ADM. REVIEW DOCKET NOS.: AK 430483 RO; AK 430532 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
          APPEALS     OF                                  DOCKET      NOS.:
                                                 AK       430483        RO,
                                                 AK 430532 RO         
                                              :
                                                 DRO      ORDER       NOS.:
                                                 LCS-000869-OM, LCS-000651/ 
                                                 000696-OM 
           152 REALTY COMPANY
                                                  

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

              ORDER AND OPINION DENYING ONE PETITION FOR ADMINISTRATIVE     
                 REVIEW AND REMANDING ANOTHER PROCEEDING TO THE RENT 
                                ADMINISTRATOR                            


               These petitions have  been  consolidated  pursuant  to  Code
          Section 2529.1(c) as they involve common issues of law or fact.

               On November 19, 1986 and November 24, 1986  the  above-named
          petitioner-owner  filed  Petitions  for   Administrative   Review
          against orders issued on October 16, 1986 and October 20, 1986 by 
          the Rent Administrator, 92-31 Union  Hall  Street,  Jamaica,  New
          York, concerning the housing accommodations known as  152  Eighth
          Avenue, New York, New York, wherein the Administrator  determined
          that the owner was entitled to a rent increase based upon various 
          major capital improvements  but  disallowed  rent  increases  for
          certain other improvements.  

               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 appeals.  

               The owner commenced these proceedings on June 20,  1985  and
          July 3, 1985 by filing applications for  a  rent  increase  based
          upon various improvements to the subject premises, including:   a
          new oil burner; fireproof doors; marble stairs; interc m  system-
          wiring installed 1980, completed 1984; replacement windows for  a
          basement apartment  and  stairwells;  new  oil  fired  hot  water
          heater; new guard railing; waterproofing where necessary 


          completed 1983; waterproofing  where  necessary  completed  1985;
          cleaning and pointing front of building; roof resurfacing;  fence
          around roof; and new drains and leader lines on roof.  The owner 
          provided copies of cancelled checks, invoices,  and  contractor's
          agreements in support of costs incurred.   

               Tenants affected  thereby  were  notified  and  afforded  an






          ADM. REVIEW DOCKET NOS.: AK 430483 RO; AK 430532 RO
          opportunity  to  respond  to  the  applications.   Three  tenants
          objected, asserting, in pertinent part, that  some  of  the  work
          done was ordinary repairs.   

               In  the  orders  here  under   review,   the   Administrator
          determined that the oil fired  hot  water  heater,  waterproofing
          where  necessary  completed  in   1983,   and   fireproof   doors
          constituted eligible major capital improvements pursuant  to  the
          Rent Stabilization Code and the Rent  and  Eviction  Regulations.
          Appropriate rent increases for the rent controlled and  the  rent
          stabilized apartments were calculated based upon allowable  costs
          for qualifying  improvements  of  $7,650.00.   The  Administrator
          disallowed certain costs for installations because they  did  not
          constitute major  capital  improvements  and  disallowed  certain
          other costs for installations  because  they  were  not  properly
          substantiated  by  supporting  documentation,  e.g.,  oil  burner
          permits and approvals.

               In   the   petitions,   the   owner   contends   that    the
          Administrator's order should be modified  because  all  the  work
          performed qualifies as major capital improvements or as  cosmetic
          improvements  made  in   conjunction   with   a   major   capital
          improvement.  In particular, the owner asserts that  the  finding
          with respect to waterproofing where necessary completed 1985  and
          cleaning and pointing front of building is inconsistent since all 
          that was necessary was done in each  instance.   The  owner  also
          contends that the fact that a  new  roof  was  installed  in  two
          stages should not negate its qualification  as  a  major  capital
          improvement, and as none  previously  existed,  increases  should
          have been granted for the intercom bell and voice system.  As  to
          the items disqualified by lack of supporting  documentation,  the
          owner stated that all required documentation had been provided.  

               Although afforded the opportunity to do so, the tenants  did
          not reply to the petitions.

