DOCKET NO.: EJ210461RT
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 : SJR NO. 6730, 6492
APPEAL OF ADMINISTRATIVE REVIEW
: DOCKET NOS. EJ210461RT
NILDA ROMERO, D.R.O. DOCKET NO. DG210003UC
PETITIONER : OWNER: FISHER ASSOCIATES
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MODIFIED ORDER AND OPINION REMANDING PROCEEDING TO THE
RENT ADMINISTRATOR UPON REMIT
This Order and Opinion is issued after an Order of the Supreme Court, County
of Kings, Justice Irving S. Aronin, dated May 11, 1993, which ordered remit
of an Article 78 Proceeding, Index Number 44242/92, directing the Division to
reconsider its former Order and Opinion issued on October 15, 1992, upon
which the Court proceeding was based.
That Order and Opinion itself was issued pursuant to a Mandamus Order after
an Article 78 Proceeding before the Supreme Court, County of Kings, Justice
Held, dated August 11, 1992, Index Number 21893/92, which directed the
Division to issue an Order and Opinion in the underlying Petition for
Administrative Review on or before October 22, 1992.
On October 24, 1990, the above named petitioner-tenant filed a Petition for
Administrative Review against an order issued on September 28, 1990, by the
Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, concerning
housing accommodations known as Apartment 3L, 1090 Flastbush Avenue,
Brooklyn, New York, wherein the Rent Administrator determined that the
subject premises was not subject to Rent Stabilization.
The issue in this appeal is whether the subject premises are stabilized.
The applicable sections of the Rent Stabilization Code (Code) are Sections
2520.11(d) and 2527.3(a).
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the record relevant to the issues raised
by the administrative appeal.
The owner commenced this proceeding on July 7, 1989 by filing an application
to determine whether the subject apartment was exempt from the Rent
Stabilization Law on the basis that it is located in a building containing
less than six dwelling units.
In the body of the application the owner stated that the building known as
1090 Flatbush Avenue is also known as 2118 Cortelyou Road. However, in the
DOCKET NO.: EJ210461RT
same sentence it was stated that the premises consist of two separate
buildings, each containing four dwelling units and therefore not subject to
the Code.
Attached to the application was a copy of order number ZAA200383RV, issued
June 24, 1987, in which the Administrator directed the owner to issue the
tenant (petitioner herein) a renewal lease pursuant to the Code. The order
identified the premises as apartment 3L, 1090 Flatbush Avenue.
Also attached to the application was a Notice of Proceeding to Modify the
order (CDR 27,411) in Docket No. K-3103561-R, dated June 9, 1987, and the
June 16, 1987 Order to Revoke the same order (CDR 27,411). These documents
refer to a tenant named Bernard Glover in apartment 3L at 2118 Cortelyou
Road. Nevertheless, the owner claimed in his application to have believed
that these documents referred to the June 24, 1987 order number ZAA-200383-
RV. The June 24, 1987 order was appealed by the owner under docket number BG
210348RO.
Also attached was a copy of tenant Glover's answer in K-3103561-R in which
the tenant stated that his building, 2118 Cortelyou Road is registered as
1086 Flatbush Avenue and his building address is 1090 Flatbush Avenue. He
further stated that 2118 Cortelyou is "part of" 1086 Flatbush and together
they have one boiler, eight apartments and six stores.
Also attached were two Certificates of Occupancy (COs) dated January 29, 1987
and May 18, 1987, respectively, for 1090-92 Flatbush Avenue and 2112-2122
Cortelyou Road A/K/A 1086-88 Flatbush Avenue showing four apartments and two
stores (1090-92) and six stores and four apartments (2112-2122 A/K/A 1086-
1088). Both CO's show the same block and lot number.
