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 : ADMINISTRATIVE REVIEW
APPEALS OF DOCKET NOS.:
: GD610409-RT/ GD610432-RT
VARIOUS TENANTS OF 185 McCLELLAN GD610429-RT/ GD610405-RT
STREET GD610410-RT/ GD610368-RT
PETITIONERS : GD610400-RT/ GD610406-RT
------------------------------------X GD610428-RT/ GD610402-RT
GD610407-RT/ GD610430-RT
GD610403-RT/ GD610408-RT
GD610431-RT/ GD610404-RT
RENT ADMINISTRATOR'S
DOCKET NO.: EH 630001-OM
ORDER AND OPINION REMANDING PROCEEDING ON APPEAL
The above-named petitioners-tenants timely filed petitions for
Administrative Review against an order issued on March 27, 1992 by the Rent
Administrator (Gertz Plaza), concerning housing accommodations known as 185
McClellan Street, various apartments, Bronx, New York, wherein the
Administrator determined that the owner was entitled to a rent increase
based on a major capital improvement.
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 administrative appeals.
The 185 McClellan Street Tenants Association and, individually, the tenants
of fifteen apartments filed the within administrative appeals against the
Administrator's order. These appeals are consolidated herein for a uniform
determination in this proceeding as they involve common issues of law and
fact.
The owner commenced the proceeding below on August 2, 1990 by filing an
application to increase the rents ofstabilized and controlled apartments
for the "repiping" of the subject premises at a total claimed cost of
$319,000.00. Various tenants objected thereto, three of who alleged
clogged drains and water leaks. The president of the tenants' association
requested an extension to respond to the application but no further
response was received.
On March 27, 1992 the Administrator issued the order appealed herein
authorizing a rent increase for the work in question. The increase was
suspended as to one apartment based upon the report of a physical
inspection.
In their petitions for administrative review the tenants request reversal
or modifications of the Rent Administrator's order alleging inter alia,
that the plumbing is defective; that as a result many apartments have water
leaks in the walls and ceilings, and consequently the walls have
ADMIN. REVIEW DOCKT NO.: GD 610404-RT, et.al.
deteriorated; that on numerous occasions there have been serveral floods in
the lobby; that the pipelines openings were not properly sealed and
insulated; and that as a result, rodents have invaded their apartments and
the public areas through the openings. The tenants further allege that
many of them were not served with a coy of the owner's MCI application; and
that the owner was previously granted MCI rent increases for various items
including repiping (Docket No. AG 630115-OM). The tenant of apartment 3N
alleges, in substance, that no repairs have been effectuated in that
apartment. The tenant of apartment 5D states, in substance, that he became
a tenant on January 31, 1991; and that he was unaware of the owner's
pending MCI application. Also, various tenants have complained of water
backups and clogged drains in sinks and toilets in their individual
apartments.
In response to the tenants' petitions, the owner filed answers' stating, in
substance, that the repiping installation was performed in a workmanlike
manner; that the installation has significantly reduced the frequency of
plumbing problems; that the pipes are not defective; that the lobby has not
been flooded; and that it had complied with all the requirements for the
MCI rent increase.
After careful consideration of the entire record, the Commissioner is of
the opinion that this proceeding should be remanded to the Rent
Administrator for further appropriate processing in accordance with this
order and opinion.
At the outset the Commissioner notes that the proceeding under Docket No.
AG 630115-OM differed from that of the herein repiping installation. The
record indicates the owner had applied for a rent increase adjustment based
on the installation of various items including new piping for the existing
boiler/burner. The Administrator disallowed the claimed cost ($5,800.00)
for that installation since said work was not done in conjunction with the
the new heating system.
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. Piecemeal work or ordinary
repairs and maintenance does not constitute work for which a rent increase
adjustment is warranted under current and past procedures.
It is the established position of the Division that the installation of new
plumbing on a building-wide basis including new branches and fixtures
constitutes a major capital improvement for which a rent increase
adjustment may be warranted.
ADMIN. REVIEW DOCKT NO.: GD 610404-RT, et.al.
A review of the record in the proceeding below discloses that the owner
submitted to the Administrator in support of its application various
documentation, including copies of a contract detailing the work to be
performed, contractor's certification, and cancelled checks for the work in
question.
In regard to the various objections raised by the tenants during the course
of the Rent Administrator's proceeding the Commissioner notes that only
three tenants (Apt. Nos. 2E, 3B and 3N) complained about problems with the
plumbing prior to the issuance of the order under review. However, an
inspection was conducted of only one (Apt. No. 2E) of the three apartments
and the inspector found problems existed in that unit.
As to the other two tenants (Apt. Nos. 3B and 3N) who alleged plumbing
defects and whose apartments were not inspected, the Commissioner is of the
opinion that the Administrator failed to properly address their complaints
and thus, the Commissioner deems it appropriate to remand these proceedings
for further processing, including an inspection to ascertain whether all
plumbing problems and defects in the apartments hereinabove-cited have been
corrected.
The Commissioner notes that although other tenants are complaining about
various problems with the repiping installation, they failed to raise their
complaints during the course of the proceeding below and thus their
complaints may not, pursuant to Section 2529.6 of the Code, be considered
at the administrative level. However, the serious nature of the tenants'
persuasive allegations and the possibility of a persistent condition at the
subject premises consisting of water leaks and deterioration of walls and
ceilings in the public areas, if proven, could constitute an immediately
hazardous condition, putting at risk all of the tenants. Thus, the
Commissioner directs the Administrator's attention to an examination of
these complaints, including consideration of an inquiry into the source of
the alleged water damage, the extent to which it has impaired the
structural integrity of the subject building and whether or not, after
making said inquiry, the Administrator should revoke the appealed order.
As to those service items which the tenants have complained of in this
proceeding but as to which the Administrator's attention has not been
directed on remand, this order and opinion is issued without prejudice to
the tenants' filing applications with the Division for rent reductions
based on a decrease in services, if the facts so warrant.
Regarding the tenant's assertion (apartment 5E), that he was unaware of the
owner's pending MCI application the Commissioner notes that for the MCI
rent increase granted by the Administrator's order appealed herein to be
collectible during the term of the petitioner-tenant's vacancy lease, said
lease would have to contain a specific clause advising the tenant that the
ADMIN. REVIEW DOCKT NO.: GD 610404-RT, et.al.
rent charged was subject to additional increase during the current lease
term in effect as provided by the Code and established Division procedures.
In the absence of same, said rent increase is not collectible until the
expiration of the lease term in effect at the time of issuance (March 27,
1992) of the MCI order. The record, as amplified on appeal, including a
rider, signed by the tenant, specifically advising the tenant of the
pending docket number; and that the rent charged was subject to an
additional rent increase for repiping installation, when granted by the
Division.
THEREFORE, in accordance with the Rent Stabilization Law and Code, and the
Rent and Eviction Regulations, it is
ORDERED, that these petitions be and the same hereby are granted to the
extent of remanding these proceedings to the Rent Administrator for further
processing in accordance with this order and opinion. The automatic stay
of so much of the Administrator's order as directed a retroactive rent
increase is hereby continued until a new order is issued upon remand.
However, the Administrator's determination as to a prospective rent
increase is not stayed and shall remain in effect until the Administrator
issues a new order upon remand.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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