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.: HK230103RT
APPEALS OF HK230115RT
HK230116RT
HK230117RT
HK230129RT
HK230135RT
Various Tenants of HK230136RT
706 Eastern Parkway HK230137RT
Brooklyn, New York HK230138RT
HK230139RT
HK230140RT
HK230141RT
HK230142RT
HK230143RT
HK230144RT
HK230145RT
HK230147RT
RENT ADMINISTRATOR'S
PETITIONERS DOCKET NO: GE230113OM
------------------------------------X
ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
On November 19, 1993 the above-named petitioner-tenants filed
administrative appeals against an order issued on October 15, 1993
by the Rent Administrator ( 92-31 Union Hall Street, Jamaica, New
York) concerning the housing accommodations known as 706 Eastern
Parkway, Brooklyn, New York, various apartments, wherein the
Administrator granted major capital improvement (MCI) rent
increases for the controlled and stabilized apartments in the
subject premises based on the installation of a new intercom, a new
roof, new apartment windows and new vestibule doors at the
premises.
At the outset the Commissioner notes, as confirmed by the record,
that the tenants of apartments 2B, 2C, 3D, 4C, 4I, 5A, 5B, 5C, 5G,
6B, 6C, 6D, 6G and 6I were served by the Administrator with notice
of the instant application and that they failed to respond thereto.
Fundamental principals of the administrative appeal process and
Section 2529.6 of the Rent Stabilization Code prohibit a party from
raising issues on appeal which were not raised below.
ADMIN REV. DOCKET NO. HK230103RT
The tenants of said apartments could have raised the very issues
before the Rent Administrator which they now seek to raise for the
first time on appeal. Accordingly, the Commissioner is constrained
to foreclose consideration of these issues in this appeal
proceeding.
The owner commenced this proceeding on May 19, 1992 by filing an
MCI rent increase application predicted on the installation of a
new roof, new vestibule doors, new apartment windows and a new
intercom.
Five of the 52 affected tenants responded to the owner's
application. Of these five, only three ( apartments 3B, 5I and 6E)
raised complaints regarding the items installed by the owner. The
Administrator served copies of these complaints upon the owner who
submitted an answer advising, in substance, that minor repair work
had been performed and that installations were in "good working
condition." Copies of the owner's answer were served on these three
tenants on July 23, 1993, but they failed to respond.
On October 15, 1993 the Administrator issued the order here under
review, finding that the installations qualified as major capital
improvements and authorizing rent increases for the subject
apartments.
Two of the tenants who raised complaints below (residing in
apartments 3B and 6E) filed petitions for administrative review in
which they repeated said complaints.
In response the owner advised, in substance, that all of the
installations were working properly.
After careful consideration, 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.
[2]
ADMIN REV. DOCKET NO. HK230103RT
The evidence of record in the instant case indicates that the owner
correctly complied with the application procedures for an MCI. The
owner substantiated its application in the proceeding below by
submitting to the Administrator the contractors' certifications,
contracts, proposals, invoices and cancelled checks for the work in
question. On the other hand, the tenants have not submitted any
evidence, either in the proceeding before the Administrator or on
appeal, to support any of their allegations and have not
established that the rent increase should be revoked.
The Commissioner notes that various tenants asserts, in substance,
that their leases do not contain clauses authorizing the rent
increase. Pursuant to Section 2522.4 of the Code and as specified
in the Administrator's order, MCI rent increases are not
collectible during the term of the lease then in effect unless a
specific provision in the lease authorizes an increase during its
term. The tenants are advised to refer to their leases which were
not attached to the petitions and are not part of the record. This
order is being issued without prejudice to the tenants' right to
file individual complaints of rent overcharge, if the facts so
warrant.
The Commissioner further notes that two of the petitoner-tenants,
according to the record, were not in occupancy at the time the
owner's application was filed. For the increase granted by this
Order to be collectible during the term of the current lease, a)
the lease must contain a provision authorizing the collection of an
increase pursuant to a DHCR Order; and b) where the application for
this increase was pending prior to the commencement date of a
vacancy lease, the increase granted in this order is collectible
only if such lease contains a specific provision regarding the
application pending before the Division of Housing and Community
Renewal, citing the Docket Number assigned, the basis for the
application, and that any increase granted pursuant to a DHCR order
would be effective during the term of the lease. In the absence of
same, the increase is not collectible until the expiration of the
lease term in effect at the time the order is issued.
As to any apartment which was subject to Rent Control at the time
instant application was filed and which subsequently became subject
to Rent Stabilization jurisdiction, the Commissioner notes that
since the free market rent charged the first stabilized tenant
included any and all services then being provided, and in the
absence of a fair market rent appeal, the rent increase provided
for in this order is not collectible from the first stabilized
tenant or any subsequent tenant of such apartment.
[3]
ADMIN REV. DOCKET NO. HK230103RT
Any tenant who took occupancy after the effective dates of the
increase is not obligated to pay any arrears for a period to the
date of occupancy.
This order and opinion is issued without prejudice to the tenants'
right to file an appropriate complaint for a decrease in rent based
on a decrease in either building-wide or individual apartment
services, if the facts now so warrant.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Code and the Rent and Eviction Regulations for New
York City, it is
ORDERED, that these petition be, and the same hereby are, denied;
and that the order of the Rent Administrator be, and the same
hereby is, affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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