In addition the owner attached copies of the following three orders:
CDR 27,411 as amended (BL210010RP [K3103561R]) regarding tenant Glover at
apartment 3-C (sic) 2118 Cortelyou Road, dated June 27, 1988; ZAH210553R
(later corrected to ZAJ210553R), regarding a tenant Chaturnal at apartment 2-
L, 1090 Flatbush Avenue, dated August 16, 1988; and ZBL2100003UC, regarding
tenant Glover at apartment 3-C, 2118 Cortelyou Road, dated May 25, 1988. In
all three orders the Administrator found the subject building to be exempt
from stabilization on the basis that it had less than six dwelling units.
In an November 29, 1989 answer to the owner's application, tenant Nilda
Romero asserted that the two buildings constitute a horizontal multiple
dwelling consisting of eight apartments and seven stores. In support of this
conclusion she states that both buildings have the same owner, the same
boiler, the same block and lot number, are registered as one building known
as 1090 Flatbush Avenue with the City Department of Housing Preservation and
Development (HPD), and they "may" share the same water main. The tenant
requests a hearing and inspection if the Division deems her assertions
inadequate.
On January 26, 1990 the tenant submitted a copy of a deed which allegedly
showed the properties were purchased as one building known as 1090 Flatbush
Avenue. (The dimensions in those deed correspond to those of the entire
block 5164 lot 9 on a map submitted by the tenant. This is the block and lot
the tenant asserted above that was common to both buildings.)
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In a response dated February 5, 1990, the owner cited the orders submitted
with its application and said that since certain of these orders, which found
the buildings to be exempt from stabilization, were not appealed they
constitute the law with respect to the subject premises and are therefore
binding on tenant Romero as well.
On May 3, 1990, the Administrator sent the owner a notice requesting the
following information:
"1. Certificate of Occupancy in effect as of May
31, 1968.
2. Certificate of Occupancy in effect as of
present date.
3. Tax, lot and block number (Tax bills since
1984).
4. Water, sewer bills.
5. Rent Roll for subject premises (apt. number,
tenants date of initial occupancy, Rental
amount).
6. Any altered building application filed.
7. When/If the sewer lines, electrical system,
water lines and boiler system separated.
8. Copy of Deed.
9. Any other pertinent information regarding the
status of the subject premises."
The file contains no response by the owner to this request.
On August 8 and 20, 1990, the subject premises were inspected by the Division
under the docket number DG210003UC. The inspector found that each building
has separate bell systems, entrances, chimneys and basements. The inspector
was unable to gain access to determine whether the water mains, sewer pipes,
lighting systems, electric meters, or gas connections were separate or
common. However, the inspector found a common boiler (at 2118 Cortelyou
Road) and that the buildings which are adjacent, "share[d] the same roof
space," and had identical front facades.
The Administrator's file also contains a copy of a 1987 inspection report
under docket number K 3103561-R in which the inspector found that the sewers,
electrical systems, gas system, basements, entrances, water systems and roofs
were separate. That inspector also found a common heating system, but did
not comment on the facades. Nevertheless, the inspector concluded that the
"buildings comprise[d] a single multiple dwelling." [As noted above, the
Administrator in that proceeding originally found the premises to be
stabilized but later revoked that order and found them to be exempt, based on
a similar finding in another order (ZBL2100003UC), issued May 25, 1988.]
In order number ZDG210003UC, herein under review, the Administrator found,
based on the October 20, 1987 and August 8, 1990 inspections, and "pursuant"
to the Administrator's Order number ZBL210003UC, issued May 25, 1988, that
the subject apartment is exempt from the Rent Stabilization Code. The
Administrator noted that the courts had found that buildings containing only
one common facility, such as a boiler, do not constitute a horizontal
multiple dwelling within the meaning of Code Section 2520.11(d).
In this petition the tenant contends that the Administrator's order is
DOCKET NO.: EJ210461RT
incorrect and should be reversed because the buildings comprise a horizontal
multiple dwelling for the reasons stated in her answer to the owner's
application. In addition, the tenant alleges that "an inspection of the
exterior of the building shows that the entire structure was built as a
single unit;" that there appear to be only one water main (at 1090 Flatbush)
which supplies water to both buildings; that the dry cleaner at 2118
Cortelyou Road "appears" to have a water tank, the water for which "upon
information and belief" comes from the water main at 1090 Flatbush Avenue.
