AJ 110309 RT
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          APPEAL OF                               DOCKET NO.:  AJ 110309 RT

                     FELICIA POZIT,
                                                  DRO DOCKET NO.:  ZQS 000843 OM


                           REMANDING PROCEEDING ON APPEAL

          On October 27, 1986 the above-named  petitioner-tenant  filed  an
          Administrative Appeal against an order issued  on  September  22,
          1986 by the District Rent Administrator  (Gertz  Plaza,  Jamaica,
          New York) concerning the housing accommodations  known  as  65-09
          99th Street, Queens, New York, Various  Apartments,  wherein  the
          Administrator  granted  Major  Capital  Improvement  (MCI)   rent
          increases for the stabilized apartments in the  subject  premises
          based on  the  installation  of  new  boiler/burner,  replacement
          windows, compactor, waterproofing, and roofing at the premises.

          The owner commenced  the  proceeding  below  by  filing  its  MCI
          application with  the  Administrator  in  October  of  1985.   In
          response to the application, various  tenants  submitted  answers
          stating, among other things, that:

               (1)  The new windows are defective;

               (2)  there is a discrepancy between  the  number  of
                    windows in  the  building  and  the  number  of
                    windows stated as being replaced;

               (3)  there should  be  a  Division  of  Housing  and
                    Community  Renewal  (DHCR)  inspection  of  the

               (4)  only one half of the  building  benefited  from
                    a single new compactor; and

               (5)  there are two  professional  apartments  and  a
                    garage at the subject  premises,  whose  rental
                    should be included in the rent  roll  submitted
                    by the owner.

          The District Rent Administrator's order, appealed herein, granted 

          AJ 110309 RT
          the landlord's application, stating that the tenants'  objections
          were not tenable.

          On appeal, the petitioner-tenant contends, in substance, that:

               (A)  A number  of  tenants  in  the  building  were  not
                    served with the MCI application;

               (B)  the installation  of  the  improvements  masked
                    years of  failure  to  repair  and  constituted
                    deferred maintenance;

               (C)   the  landlord  is  unjustly  enriched  by  the
                    addition of the MCI increase to the  base  rent
                    as a permanent increment;

               (D)  the landlord will be unjustly enriched  by  tax
                    abatements which the DHCR failed to  take  into
                    account in fixing the MCI increases;

               (E)  in  many  instances,  the  window  installation
                    was shoddy and incomplete;

               (F)   the  heat  and  hot  water  services  in   the
                    building are insufficient;

               (G)  the  landlord  contracted  for  windows  at  an
                    inflated price;

               (H)  the landlord has  exaggerated  the  numbers  of
                    windows   claimed   in    the    subject    MCI

               (I)  the landlord's MCI application  did  not  state
                    the percentage of the  increase  requested  for
                    the stabilized tenants  but  instead  stated  a
                    dollar per room amount which is  based  on  the
                    rent control formula;

               (J)  the replacement of  a  single  compactor  which
                    only covers one half  of  the  building  cannot
                    constitute a building-wide improvement; and

               (K)  the landlord  filed  an  inaccurate  rent  roll
                    which  failed   to   reflect   the   commercial
                    apartments in the building.

          In support of her contentions, the petitioner  submitted  a  copy
          of an advertisement which quoted a window price package.

          In response to the tenant's appeal, the  owner  filed  an  answer
          stating, in substance, that:

          (I)       Copies of the owner's application  were  served
                    on all the tenants of record  at  the  time  of
                    the application;

          (II)      the  owner  has  observed  all  of  the  DHCR's

          AJ 110309 RT
          rules   and   regulations   relating   to   MCI
                    applications,     and     a     petition     or
                    administrative  review  is   not   the   proper
                    forum in  which  to  raise  objections  to  the
                    rules and regulations of DHCR;

          (III)      the  subject  building  has   been   properly
                    maintained  and  it  is  not  unusual  that  a
                    building's   boiler   and   windows    require
                    replacement after more than 35 years of use;

