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 DOCKET NOS.:
APPEALS OF GD410038RT/GD410076RT
VARIOUS TENANTS OF GD410162RT/GD410163RT
400 EAST 55TH STREET GD410165RT/GD410166RT
NEW YORK, NEW YORK GD410171RT/GD410224RT
GD410225RT/GD410276RT
GD410292RT,
RENT ADMINISTRATOR'S
PETITIONERS DOCKET NO.: EJ410178OM
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ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
Various tenants timely filed petitions for administrative review
(PARs) against an order issued on March 19, 1992 by the Rent
Administrator (Gertz Plaza) concerning the housing accommodations
known as 400 East 55th Street, New York, New York, various
apartments, wherein the Rent Administrator determined that the
owner was entitled to a rent increase based on major capital
improvements (MCI). The subject apartments are all rent stabilized.
The Commissioner deems it appropriate to consolidate these
petitions for disposition since they pertain to the same order and
involve common issues of law and fact.
The owner commenced this proceeding on October 12, 1990 by filing
an application for an MCI rent increase predicated on the
installations of new apartment windows, pointing/waterproofing,
parapet and a new roof.
The order of the Rent Administrator, appealed herein, granted in
part, the owner's application and authorized rent increases for the
rent stabilized apartments base upon total approved costs of
$450,788.78. Said order contains the notations that in response to
the owner's application two tenants complained of defective windows
and water seepage; that the owner was notified of the tenants'
complaints and responded that all necessary repairs had been made;
and that subsequent notices mailed to tenants on January 21, 1992
elicited no further responses.
ADMIN. REVIEW DOCKET NOS. GD410038RT ET AL
In their petitions for administrative review, the tenants request
reversal of the Administrator's order and contend, in substance,
that the Administrator's order in granting MCI rent increases was
arbitrary and capricious since no tenant in the premises received
the notice allegedly mailed on January 21, 1992; that the owner
failed to maintain services in the subject premises and should not
be rewarded; that the cost of windows is excessive and should be
disputed because it includes monies paid to the company that
erected the scaffolding; that pointing/waterproofing and parapets
are not major capital improvements but the result of failing to
properly maintain the premises; and that the tenant in apartment
10H took occupancy in July 1991 and should not be responsible for
the retroactive payment.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that these petitions should be
denied.
Rent increases for major capital improvements are authorized by
Section 2522.4 of the Rent Stabilization Code for rent stabilized
apartments. 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 was expired. The installations involved herein,
to replace old items the useful lives of which have expired, meet
the definitional requirements of major capital improvements.
Regarding the tenants' contention that none of the tenants received
the notice mailed on January 21, 1992, a review of the record
discloses that said notice was mailed to the tenants in apartments
8H and 18C; that these two tenants are the only ones who complained
about the adequacy of the installation; that they did not respond
to the Division's subsequent inquiry; and that they are not
petitioners herein.
With respect to the tenants' allegation that the owner failed to
maintain services in the subject premises, the Commissioner notes
that there are no rent reduction orders based on the owner's
failure to maintain services of a building-wide nature outstanding
against the subject premises nor have any service complaints by the
tenants been sustained either prior to or subsequent to the
issuance of the order appealed herein. The determination herein is
without prejudice to the rights of the tenants filing an
application with the Division for a rent reduction based upon a
decrease in services, if the facts so warrant.
ADMIN. REVIEW DOCKET NO. GD410038RT ET AT
As to the tenants' contention relating to the cost of the windows,
the record in the instant case, which includes copies of various
proposals, invoices, contractors' certifications and cancelled
checks, indicates that the owner correctly complied with the
applicable procedures for a major capital improvement and
substantiated its allowable costs to the extent recognized by the
administrator and that such costs did not include the cost of
bridging.
Where, as in the instant case, the tenant in apartment 10H took
occupancy pursuant to a vacancy lease commencing after the owner
had filed its application, the Commissioner notes that for the MCI
increase granted by the Administrator's order to be collectible
during the term of the petitioner's vacancy lease, such vacancy
lease would have to contain a specific clause advising the tenant
of the docket number of the pending proceeding and advising that
the rent charged was subject to 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 was not collectible until the expiration of
the lease term in effect at the time of issuance of the MCI order,
and on a prospective basis, provided 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 right of the tenant to file a rent overcharge
complaint with the Division, if the owner has collected rent in
excess of the lawful regulated amount.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is,
ORDERED, that these petitions be, and the same hereby are, denied;
and that the Rent Administrator's order be, and the same hereby is,
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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