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.: HC430197RT/
APPEALS OF HD430062RT/ HD430063RT/
VARIOUS TENANTS OF HD430064RT/ HD430065RT/
26 EAST 63RD STREET HD430066RT/ HD430076RT/
NEW YORK, NEW YORK HD430078RT/ HD430082RT/
HD430084RT/ HD430088RT/
HD430089RT
RENT ADMINISTRATOR'S
DOCKET NO.: FG430040RK
PETITIONERS
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ORDER AND OPINION REMANDING PROCEEDINGS ON APPEAL
The above named petitioner-tenants timely filed petitions for
administrative review (PARs) against an order issued under Docket
No. FG430040RK on March 16,1993, by the Rent Administrator (Gertz
Plaza) concerning the housing accommodations known as 26 East 63rd
Street, New York, New York, various apartments.
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.
On May 24, 1991, the Rent Administrator issued an order (Docket No.
DF430213OM) denying the owner's application for a major capital
improvement rent increase for elevator upgrading based on the
owner's failure to adequately respond to various notices.
By letter dated June 26, 1991, the owner, a condominium
corporation, requested reconsideration of the Administrator's order
issued on May 24, 1991. On August 1, 1991, the Administrator
reopened the said proceeding and afforded the tenants an
opportunity to comment thereupon. In response to the reopened
proceeding, several tenants filed answers, contending, in
substance, that with the conversion of manned to self service
elevators, there is a loss of security; and that the savings in
labor costs should be passed on to the tenants since the positions
of seven elevator operators were
eliminated.
ADMIN. REVIEW DOCKET No. HC-430197-RT ET. AL.
On March 16, 1993, the Rent Administrator issued an order (Docket
No. FG430040RK) revoking the denial order issued under Docket
No.DF430213OM and granted retroactive and prospective rent
increases for the controlled and stabilized units based on the
determination that the installation constitutes an MCI. Said order
contains a notation advising the owner that to reduced staffing or
any services, "prior approval of the Division is required."
In their petitions for administrative review, the tenants request
reversal of the Administrator's order and contend, in substance,
that the order of the Rent Administrator is arbitrary and
capricious and erroneous as a matter of law; and that a conversion
from manned to automatic self service elevators is a decrease in
required services under the Rent Stabilization Law and Code and the
Rent and Eviction Regulations. The tenant in Apt. 10A further
asserts that at the time the Emergency Tenant Protection Act of
1974 became effective, the landlord employed seven elevator
operators and also maintained the position of a doorman on a 24
hour basis; that after the elevator upgrading the positions of the
seven operators were eliminated and the doorman replaced by a
concierge on a 24 hour basis; that to the best of knowledge and
belief, the landlord has never applied for, or received permission
to discontinue the above mentioned services; and that on
reconsideration the Rent Administrator failed to address the issue
of whether the landlord eliminated a required service.
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that this petition should be
remanded to the Rent Administrator for further consideration as
provided hereinbelow.
The Commissioner notes that a review of the Division records
discloses that the owner did not file requisite application with
the Division for permission to decrease or modify services as
required by Sections 2522.4(d) and (e) of the Code and Section
2202.21 of the Rent Regulations. The record further supports the
tenants' allegation that the building's labor force was reduced as
a result of the conversation from manned to automatic elevator
operation. It would be inconsistent with the Rent Laws, Code and
Regulations to sanction a rent increase where the actions of the
owner resulted in the removal of a required service without prior
agency approval.
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ADMIN. REVIEW DOCKET NO. HC-430197-RT ET. AL.
In this regard the Division has held that such conversion, which
does not result in a loss of vertical transportation, would be
approved on condition the owner provides adequate substitute
building security and other services; and that where there has been
a substantial savings to the owner by virtue of reduced payroll
costs, such savings be passed on to the tenants. In view of the
foregoing, the Commissioner is of the opinion and finds that the
major capital improvement rent increase granted under Docket No.
FG430040RK should be suspended, retroactive to the effective dates
stated in said order, and that this proceeding should be remanded
to the Administrator to be held in abeyance, in accordance
herewith.
This determination is issued without prejudice to the owner filing
an appropriate application with the Division for permission to
modify or substitute services. Upon the filing of such application
and upon the approval thereof, on such conditions found to be
warranted, the Rent Administrator shall give appropriate
consideration to the owner's MCI application and the appropriate
effective date any possible rent increase thereunder.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
and the Rent and Eviction Regulations for New York City, it is
ORDERED, that these petitions be, and the same hereby are, granted
to the extent of remanding this proceeding to the Rent
Administrator for further processing in accordance with this order
and opinion; and that the major capital improvement rent increase
granted under Docket No. FG430040RK be and the same hereby is
suspended, from the inception thereof; and it is further
ORDERED, that the owner refund to the tenants any excess rent
collected as a result of this order within 30 days from the date of
issuance hereof.
ISSUED:
____________________
Joseph A. D'Agosta
Deputy Commissioner
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