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
APPEALS OF DOCKET NOS.:
: HG410156RT/HG410160RT/
VARIOUS TENANTS OF 305/315 EAST HH410002RT/HH410091RT/
86TH STREET, NEW YORK, NY HH410102RT/HH410111RT/
PETITIONERS : HH410112RT/HH410114RT
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RENT ADMINISTRATOR'S
DOCKET NO.: FD410089OM
ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
Various tenants and the Yorkshire Towers Tenants Association timely filed
petitions for Administrative Review (PARs) against an order issued on July
12, 1993 by the Rent Administrator (Gertz Plaza) concerning the housing
accommodations known as 305/315 East 86th Street, New York, New York,
various apartments, wherein the Rent Administrator determined that the
owner was entitled to a rent increase based on a major capital improvement
(MCI).
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 owner commenced this proceeding on April 22, 1991 by filing an
application for an MCI rent increase predicated on the building-wide
installation of new apartment windows at the subject premises. In response
to the owner's application, several tenants and the Tenants Association
filed answers, contending in substance, that there are defects in their
newly installed windows. Based on these allegations, a physical inspection
was conducted by the Division on March 22, 1993 and said inspection
revealed that tenants in 27 out of a total of 693 apartments in the subject
building had valid complaints regarding their windows.
Thereafter, the Administrator issued the order appealed herein, granting
the owner's application and authorizing a rent increase for the rent
stabilized apartments in the subject premises. However, the owner was
barred from collecting the increase from tenants in the 27 apartments until
repairs have been completed. Said order contains the notation that the
owner amended the room count from 2205 rooms to 2141 rooms and that this
figure was further reduced by 16 rooms to adjust the
professional/commercial number of rooms.
In their petitions for administrative review, the tenants request reversal
or modification of the Administrator's order and contend, in substance,
that it still difficult to close the windows in his apartment (Apt. 4GE);
that the new windows are drafty (Apts. 4GW & 5GW); that the new windows are
difficult to open and that his apartment should have been included with
those which are not subject to the rent increase until the defective
condition has been corrected (Apt.5PW); that although some repairs have
ADMIN. REVIEW DOCKET NO.: HG410156RT, et al.
been done, the windows are still drafty (Apt. 9GE); that the owner
installed ill-fitting windows (Apt. 14TW); that his apartment should have
been inspected and included with those listed in the Administrator's order
as having valid window complaints and that the Division found his
complaint regarding the new windows to be valid as evidenced by a rent
reduction order (Docket No. GA410380S) issued on May 18, 1993 (Apt. 19LW);
that the Administrator's order must be reversed since the new windows do
not inure to the benefit of all tenants; that the Administrator's order
acknowledges that there are 27 tenants who have not benefitted from the new
windows; that 64 tenants complained about the windows but only 27 tenants
were temporarily exempt from the increase; that the Administrator's order
does not state whether all 64 apartments were inspected nor does the order
explain what constituted a valid complaint; that an engineering survey and
physical inspection conducted in February 1992 by a professional engineer
retained by the Yorkshire Tower Tenants' Association found deficiencies in
the new windows; that there are approximately 560 windows in the terrace
doors that were not replaced representing 12% of the 4,252 windows which
were replaced in the building; that the improvement is not in conformance
with RSC 2522.4(a)(2)(i)(c) since the owner did not replace all similar
components in the building nor did the owner demonstrate that these similar
components did not require improvement; that RSC 2522.4(a(2)(i)(a) requires
that in order for an improvement to qualify for an increase in rent, such
improvement must be deemed depreciable under the Internal Revenue Code,
other than for ordinary repairs and that the file which was made available
by the owner does not include any proof that the new windows are
depreciable under the IRC; that the Administrator computed the rent
increase based upon a 60 month amortization period but this should be
amended to an 84 month amortization; that in the instant case, the
Administrator completely ignores the tenants' allegations that the owner is
not maintaining services and that there exist immediately hazardous
conditions in the building; that the owner provides no justification for
reducing the room count of the subject building from 2205 rooms to 2125
rooms; that upon information and belief the original room count was
correct; that the reduction of 16 rooms for adjustment of professional and
commercial number of rooms is incorrect; that this reduction in the number
of professional/commercial rooms was not accompanied by the proper
determination of monthly rentals; and that the combination of these factors
resulted in a higher per room per month rent increase (Tenants
Association).
After a careful consideration of the entire evidence of record, the
Commissioner is of the opinion that these administrative appeals should be
denied.
