Lyndonville Properties

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Copyright (C) 2002 The New York Law Pub. Co. 2/23/2000 NYLJ 29, (col. 2/23/2000 N.Y.L.J. 29, (col. 2) New York Law Journal Volume 223, Number 35 Copr. 2000 NLP IP Company Wednesday, February 23, 2000 Court Decisions First Judicial Department Supreme Court New York County Ia Part 46 Justice Figueroa LYNDONVILLE PROPERTIES V. NYS DIVISION OF HOUSING AND COMMUNITY RENEWAL QDS:22702137 The DHCR and the Court determined thatthe tenant's indoor garage at 441 West End Avenue, Manhattan was a required service under the Rent Stabilization Law.

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Copyright (C) 2002 The New York Law Pub. Co. 2/23/2000 NYLJ 29, (col. 2/23/2000 N.Y.L.J. 29, (col. 2) New York Law Journal Volume 223, Number 35 Copr. 2000 NLP IP Company Wednesday, February 23, 2000 Court Decisions First Judicial Department Supreme Court New York County Ia Part 46 Justice Figueroa LYNDONVILLE PROPERTIES V. NYS DIVISION OF HOUSING AND COMMUNITY RENEWAL QDS:22702137 In this Article 78 proceeding, Petitioner, the owner of premises located at 441 West End Avenue, Manhattan seeks to annul the July 30, 1999 determination of the New York State Division of Housing and Community Renewal (DHCR), denying administrative review of an overcharge award in favor a tenant residing at the subject premises. Petitioner challenges the Commissioner's determination as being arbitrary and capricious on grounds that the garage space was not a required service under the Rent Stabilization Law. Alternatively, Petitioner argues, even in the Rent Administrator was correcting determining that the garage was a required service under the Rent Stabilization Code, the Commissioner should have found it exempt under Section 2520.6(r)(4)(xi) therein. [FN1] Factual Background On April 12, 1990, Roslyn Willett, the tenant of apartment 15A at the subject premises filed a complaint with the DHCR alleging rent overcharges by Petitioner for a garage space which she had rented since 1971, and claimed approximately $16,000.00 in overcharges. She contended that the monthly charge for her garage space had been raised far more frequently and by a greater percentage than the rent for her apartment. In response, Petitioner asserted that the garage space was not required service under the Rent Stabilization Code and was separate from the tenant's apartment lease, which was subject to rent stabilization. Petitioner further argued that the garage as not intended for the primary use of its building tenants, as demonstrated by the fact that a majority of the garage lessees were non-residents,

and that the garage was constructed after the tenant took occupancy in 1959.

