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 SJR No. 6635A
IN THE MATTER OF THE ADMINISTRATIVE
APPEAL OF ADMINISTRATIVE REVIEW
LMC ASSOCIATES DOCKET NO.: HA530009RO
RENT ADMINISTRATOR'S
PETITIONER DOCKET No.: FE530026RK
-------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On December 31, 1992 the above named petitioner-owner timely
refiled a petition for administrative review (PAR) against an order
issued on September 21, 1992, by the Rent Administrator, 92-31
Union Hall Street, Jamaica, New York, concerning the housing
accommodations known as 29-45 Sickles Street, New York, New York,
various apartments.
Subsequent thereto, the owner filed a petition in the Supreme Court
pursuant to Article 78 of the Civil Practice Law and Rules seeking
an expeditious review of its PAR. This resulted in a decision of
the court remitting this proceeding to the Division for a
determination of the owner's PAR.
The owner commenced this proceeding below by filing in August of
1988 an application for a rent increase based on the installation
of major capital improvements (MCIs), to wit: thermal windows;
boiler/burner; computer heating system; roof; pointing; and a water
pump at a total claimed cost of $223,675.00.
Forty-eight tenants responded to the application complaining of
defective windows, roof leaks and inadequate hot water. On March 5,
1990, the Division directed the owner to respond to the tenants'
complaints and to submit proof of repairs. The owner responded by
stating, in substance, that all of the new windows were caulked
inside and out; the hot water service was adequate; and the roof
was in satisfactory condition with no leaks occurring since its
installation.
ADMIN. REVIEW DOCKET NO. HA-530009-RO
An inspection was performed by the Division on April 24 and 25 of
1990 with the following findings: 1) hot water was being provided
to the apartments; 2) there was evidence of leaks on the ceiling
and/or walls of the following apartments - 3G, 3Q, 4L, 5A, 5C, 5D,
5J, 5Q and 5R; and 3) that problems existed with some of the
windows in the following apartments: FF, 2B, 2D, 2F, 2T, 4A, 4M,
5A, 5C and 5N.
In Docket Number CH530099OM issued May 30, 1990, the Rent
Administrator granted in part the owner's MCI application,
approving a rent increase for the boiler and the windows (excluding
capping of hallway windows and child guards), and denying a rent
increase for the water pump and fuel computer as work which did not
qualify as MCIs. The Administrator also denied a rent increase for
the pointing work found to be inadequate; and for the roof
insulation, resurfacing and vents because a 3 ply roof was not
installed. Finally, the Administrator exempted ten apartments (FF,
2B, 2D, 2F, 2T, 4A, 4M, 5A, 5C and 5N) from the window portion of
the rent increase.
On June 28, 1990, the owner filed a PAR (albeit on two separate
forms), Docket No. EF530157RO, against the Administrator's order
stating in substance, that the roof installation constituted an
MCI, and that the windows of the exempted apartments had been
repaired.
In a letter dated April 29, 1991, the owner requested
reconsideration of the denial of an MCI increase for the roof
installation.
On May 29, 1991, the Rent Administrator reopened the proceeding and
proposed to reconsider his earlier order (CH530099OM).
On April 28, 1992 the owner's PAR, Docket No. EF530157RO, was
dismissed as moot because of the reopening of the underlying
proceeding. During the reopened proceeding, several tenants
continued to complain of recurring leaks and water damage.
On July 31 and August 12, 1992 inspections disclosed evidence of
leaks in the living room and kitchen ceilings of apartment 5E and
evidence of water stains and peeling paint and plaster in apartment
5J.
ADMIN. REVIEW DOCKET NO. HA-530009-RO
On September 21, 1992, under Docket Number FE530026RK, the Rent
Administrator reconsidered the record and found that the order
issued on May 30, 1990, under Docket No. CH530099OM, should be
affirmed. Upon reconsideration, it was determined that the roof
installation was not performed in a workmanlike manner.
