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 NOS.:GE410276RT
APPEALS OF GC410359RT
LOUISE CUMMINGS and
AILEEN CHANCO RENT ADMINISTRATOR'S
PETITIONERS DOCKET NO.: EJ430161OM
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ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
The above-named tenants timely filed or refiled petitions for
administrative review (PAR's) against an order issued on February
12, 1992 by a Rent Administrator (Gertz Plaza) concerning the
housing accommodations known as 160, 162, 164 and 172 East 85
Street, New York, NY, various apartments, wherein the Rent
Administrator determined that the owner was entitled to a rent
increase based on various major capital improvements.
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 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 these administrative appeals.
The owner commenced this proceeding on October 10, 1990 by
initially filing an application for a rent increase predicated on
the installation of the following items:
ITEMS CLAIMED COST
1. Boiler/Burner $44,000.00
2. Asbestos Removal $ 8,343.00
3. Asbestos Air Monitor $ 1,650.00
4. Insulation $ 1,732.00
5. Filing Fee $ 800.00
TOTAL CLAIMED COST $56,525.00
In support of his application, the owner submitted copies of
contracts, permits, approvals and cancelled checks.
ADMIN. REVIEW DOCKET NOS.: GE410276RT et. al
Six tenants responded to the owner's application objecting to the
increase but failed to raise any complaints pertaining to the
installation. The petitioner-tenants herein, did not submit any
response to the application.
On February 12, 1992 the Rent Administrator issued the order here
under review finding that the installation of the boiler/burner
which services all four of the subject buildings and the removal of
asbestos qualified as major capital improvements, determining that
the application, as it relates to such items, complied with the
relevant laws and regulations based upon the supporting
documentation submitted by the owner and allowing rent increases
for both rent controlled and rent stabilized apartments based upon
the net approved cost of $52,343.00. Disallowed, by the
Administrator, was the total of $4,182.00 for filing fees, the
installation of an air monitor and the insulation of pipes since
these items did not qualify as major capital improvements.
In her petition under docket number GE410276RT, the tenant
contends, in substance, that the Rent Administrator's order states
160/172 East 85 Street as the building address and does not state
162 East 85 Street where said tenant resides; and that an increase
for the installation of the boiler/burner has already been granted.
In the petition under docket number GC410359RT, another tenant
contends, in substance, that she signed a vacancy lease on January
2, 1992 at a rental of $1,000.00 per month; that at the time of the
signing of said lease, the tenant was not notified, in writing or
verbally, that an increase for a major capital improvement was
pending before the Division; that according to the Rent
Stabilization Lease Rider, the last registered rent was above the
rent said tenant was asked to pay; that if there were such a
pressing need for a higher rent it is not at all understandable why
the rent was offered to said tenant below the presently allowable
rate; and that the order states 160/172 East 85 Street, and not 162
East 85 Street, as being the buildings required to pay the rent
increase.
In response to the petition under docket number GE410276RT, the
owner's representative contended, in substance, that the objections
made by the tenant are groundless; that the owner is entitled to an
increase for major capital improvements which upgrade the entire
building; that the installation of a boiler/burner comprises a
major capital improvement; that the rent increase was correctly
ADMIN. REVIEW DOCKET NOS.: GE410276RT et. al
granted by the DHCR in accordance with the Rent Stabilization Code;
that the owner is not aware of any previous orders granting an
increase for a boiler/burner installation and the removal of
asbestos to which the tenant refers; that the tenant is the only
complaining tenant out of eighty-nine tenants in the building; that
the tenant has erroneously appealed a DHCR decision which was
rightfully based on the regulations governing major capital
improvement rent increases; and that the owner has sent an
affidavit swearing that prior to the purchasing of the building,
the owner had checked the records and had found that no rent
increase was ever granted for the installation of boiler/burner or
for the removal of asbestos.
With regard to the allegations made by the tenant under docket
number GC410359RT, the owner's representative contends, in
substance, that the tenant's objections are groundless since the
tenant was never billed for any major capital improvement rent
increase; that the tenant commenced her tenancy on January 15, 1992
at a rental of $1,000.00 per month, which was less than the
regulated rent and vacated the premises on January 31, 1993; and
that the tenant was never billed more than the $1,000.00 per month
during her tenancy. In order to support this claim, a copy of the
rental ledger, showing the amount paid each month by the
petitioner-tenant was submitted.
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 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 Commissioner notes that the installation of a new boiler/burner
ADMIN. REVIEW DOCKET NOS.: GE410276RT et. al
and the removal of asbestos, done in conjunction with the
installation of the boiler/burner, qualify as major capital
improvements for which an increase may be warranted, providing the
owner otherwise so qualifies. The record indicates that the owner
substantiated its application by submitting copies of the
contracts, permits, 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 tenants do not
allege any errors on which the Administrator's order was based but
merely assert that the rent increase is only applicable for
buildings 160 and 172 East 85 Street and not 162 East 85 Street;
that an increase for boiler/burner installation was already granted
at some unspecified time in the past; and that the tenant, under
docket number GC410359RT was never informed of a pending major
capital improvement application and, therefore, should not be made
to pay the said increase.
With regard to the allegation made by the tenants that their
building address was not included among those required to pay the
increase by the order, the Commissioner finds that the said order
stated 160/172 East 85 Street since that was the entry made in the
computer system in use but that the said address also includes the
other buildings, namely 162 and 164 East 85 Street, with street
addresses between 160 and 172 East 85 Street. The Commissioner
further notes that the application submitted by the owner
specifically states the subject buildings as 160, 162, 164, and 172
East 85 Street and that the tenants were each served with a copy of
said application.
A check of the Division's records reveals that no rent increase was
ever granted for the installation of a new boiler/burner or for the
removal of asbestos, contrary to the claim made by the tenant under
docket number GE410276RT.
With regard to the issue raised by the tenant under docket number
GC410359RT, namely that she was never informed of a pending major
capital improvement application, upon the signing of the vacancy
lease, the Commissioner notes that where the tenant took occupancy
of the apartment pursuant to a vacancy lease commencing after the
owner had filed its application, as is the case in the instant
proceeding, for the MCI increase to be collectible during the term
ADMIN. REVIEW DOCKET NOS.: GE410276RT et. al
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 the renewal lease
contains a general authorization provision for adjustment of the
rent reserved by the DHCR order. However, the Commissioner finds
that this tenant was not charged the increase granted by this order
and that her rent remained at $1,000.00 during her entire tenancy.
THEREFORE, in accordance with the Rent Stabilization Code, and the
Rent and Eviction Regulations for New York City, it is
ORDERED, that these administrative appeals 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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