               The Commissioner is of the opinion that the petition  number
          AK 430483-RO should be denied and petition  number  AK  430532-RO
          granted  to  the  extent  of  remanding  proceeding  number   LCS
          000651/000696-OM to the Administrator.



               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 Law 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, for 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. 

               Upon a review of all the evidence, the  Commissioner  notes,
          contrary to the petitioner's assertion, that  the  alleged  major
          capital  improvements,  which  were  found  ineligible   by   the






          ADM. REVIEW DOCKET NOS.: AK 430483 RO; AK 430532 RO
          Administrator, do not meet the criteria  established  under  Code
          section 2522.4  or  section  2202.4  of  the  Rent  and  Eviction
          Regulations and thus are not eligible for a rent  increase  based
          thereon.  With respect to waterproofing where necessary completed 
          in  1985  and  cleaning  and  pointing  front  of  building,  the
          Commissioner notes that waterproofing and pointing may qualify as 
          a major capital  improvement  if  such  work  conforms  with  the
          pertinent sections of the Regulations and Code.  However, in  the
          instant case, the owner claims that  cleaning  and  pointing  was
          done in 1985 and that waterproofing where necessary was  done  in
          both 1983 and in 1985.  An examination of  the  record  indicates
          some duplication of work performed, thus indicating that not  all
          that was necessary in 1983  was  done  and/or  otherwise  raising
          questions regarding the quality of the work  performed  in  1983.
          The Commissioner notes that the Administrator could  have  denied
          both the 1983 and  1985  exterior  work  on  the  basis  that  it
          constituted  a  piecemeal  improvement,  which  concept  will  be
          discussed below.   Instead,  the  Administrator  granted  an  MCI
          increase for the 1983 work but denied an increase  for  the  1985
          work, at least in part, because it  followed  the  1983  work  so
          closely.  The  owner  has  failed  to  prove  any  error  by  the
          Administrator on this issue. 

               With respect to the new roof installed in  two  stages,  the
          Commissioner notes that one fourth of the roof was resurfaced  in
          1980 and the remainder was completed in 1985.   The  Commissioner
          notes that it is the longstanding policy  of  the  Division  that
          improvements installed in piecemeal fashion do  not  qualify  for
          MCI rent increases.  Similarly, the  intercom  system  which  was
          installed piecemeal in 1980 and in 1984 does not  qualify  as  an
          eligible major capital improvement.



               Regarding the new burner, the  Commissioner  notes  that  on
          September 23, 1986 the owner advised the  Administrator  that  it
          had not been aware of the need for the certificates  of  approval
          but would apply for same (or had recently applied for same). On 
          August 12, 1986 the owner requested a 90 day extension of time in 
          order to receive the  governmental  approvals  requested  by  the
          Administrator on August 4, 1986 in a 20-day notice.      

               The Administrator did not deny this  request.  Nevertheless,
          on October 20, 1986 the Administrator  issued  Order  Number  LCS
          000651/000696-OM in which the MCI increase  for  the  burner  was
          denied based on the lack of governmental approvals.   The  record
          shows that the  approvals  were  granted  by  the  Department  of
          Buildings on October 27, 1986, i.e., within the requested 90  day
          period.  

               Based on the foregoing, the Commissioner hereby  finds  that
          proceeding number LCS 000651/000696-OM should be remanded for  de
          novo processing on the merits of the owner's application  for  an
          MCI increase for the burner.   No  other  improvement  should  be
          reconsidered on remand. 

               THEREFORE, in accordance with the provisions of the Rent and 
          Eviction Regulations and the Rent Stabilization Law and Code,  it
          is






          ADM. REVIEW DOCKET NOS.: AK 430483 RO; AK 430532 RO

               ORDERED, that petition number AK 430483-RO be, and the  same
          hereby is, denied, and  that  petition  number  AK  430532-RO  is
          granted to the extent  of  remanding  Administrator's  proceeding
          number LCS 000651/000696-OM for further processing  with  respect
          to the burner only, in accordance with this Order and Opinion. 

          ISSUED:





                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner




                                                    
    

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