On appeal the owner contends, in substance, that the
Administrator's order is incorrect and should be modified because:
A) according to Policy Statement 91-2, MCI eligibility applies to
a roof of less than three-ply if the installation was commenced
prior to March 25, 1991, and the work herein was commenced and
completed in 1988, and clearly qualifies as an MCI; B) if the
inspector had inspected the roof, it would have been found that the
roof was in good condition with no leak damage (the owner submitted
sworn statements, prepared by the owner, from the tenants of
apartments 5E and 5J wherein they both state that they have not
had any leaks in their apartments since the installation of the new
roof); C) the Rent Administrator also erred in relying on the
inspections performed nearly 4« years subsequent the installation
of the new roof; D) the owner was never notified of the inspection
date and was not afforded an opportunity to comment on the results
of the inspection; and E) only ten of the ninety-four apartments in
the subject building were found to have problems with the windows,
one window per apartment on average had a minor defect (the owner
submitted sworn statements from the ten tenants confirming that all
windows within their respective apartments were in good working
order).
The Commissioner is of the opinion that this petition should be
denied.
Whereas the Administrator's determination with respect to the roof
was predicated on a newly issued Policy Statement (90-6), the
Commissioner notes that the eligibility requirements of a roofing
installation, for consideration as a major capital improvement, was
effectively revised pursuant to Policy Statement (91-2), issued
February 16, 1991, and made effective 30 days thereafter. The
Commissioner notes that the subject roof installation was completed
several years prior to the effective date of Policy Statement 91-2,
and did constitute an MCI for which a rent increase may be
warranted, provided the owner otherwise so qualifies.
ADMIN. REVIEW DOCKET NO. HA-530009-RO
In order for work to qualify for a major capital improvement rent
increase, it must meet various criteria, including the requirement
that the installation be performed in such a workmanlike manner so
as to inure to the benefit of all tenants. While the installation
of a new roof cap sheet of the type involved herein has been held
to qualify as a major capital improvement at the time the work in
question was performed, such roof must be installed in such a
manner that for a reasonable period of time thereafter the
building, particularly the top floor apartments which are most
directly affected, are free from exterior water seepage emanating
from the roof.
Inspections performed by DHCR on April 24 and 25 of 1990 during the
original MCI proceeding found that of the eleven top (5th) floor
apartments inspected, six apartments displayed ceiling damage from
roof leaks. Furthermore, numerous tenants continued to complain of
recurring leaks during the reopened proceeding.
Inspections performed on July 31 and August 12 of 1992 found that
of the six top (5th) floor apartments inspected, two apartments
displayed ceiling damage from roof leaks.
Accordingly, the Commissioner finds that the Administrator was
correct to have denied the application for a new roof based upon
the continued water seepage.
With regard to the window installation, a detailed physical
inspection was conducted of the subject premises during the
original MCI proceeding which disclosed that problems still existed
with the windows of ten apartments ( FF, 2B, 2D, 2F, 2T, 4A, 4M,
5A, 5C and 5N) despite the owner's assertion to the contrary.
The Commissioner finds that the Rent Administrator did not abuse
his discretion by exempting the ten apartments which contained
defective windows. Moreover, the Commissioner notes that the
Administrator could have revoked the entire rent increase for the
window installation on the grounds that the improvement did not
inure to the benefit of all tenants in the building, but instead
chose to exclude the ten apartments from the rent increase.
With regard to the procedure involved in conducting an inspection,
there is no agency policy requiring that owners or tenants be given
notice of impending inspections, the right to be present, or the
ADMIN. REVIEW DOCKET NO. HA-530009-RO
right to comment on the resulting reports, nor does due process
require such a policy. The record reveals that the owner was duly
notified of the tenants' complaints and was afforded ample
opportunity to respond thereto and to make the necessary repairs.
It was within the Administrator's proper scope of discretion and
authority to deem the record adequate to determine the tenants'
complaints based upon the written submission from both parties and
the inspection report.
Based upon the entire evidence of record, the Commissioner is of
the opinion and finds that the Administrator did not abuse his
discretion in issuing the order appealed herein.
THEREFORE, in accordance with the applicable provisions of the Rent
Stabilization Law and Code, the Rent and Eviction Regulations for
the City of New York, and Operational Bulletin 84-1, it is
ORDERED, that this administrative appeal be, and the same hereby is
denied; and that the Administrator's order be, and the same hereby
is affirmed.
ISSUED:
____________________
Joseph A. D'Agosta
Deputy Commissioner
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