The Commissioner notes that none of the tenants who filed individual
petitions herein with the exception of the tenant in Apt. 5PW raised
objections to the quality or adequacy of the installation while this
proceeding was before the Rent Administrator although afforded the
opportunity to do so. Accordingly, pursuant to Section 2529.6 of the Rent
Stabilization Code, the tenants' allegations may not be considered now when
offered for the first time on administrative appeal. However the owner is
hereby directed to correct any defective conditions with the windows
brought to its attention in writing, if it has not already done so and the
ADMIN. REVIEW DOCKET NO.: HG410156RT, et al.
determination herein is without prejudice to the rights of the tenants
filing appropriate applications with the Division for a rent reduction
based upon a decrease in services, if the facts so warrant.
Regarding the contention of the tenant in Apt. 5PW, the record discloses
that although the tenant complained while the proceeding was before the
Administrator, said complaint stated that the new windows are harder to
open than the old ones and that they are aesthetically inferior. The
Commissioner finds that such complaint was not specific enough to warrant
an inspection nor does it warrant modification of the Administrator's
order. However, the tenant is advised to notify the owner in writing of
any problems with the windows.
A review of the Division's records discloses that there are individual rent
reduction orders still in effect for various apartments. The Commissioner
notes that as provided for in the Administrator's order (effective date
July 1, 1991) the increase granted therein is not collectible from such
apartments for the period during which the rent reduction order is in
effect. However the portion of the MCI order starting before the effective
dates of the rent reduction orders is collectible by the owner. When a
rent restoration order has been issued, then the MCI rent increase will be
collectible only from the effective date of the rent restoration.
Concerning the tenants' contention that 64 tenants complained about the
windows but only 27 tenants were exempt from the increase, the Commissioner
notes that of those tenants some failed to raise specific complaints
regarding the functioning of the windows while others failed to provide
access to the Division's inspectorial personnel.
With respect to the tenants' contention that the Administrator's order must
be reversed since the new windows do not inure to the benefit of all
tenants and that said order acknowledges that there are 27 tenants who have
not benefitted from the new windows, the Commissioner notes that the
tenants do not dispute that there was a building-wide installation of new
apartment windows; that said installation met the Division's criteria to
qualify for a rent increase; that the fact that a limited number of over
4,000 windows in a small percentage of apartments (27 out of close to 700
units) need adjustment/repairs does not warrant the reversal of the
Administrator's order; and that under the circumstances the Administrator
did not abuse his discretion in temporarily suspending the increase as to
the units specified until appropriate repairs were accomplished
As to the tenants' contentions that the owner did not replace all similar
components in the building since there are approximately 560 windows in the
terrace doors which were not replaced and that the owner did not provide
proof that the new windows are depreciable under the Internal Revenue Code,
it is the established position of the Division that the building-wide
installation of apartment windows to replace windows which are 25 or more
years old (as is the case herein) constitutes a major capital improvement
for which a rent increase may be warranted. An owner is not required to
replace window panes in terrace doors (due to the separate and distinct
nature thereof) in order to qualify for a rent increase for the building-
wide installation of new apartment windows. The division has ruled,
however, that if such terrace doors are replaced with the inclusion of
thermal glass, an additional rent increase therefore would be warranted
only from those apartments so equipped.
ADMIN. REVIEW DOCKET NO.: HG410156RT, et al.
Turning to the tenants' contention that the Administrator incorrectly
computed the rent increase based upon a 60 month amortization instead of an
84 month amortization, the Commissioner finds that the Administrator did in
fact correctly compute the rent increase since the window installation
commenced on October 30, 1989 and the 84 month amortization applies where
the physical work commenced or legally binding signed contracts were
entered into on or after June 29, 1990.
Regarding the tenants' contention that the owner is not maintaining
services and that there are immediately hazardous conditions in the
building, a review of Division's records discloses that said violations
(42) do not reflect the existence of any immediately hazardous conditions.
In addition, there are no rent reduction orders based on the owner's
failure to maintain services of a building-wide nature outstanding against
the subject premises.
Concerning the tenants' contention regarding the room count, the
Commissioner notes that pursuant to a request via the Freedom of
Information Act, the tenants counsel reviewed the entire file prior to the
Administrator's order being issued and did not submit any objections
relating to the amended room count; that the per room increase was computed
on an approved cost for the windows which was $12,484.93 less than the
amount claimed by the owner in its application to reflect the commercial
tenants share of such cost; and that without the reduction in room count to
reflect commercial units the increase for stabilized apartments would have
been computed on a higher cost. The owner may not charge the tenants based
on a greater number of legal rooms for MCI purposes and any adverse
determination stemming from a miscount in rooms which arises after an MCI
order is issued becomes the responsibility of the owner. This
determination is without prejudice to tenants' right to file individual
complaints of rent overcharge, if the facts so warrant.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that these petitions 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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