In answer to the tenant's petition the owner contends the Administrator's
order is correct and should be confirmed because the buildings do not
constitute a horizontal multiple dwelling and therefore the tenant's building
is not subject to the Rent Stabilization Code, being a building with less
than six dwelling units.
The owner agrees that the two buildings are heated by a common boiler, but
asserts that the commonality has only existed since 1986, prior to which
there were separate boilers.
The owner asserts that the buildings were not constructed as a single unit,
citing the DHCR's inspections.
The owner states "upon information and belief" that there are separate water
mains for the two buildings.
Regarding the registration of 1090 Flatbush Avenue with HPD, the owner
asserts that 21-18 Cortelyou Road is not covered by that registration, being
a separate building. 1090 Flatbush Avenue, although having only four
dwelling units is nevertheless classified as a multiple dwelling by HPD but
this fact does not imply that the two buildings constitute a horizontal
multiple dwelling within the meaning of the Rent Stabilization Code.
The owner contends this petition should be decided in accordance with prior
Administrative decisions involving the same premises but different tenants in
which the buildings were found to be separate and not subject to stabiliza
tion. Not to do so would cause "mass confusion and, in effect, rescind three
prior decisions".
In response to the owner's answer the tenant contends that the owner "has
completely overlooked the fact that the original certificate of occupancy
dated April 1, 1925 (sic) indicates that the building consists of seven (7)
[dwelling] units and 9 stores." Attached to the response is a copy of a
certified copy of a certificate of occupancy for 1086/92 Flatbush Avenue,
southwest corner at Cortelyou Road, stating the building has 9 stores and 7
family units. The tenant notes that the 1987 Certificates of Occupancy
submitted by the owner were issued subsequent to the commencement of the
tenant's occupancy and argues that an owner "cannot remove his property from
Rent Stabilization by subsequently changing the certificate of occupancy."
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Also attached to the tenant's response is a copy of the October 20, 1987
inspection report issued under docket number K 3103561-R, cited above, in
which the inspector stated "both buildings comprises of a single multiple
dwelling (sic)."
Finally the tenant argues that the ruling in ZBL2100003UC, involving a
different tenant, "did not raise the issues presently in front of the DHCR
and therefore it is not relevant to this case."
The Commissioner is of the opinion that this proceeding should be remanded to
the Administrator for further processing.
Code Section 2520.11(d) generally excludes from Rent Stabilization buildings
with fewer than six housing accommodations on the date the building first
became subject to the Rent Stabilization Law (RSL). However, the section
further provides that:
"a building shall be deemed to contain six or more
housing accommodations if it was part of a multiple
family garden-type maisonette dwelling complex containing
six or more housing accommodations having common facili
ties such as a sewer line, water main or heating plant
and was operated as a unit under common ownership on the
date the building or complex first became subject to the
RSL, notwithstanding that Certificates of Occupancy were
issued for portions thereof as one or two-family dwell
ings."
The Court of Appeals has affirmed the Division's interpretation that the
corresponding provisions of the RSL and ETPA apply to non-garden type
horizontal multiple dwellings. Salvati v. Eimicke, 537 N.Y.S.2d 16 (Ct. App.
1988), motion for reargument or reconsideration denied, 540 N.Y.S.2d 1006.
If the premises constituted a horizontal multiple dwelling within the meaning
of the Code so as to be subject to stabilization on the base date or any time
thereafter, it would not lose the status if subsequently some or all of the
common facilities were separated. Certainly, the 1987 Certificates of
Occupancy showing four units are insufficient proof of separateness. The Law
and Code are explicit on this issue - even where the certificates were in
effect on the base date.
Accordingly, the Administrator was correct to request proof of when or if the
water, sewer, electric and/or heating facilities were separated. Also
requested was the certificate of occupancy in effect on the base date. The
owner failed to either submit the requested evidence or allege that none
existed.
On appeal the tenant has shown that in 1925 the buildings had a common
certificate of occupancy showing seven dwelling units. However, although the
copy was certified in 1985, it does not necessarily follow that the
certificate was in effect on the base date. There could have been another
certificate issued between 1925 and 1987.
