-tenant timely filed
a Petition for Administrative Review (PAR) against an order issued
on February 27, 1992 by the Rent Administrator, (Gertz Plaza)
concerning the housing accommodations known as 590 Third Avenue,
Apartment 5D, New York, NY, wherein the Rent Administrator
determined that the owner was entitled to a rent increase based on
a major capital improvement (MCI).
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 December 13, 1990 by
initially filing an application for a major capital improvement
rent increase predicated on the installation of a new
boiler/burner, at the subject premises, at a total claimed cost of
$26,200.00. In support of his application, the owner submitted
copies of the permits, contracts, approvals and cancelled checks.
In answer to the owner's application, several tenants responded
objecting to the rent increase. They contended, in substance, that
the old boiler/burner was ineffective and broke down constantly;
and that it is the responsibility of the owner to provide heat and
hot water to the tenants. They, however, failed to identify any
pertinent reason why the rent increase should not be granted.
On February 27, 1992, the Rent Administrator issued the order here
under review finding that the installation of a new boiler/burner
qualified as a major capital improvement, determining that the
application complied with the relevant laws and regulations based
upon the supporting documentation submitted by the owner and
ADMIN. REVIEW DOCKET NO.: GC410231RT
allowing rent increases for both rent controlled and rent
stabilized apartments based upon an approved cost of $26,200.00.
In her petition for administrative review, the tenant contends, in
substance, that Section VII (2) of the Administrator's order states
that a vacancy lease must state a pending major capital improvement
application and list the items for which a major capital
improvement rent increase is sought; that her vacancy lease does
not state anything about a pending MCI; and that she had no idea
that an increase was pending. She also submitted a copy of said
lease to substantiate her claim.
In answer to the tenant's petition, the owner submitted a copy of
a letter sent to the tenant in which the owner stated that said
letter was to re-affirm its previous letter of April stating that
said tenant will not be charged any increase for the installation
of the new boiler/burner.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that this petition should be denied.
Rent increases for major capital improvements are authorized by
Section 2522.4 of the Rent Stabilization Code. Under rent
stabilization, the improvement must generally be building-wide;
depreciable under the Internal Revenue Code, other than for
ordinary repairs; be required for the operation, preservation, and
maintenance of the structure; and replace an item whose useful life
has expired.
The Commissioner notes that the replacement of a boiler/burner
qualifies as a major capital improvement for which an increase may
be warranted, providing the owner otherwise so qualifies. The
record indicates that the owner substantiated his application by
submitting copies of the permits, contracts, approvals and
cancelled checks. The record confirms that the owner correctly
complied with the applicable procedures for a major capital
improvement rent increase. The Commissioner further notes that on
appeal, the tenant does not allege any errors on which the Rent
Administrator's order was based, but rather asserts that the
collectibility of the increase as to the subject apartment is
affected by the specific terms or omissions in her vacancy lease.
The Commissioner notes that where the tenant took occupancy of the
apartment pursuant to a vacancy lease commencing after the owner
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ADMIN. REVIEW DOCKET NO.: GC410231RT
had filed its application, as is the case in the instant
proceeding, for the MCI increase, granted by the Administrator's
order to be collectible during the term of the tenant's vacancy
lease, such vacancy lease would have to contain a specific clause
advising the tenant of the pending proceeding and advising that the
rent charged was subject to an additional increase (during the
current lease term in effect) as provided by Section 2522.5 (d) (2)
of the Rent Stabilization Code and established Division precedent.
In the absence of same, and in accordance with Section 2522.4 (a)
(5), said increase is not collectible until the expiration of the
lease term in effect at the time of issuance of the MCI order,
providing that the renewal lease contains a general authorization
provision for adjustment of the rent reserved by the DHCR order.
This order and opinion is issued without prejudice to the tenant's
right to file a rent overcharge complaint if the owner has
collected any rent in excess of the lawful regulated amount.
THEREFORE, in accordance with the applicable provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this administrative appeal be, and the same hereby is
denied, and the Administrator's order be and the same hereby is
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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