On May 28, 1999, the DHCR issued an Order determining the garage space to be included in the tenancy and rendered and overcharge award, as well as treble damages on behalf of the tenant, which fixing a new monthly garage rental at $165.00. The Landlord's subsequent Petition for Administrative Review was granted to the extent of eliminating the sanction for treble damages, but reaffirming the finding that the garage was a required service subject to rent stabilization. Discussion The legislative purpose of the Rent Stabilization Law (RSL), which regulates rents, service and evictions, was intended to protect tenants from speculative and oppressive rent increases in a housing market in which demand for housing consistently outstripped supply. To guard against property owners' circumventing this legislative intent by imposing added charges for ancillary services, section 26 - 5121 (c)(5) of the RSL mandates that guidelines be established "with respect to such additional rent and related matters as, for example, security deposits, advance rental payments, the use of escalator clauses in leases and provision for increases in rentals for garages and other ancillary facilities, so as to insure that the level of fair rent increases established under this law will not be subverted and made ineffective." Furthermore, section 2520.6 (r)(3) of the Rent Stabilization Code defines required services as including ancillary services, among which garage facilities are expressly enumerated. In Netherland Operating Corporation v. Eimicke, 71 N.Y.2d 802, the Court of Appeals held that a parking space is a required service under the RSL and subject to the limitations of the Code in circumstances where there is common ownership of a rent stabilized building and a parking garage. In the instant case, the Commissioner in denying Petitioner's request for administrative review, took into account that he garage and subject apartment building were co-owned by Petitioner, as well as the first fact that the garage was partially housed in the subject premises, which also provided direct entry and egress to the garage. The task before the Court in an Article 78 proceeding is to determine, on all of the facts before, it whether the Agency charged with administering the Rent Stabilization Laws, has interpreted and applied its regulations rationally.2 Seril v. DHCR, 163 A.D.2d 131, 132 (1st Dept. 1990). If there in a basis in logic for the Agency's determination, the Court is bound to affirm it. Matter of Pell v. Bd of Education, 34 N.Y.2d222. Nothing in the instant case indicates that the DHCR acted arbitrarily or capriciously in holding the garage space to be a required service under the Rent Stabilization Code. Nor do the facts suggest that the DHCR interpreted the RSL incorrectly in determining that Petitioner's garage did not qualify for a primary use exemption. Petitioner's reliance on HLV Associates v. Aparte, 223 A.D.2d 362 to support its position is misplaced. HLV Associates was remanded back to the DHCR by the Appellate Division because the record was deemed insufficient to base a finding, notwithstanding a showing by the owner that a majority of garage spaces were utilized by non-occupants of the building.3 The DHCR deemed this factor less important than the physical proximity of the garage location relative to the apartment building. Since the actual intentions of an owner regarding the intended use of garage when built are too elusive to ascertain, the

Commissioner considered the location of the garage and its proximity to the subject apartment building, which provided direct entry and egress to the garage, as indicative that it was intended for use by the building's tenants. Reliance on such factors tend to thwart unscrupulous building owners who would routinely argue that garages owned by them were not intended for the primary use of their tenants and, thereby, avoid the ambit of the RSL. Petitioner had ample opportunity to put forth his case before the DHCR that the garage was exempt from rent stabilization. Based upon the evidence before it, the Agency adjudged the garage as primarily intended for the use of building tenants. In the instant case, there is ample precedent confirming the administrative agency's authority to determine what constitutes a required service under the Code (see, Matter of Fresh Meadows Associates v. Conciliation and Appeals Board, 42 N.Y.2d 927).4 Similarly, the entitlement to any exemption thereunder involves factual issues that are well within the Agency's own comprehensive (see, Oriental Boulevard v. Conciliation and Appeals Board, 60 N.Y.2d 633; Sterling Ridge Realty Co, Inc. v. DHCR 185 A.S.2d 354). As such, it is outside the scope of a judicial review proceeding for the reviewing Court to substitute its own judgment for that of the DHCR. Peconic Bay Broadcasting Corp. v. Board of Appeals, 99 A.D. 2d 773 (2nd Dept. 1984). Decision For the foregoing reasons, Petitioner's application for Article 78 relief is denied in its entirety. This constitutes the decision and judgment of the Court. FN(1) 9 NYCRR, s2520 et seq. FN(2) Under the Emergency Tenant Protection Act of 1974, the DHCR has plenary power to regulate charges for services ancillary to housing accommodations. In accordance with this power, it has promulgated regulations under which tenants can make application to enforce such rights (see part 2500, 9 NYCRR). FN(3) In the Deputy Commissioner's own words:"[t]o find that the service is provided primarily for the tenants, it is not required that a majority of the parking spaces be used by tenants." In the Matter of the Administrative Appeal of HLV Associates d/b/a Riverdale Estates, Admin. Review Docket #KF610001RP/DD610219RO, dated 4/1/99,p.2. FN(4) Here the Court of Appeals affirmed the ruling of the lower court, which stated that the "question of what constitutes a required service presents a factual issue which is to be determined by the ... administrative agency." Matter of Sherwood Associates v. Conciliation and Appeals Board. NYLJ Sept. 22, 1971, p.2, col. 3). 2/23/2000 NYLJ 29, (col. 2) END OF DOCUMENT

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