HB410031RO
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 : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. HB410031RO
: DRO DOCKET NO.ZEJ410411R
JANOFF & OLSHAN, INC. TENANT: BONNIE CALDER
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On February 12, 1993, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
January 8, 1993, by the Rent Administrator, 92-31 Union Hall Street,
Jamaica, New York, concerning the housing accommodations known as
440 West 34th Street, New York, New York, Apt. 6H wherein the Rent
Administrator determined the fair market rent pursuant to the
special fair market rent guideline promulgated by the New York City
Rent Guidelines Board for use in calculating fair market rent
appeals.
The Administrative Appeal is being determined pursuant to the
provisions of Sections 2522.3 and 2522.5 of the Rent Stabilization
Code.
The issue herein is whether the Rent Administrator's order was
warranted.
The Commissioner has reviewed all of the evidence in the record
and has carefully considered that portion of the record relevant to
the issue raised by the administrative appeal.
This proceeding was commenced by the tenant's filing of a
complaint questioning the fair market rent in October, 1990. The
tenant stated that she was the second rent stabilized tenant and had
moved to the subject apartment in March, 1990, at a rental of
$925.00 per month.
The owner was served with a copy of the tenant's complaint and
afforded an opportunity to submit comparability data for use in
determining the fair market rent. In response, the owner stated
that the fair market rent appeal should be dismissed because the
tenant herein was not the first rent stabilized tenant and the
complaint was filed almost two years after the date of decontrol.
The owner stated that the first rent stabilized tenant moved to the
subject apartment on July 1, 1989. The owner also submitted
comparability data and an invoice dated June 14, 1989 from the
general contractor "La Continental" showing the following
improvements were made in the subject apartment at a total cost of
$3,210.70: Installation of new Hotpoint Refrigerator; Installation
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of new Whirlpool Range; Removal of old kitchen sink and installation
of new double sink; removal of old kitchen floor and installation of
new tile floor; and "retiled complete bathroom".
In a response dated August 13, 1992, the tenant stated in
substance that when she first moved to the subject apartment the
refrigerator in the apartment was a General Electric manual defrost
model (subsequently the tenant asked for a new refrigerator and
received a new Hotpoint model for which she is paying a rent
increase); that she has a Hardwick Century Service Range and not a
Whirlpool model; that she has a single sink which frequently leaks
and not a double sink; that the kitchen tiles were replaced with
self-stick vinyl tiles; that the bathroom tiles are the original
tiles from 65 years ago; and that all the work done was performed by
Louis Nazar who was the superintendent of the building who formed a
company called "La Continental" while working as a superintendent.
The owner was served with a copy of the tenant's August 13,
1992 response and in a reply dated August 25, 1992, stated inter
alia "There is no basis for the tenant's claim that the work was
never done. La Continental is a licensed contracting firm.
Enclosed is their bill and cancelled check. We checked the work.
The tenant's comments are all hearsay and without any basis in
fact."
In order to ascertain whether the improvements claimed by the
owner had in fact been installed, DHCR caused a physical inspection
to be held at the subject apartment on September 28, 1992. The
inspection report disclosed that the range was a Hardwick Century
Service Range; that the sink was a single stainless steel; and that
the old tiles (original) in the bathroom go up to the window ledge
level but that there have been new tiles installed above that level
above the bathtub.
In Order Number ZEJ410411R, the Rent Administrator adjusted the
initial legal regulated rent by establishing a fair market rent of
$747.19 effective July 1, 1989, the commencement date of the initial
rent stabilized lease. The fair market rent was determined solely
on the basis of the special fair market rent guideline since it was
found that the owner had not submitted usable comparability data.
No allowance was given for the vacancy improvements based on the
inspection report. However, an improvement increase of $10.00 was
allowed effective September 1, 1992 due to the installation of a new
Hotpoint refrigerator during the tenant's occupancy and with the
tenant's consent to said installation. In addition, the Rent
Administrator determined that the tenant had paid excess rent of
$6,161.96 through January 31, 1993, and directed the
owner to refund such excess rent to the tenant.
In this petition, the owner alleges in substance that the
tenant's complaint should have been dismissed as untimely since the
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prior tenant had been served with a copy of the owner's report of
vacancy decontrol as well as the initial apartment registration
(hereafter RR-1 form) in July of 1989 and the tenant's complaint
herein was filed after the 90 day limit; that the owner provided
proof of service of the initial registration; that the Rent
Administrator should have granted rent increases for the vacancy
improvements; that the Rent Administrator's order is deficient in
failing to cite the findings of the DHCR inspector; that a hearing
should have been held so that the owner could have attempted to
produce witnesses as to the installation of the improvements; that
the Rent Administrator incorrectly denied the owner a vacancy
increase as well as two increases for two one year leases during the
first sixteen months of the complainant's tenancy in that Section
2522.5 (a)(1) of the Rent Stabilization Code does not refer to the
situation where a new tenant occupies an apartment within the time
period of the first stabilized tenant's lease but only covers the
initial stabilized tenant; that even if the owner was not entitled
to any increase for the subject apartment until after the expiration
date of the first stabilized tenant's lease passed, the Rent
Administrator failed to include all permitted increases in the rent
calculations - that is a 12% vacancy increase plus a 5 1/2%
guideline increase for the complainant's initial lease plus a 7%
increase for the complainant's renewal lease commencing March 1,
1991; that the owner submitted valid comparables which should have
been considered; that contrary to the Rent Administrator's statement
in her order Apartment 16B did become decontrolled as a result of a
vacancy occurring as of October 30, 1990 - within the required
period for consideration as a comparable; and that the owner did
submit comparability data for the whole line of apartments; and that
the owner should not be penalized for failing to meet some technical
requirements.