The tenant is correct that the decisions, involving other tenants in the
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subject buildings, which found the premises not to be subject to Stabiliza
tion, are not per se controlling on the tenant-petitioner. The doctrine of
collateral estoppel can not be used against a non-party so as to deny the
non-party of her "day in court."
Furthermore, the Commissioner notes that in order number ZAA200383RV, issued
June 24, 1987, the Administrator granted the tenant-petitioner's complaint of
failure to renew her lease. The owner answered that complaint on the merits,
submitting prior leases which did not name the complainant. Those leases
stated explicitly that the subject apartment was stabilized. [Only in
appealing that order did the owner raise the jurisdictional issue. As stated
above, that appeal is still pending under docket number BG210348RO.]
On the other hand, the owner is correct that a grant of the tenant's
petition, i.e., finding the premises stabilized would either create
inconsistencies within the buildings or require the rescinding of the
conflicting orders.
Accordingly, on remand the Administrator should give notice to all potential
ly effected tenants as well as new or prior owners in all related buildings
that the order on remand will be binding on them, and give each the
opportunity to submit evidence on the issue of jurisdiction. The order on
remand will resolve this issue finally for the buildings as a whole, even if
it has the effect of superseding prior inconsistent orders.
The Commissioner recognizes that this is an extreme remedy. However, the
Commissioner has previously held that this remedy is required to prevent the
confusion and unfairness of having some units in the same complex stabilized
because the complex has been determined by the DHCR to be a horizontal
multiple dwelling of six or more units and to have other units not stabilized
based on a contrary ruling by the Division regarding the same complex. See
Administrative Review Docket Number ARL10651Q/ARL11161Q, issued November 7,
1991.
Furthermore, the Division can reconsider any order on its own initiative if
the order is found to be the result of fraud, illegality or irregularity in
the vital matter. Policy Statement 91-5 defines illegality as "[a]n action
by DHCR which is contrary to the principles of law representing a complete
defect in the proceedings." Surely, a determination that a building or
complex is exempt from the Rent Stabilization Law without notice to all
tenants in the building or complex violates due process. Indeed, Section
2527.3(a) of the Rent Stabilization Code, which codifies this due process
right, requires the DHCR to serve a copy of any application, complaint or any
answer or reply thereto on all parties adversely affected thereby.
In addition, Policy Statement 91-5 defines "irregularity is a vital matter"
as a "[f]ailure by the agency to...comply with established rules of practice
and procedure." Surely the failure to comply with due process and Section
2527.3(a) falls within this definition.
For the reasons stated above it is unnecessary to consider the res judicata
effect of those Administrator's orders which found the complex to be exempt.
On remand the owner will have the opportunity to submit evidence that the
1925 Certificate of Occupancy was not in effect when the building could have
first become subject to Stabilization, presumably May 29, 1974, the effective
date of the Emergency Tenant Protection Act, since Division records show that
the premises were formerly rent controlled. In any case, the Administrator
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should take evidence from all parties on the elements of commonality which
existed on that date. The burden of proof will be on the owner to prove the
building(s) are exempt from the Stabilization Law.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, granted to the extent
of remanding this proceeding to the Rent Administrator for further processing
in accordance with this Order and Opinion. Until and unless an order to the
contrary is issued on remand all the dwelling units of the entire premises
[2112-2122 Cortelyou Road AKA 1086-1088 Flatbush Avenue and 1090-1092
Flatbush Avenue] shall be treated prospectively as stabilized (unless exempt
for other reasons, e.g., coverage by Rent Control). For example, a tenant
covered by a prior order finding his or her apartment not covered by
Stabilization now has the right to, e.g., a stabilized renewal lease at
lawful Guidelines increases over the rent existing on the day of the prior
Guidelines period. However, this present order does not now require a rent
rollback to stabilized levels for a lease entered at a time when a order was
in effect which declared the premises covered by the lease not to be subject
to stabilization.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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