ADM. REVIEW DOCKET NO.: AJ 710133 RO
                                  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 
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL OF                              DOCKET NO.: AJ  710133  RO
                      
                                              :  DRO DOCKET NO.:
                                                 RSV      86S-1/149      OM
              S          &          M           Development           Corp.
                                                                   
                                                  

                              PETITIONER      : 
          ------------------------------------X 

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW    
                                          

               On October 3, 1986, the above-named petitioner-owner filed a 
          Petition for Administrative Review against  an  order  issued  on
          September 5, 1986, by the Rent Administrator at 99 Church Street, 
          White Plains, NY, concerning the housing accommodation located at 
          30/40  South  Cole  Avenue,  Spring  Valley,   New   York.    The
          Administrator denied the owner's application for a rent  increase
          based on the installation of a major capital improvement.

               The Commissioner has reviewed all of  the  evidence  in  the
          record and has carefully considered that portion  of  the  record
          relevant to the issue raised by the petition for review.

               The owner commenced this proceeding on  August  1,  1986  by
          filing an application for rent increase based on the installation 
          of major  capital  improvements.   The  owner  alleged  that  the
          Spring Valley Building Department  ordered  the  installation  of
          illuminated exit signs and had issued a violation for failure  to
          comply with the building code.   

               The owner installed the illuminated signs and, at  the  same
          time, installed emergency  lighting  since  electrical  work  was
          required for both.  Said installations  are  the  basis  for  the
          application.  

               The Administrator denied the application on the grounds that 
          the installations did not constitute an MCI. 

               On appeal, the owner again advances the  argument  that  the
          installations meet all the criteria for an MCI (i.e. substantial, 
          ADM. REVIEW DOCKET NO.: AJ 710133 RO

          building-wide and depreciable under the Internal  Revenue  Code).
          Two tenants responded to the petition.  One stated that the 
          Administrator's order should be affirmed because the  exit  signs
          and emergency lights were required by law and the petitioner was
          required to make the improvements.







          ADM. REVIEW DOCKET NO.: AJ 710133 RO
               After a careful consideration of the evidence in the  record
          the Commissioner is of the opinion that the  petition  should  be
          denied. 

               Section   2502.4(a)(2)(iii)   of   the   Tenant   Protection
          Regulations authorizes  the  Division  to  grant  an  appropriate
          adjustment in the legal regulated rent where it finds that  there
          has been since  January  1,  1974  a  major  capital  improvement
          required for the operation, preservation or  maintenance  of  the
          structure.     

               The installation made in the instant case, illuminated  exit
          signs and emergency lighting, cannot be considered  the  type  of
          improvement  required  for   the   operation,   preservation   or
          maintenance of the building.  The fact that  the  work  was  done
          pursuant to a mandate imposed by  local  law  does  not  make  an
          installation eligible  for  a  rent  increase  if  it  would  not
          otherwise be considered a major capital  improvement  within  the
          meaning of the Tenant Protection Regulations.

               The  Administrator  was   correct   in   ruling   that   the
          installation of emergency lighting and exit signs, regardless  of
          the reason for their installation, does not qualify  as  an  MCI.
          The order appealed from is, therefore, affirmed.

               THEREFORE,  in  accordance  with   the   Tenant   Protection
          Regulations, and the Emergency Tenant Protection Act of 1974,  it
          is

               ORDERED, that this proceeding be, and the same hereby is, 
          denied and that the Rent Administrator's order be, and  the  same
          hereby is, affirmed.

          ISSUED:





                                                                        
                                          ELLIOT SANDER
                                          Deputy Commissioner




                                                    
    

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