The Commissioner is of the opinion that this petition should be
denied.
Pursuant to Section 2522.3(e) of the Rent Stabilization Code,
applicable to fair market rent appeals filed after April 1, 1984,
comparability will be determined based on the following:
(1) Legal regulated rents, for which the time to file a Fair Market
Rent Appeal has expired and no Fair Market Rent Appeal is then
pending, or the Fair Market Rent Appeal has been finally determined,
charged pursuant to a lease commencing within a four year period
prior to, or a one year period subsequent to, the commencement date
of the initial lease for the housing accommodation involved; and
(2) At the owner's option, market rents in effect for other
comparable housing accommodations on the date of the initial lease
for the housing accommodations involved.
Section 2522.5(a)(1) of the Rent Stabilization Code provides in
pertinent part that for a housing accommodation subject to the City
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Rent Law which becomes vacant after March 31, 1984, the owner may
not increase the rent charged in the initial lease or other rental
agreement pursuant to annual guidelines for a period of one year or
until the expiration date of the initial lease or rental agreement,
whichever is later.
With regard to the owner's contention that the tenant's
complaint was untimely, it is noted that the owner did not submit
sufficient evidence to establish that the RR-1 form was served on
the prior tenant. It is noted that Post Office Form 3811 submitted
by the owner to prove timely service on the prior tenant by
certified mail is not postmarked by the Post Office and there is no
date of delivery on such form. Accordingly, it must be considered
that the tenant's complaint herein questioning the fair market rent
was timely filed.
The owner's contention that rent increases should have been
granted for the vacancy improvements is without merit. The report
of physical inspection as described above does not corroborate the
owner's invoice describing the alleged improvements in several major
respects - different make of range found; single sink instead of
double sink and complete retiling of bathroom not done. Further the
tenant's contention that a new Hotpoint refrigerator was not in the
subject apartment as the owner claimed when the tenant first took
occupancy has merit. If a new refrigerator had been installed at
that time, there would have been no need for the tenant to request
and pay for a new Hotpoint refrigerator two years later. Due to
such major discrepancies, the Rent Administrator's determination
denying the entire rent increase for these vacancy improvements was
warranted. The Rent Administrator's order was not deficient in
failing to cite the specific findings of the DHCR inspector and
there was no need to hold a hearing regarding this issue.
Further pursuant to Section 2522.5(a)(1) of the Rent
Stabilization Code, the Rent Administrator correctly determined that
the owner was not entitled to a rent increase for the tenant herein
until the expiration date of the initial lease for the first rent
stabilized tenant. In addition, contrary to the owner's contention,
the Administrator correctly considered the period immediately
following the expiration date of said initial lease as a vacancy
lease for the tenant herein and allowed the owner the appropriate
vacancy increase to which it was entitled. The owner was not
entitled to a guideline and vacancy increase for the period covered
by the initial lease of the first rent stabilized tenant.
Finally the owner did not submit the required comparability
data to have comparable apartments considered in the determination
of the fair market rent. The Administrator correctly found that
apartment 16B which was initially rented to the first stabilized
tenant on November 1, 1990 did not fit the criteria of Section
2522.3(e) in that such renting was not within four years prior or
one year subsequent to the initial stabilized lease of the subject
apartment which occurred on July 1, 1989. The owner does not
specifically list allegations with respect to the denial of the use
of other comparables submitted. However the owner does make general
allegations that other comparables should have been used and that it
did submit comparability data for complete lines of apartments and
should not be penalized for failing to meet technical requirements.
HB410031RO
The Commissioner notes that the Rent Administrator also listed
apartment 6H as an apartment where the owner failed to submit
complete rental data for the entire subject line and failed to
submit the RR-1 Form or DC-2 Notice with proof of service. The
Commissioner further notes that apartment 6H is the subject
apartment and that the Rent Administrator meant to refer to
apartment 16H. The Rent Administrator's order is hereby amended to
change the reference on the first line of page two to show Apartment
16H rather than 6H. During the course of the proceeding before the
Rent Administrator in a notice from DHCR dated August 21, 1992, the
owner was specifically informed that apartment 16H was being
considered as a comparable but that the owner needed to submit data
for the entire "H" line of apartments and told exactly what data
needed to be submitted. The owner failed to comply with the August
21, 1992 notice. In addition the owner did not submit postmarked
proof of service of the RR-1 Form or DC-2 Form on the tenant of
Apartment 16H. Accordingly, Apartment 16H was correctly not used as
a comparable apartment. Finally, other apartments cited by the
owner did not contain the same number of rooms as the subject
apartment or did not become vacant within the required time periods
or the owner did not submit complete comparability data for such
apartments. Accordingly, the Rent Administrator's order was
warranted.
The owner is directed to roll back the rent to the lawful
stabilized rent consistent with this decision and to refund or fully
credit against future rents over a period not exceeding six months
from the date of receipt of this order, the excess rent collected by
the owner.
In the event the owner does not take appropriate action to
comply within sixty (60) days from the date of issuance of this
order, the tenant may credit the excess rent collected by the owner
against the next month(s) rent until fully offset.
The owner is directed to reflect the findings and
determinations made in this order on all future registration
statements, including those for the current year if not already
filed, citing this order as the basis for the change. Registration
statements already on file, however, should not be amended to
reflect the findings and determinations made in this order. The
owner is further directed to adjust subsequent rents to an amount no
greater than that determined by this order plus any lawful
increases.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be, and
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the same hereby is, denied, and, that the order of the Rent
Administrator be, and the same hereby is, affirmed as modified to
show Apartment 16H rather than Apartment 6H on page two of the order
on the first line.
ISSUED
JOSEPH A. D'AGOSTA
Deputy Commissioner
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