          (IV)       all  of   the   required   documentation   was
                    submitted by the owner;

          (V)       the  tenants  have  not  complained  about  the
                    quality of the work;

          (VI)      there are no problems with  the  heat  and  hot
                    water in the  building,  the  landlord  is  not
                    aware  of  any  tenant  complaints,   and   the
                    petitioner  did  not  identify  any  apartments
                    where  such  services   are   alleged   to   be

          (VII)     the windows  installed  in  the  building  are
                    competitive in price with comparable  windows,
                    and it  is  impossible  to  determine  if  the
                    windows  cited  by  the  tenants  are  at  all
                    comparable to the  windows  installed  by  the

          (VIII)    the landlord did not exaggerate the number  of
                    windows installed;

          (IX)      the  tenants  were  properly  notified  of  the
                    percentage  rent   increase   sought   by   the
                    landlord  in  Supplement  III  to  Form  RA-79,
                    which was always available for  review  by  the
                    tenants  in  the   office   of   the   building

          (X)       the replacement  of  a  single  compactor  does
                    constitute  an  improvement   to   the   entire
                    building; and

          (XI)      the  owner's  application  disclosed  the  only
                    two professional apartments in the building.

          After a careful consideration of the entire  evidence  of  record
          the Commissioner is of the opinion that the administrative appeal 
          should be granted in part and this  proceeding  remanded  to  the
          Administrator for further  processing  in  accordance  with  this
          order and opinion.

          The record discloses that the owner  submitted  documentation  in
          the  proceeding  below  to  substantiate  the  MCI   application,
          including   copies   of   contracts,   proposals,    contractors'
          certifications, cancelled checks, and governmental approvals  and

          AJ 110309 RT
          sign-offs for the work in question.  Furthermore, the owner filed 
          a certification of service upon the tenants of a copy of the  MCI
          application and numerous tenants filed answers in the  proceeding

          As to the tenants' contention pertaining to the permanent  nature
          of the increases granted, the  New  York  Court  of  Appeals  has
          concluded  that  the  Rent  Stabilization  Law  authorized   this
          Division to grant permanent rent increases for MCI's and that the 
          law does not limit the time during which  the  increases  can  be
          imposed.  In the Matter of Ansonia Residents Association, et  al,
          v. DHCR, et al.  In addition, the provisions of the law regarding 
          the partial offset of tax benefits against an MCI increase  apply
          only to improvements commenced after June 28, 1988.  Finally, the 
          tenant failed to establish by adequate documentation (such  as  a
          specific estimate for the window  installation  involved  herein)
          that the window installation costs were excessive.

          However, the record also discloses that the order appealed herein 
          failed to consider the contentions raised  by  the  tenants  with
          regard to:

               (a)  The annual commercial rents  collected  by  the

               (b)  the quality of the window installation;

               (c)  the number of windows actually replaced; and

               (d)  the  compactor  installation  not  serving  the
                    entire building.

          Thus, the Commissioner is of the  opinion  that  this  proceeding
          should  be  remanded  to  the  Administrator  for  such   further
          processing as is necessary to resolve these issues.

          THEREFORE, in accordance with the applicable  provisions  of  the
          Rent Stabilization Law and Code and  Operational  Bulletin  84-1,
          it is

          ORDERED, that this petition be and the same hereby is granted  to
          the extent of remanding this  proceeding  to  the  District  Rent
          Administrator for further  processing  in  accordance  with  this
          order and  opinion.   The  automatic  stay  of  so  much  of  the
          District Rent Administrator's order  as  directed  a  retroactive
          rent increase is hereby continued until a  new  order  is  issued
          upon remand.  However, the Administrator's determination as to  a
          prospective rent increase is  not  stayed  and  shall  remain  in
          effect until the Administrator issues a new Order upon remand.

                                                  ELLIOT SANDER
                                                  Deputy Commissioner

          AJ 110309 RT

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