DOC. NO.: BC 110198-RT et al.
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                           :  DOCKET NOS. BC 110198-RT;
                    VARIOUS TENANTS OF                       BC 110204-RT;
                    REGENTS PARK GARDENS,                    BC 110205-RT;
                              PETITIONERS     :              BF 110315-RT
          ------------------------------------X  DRO DOCKET NOS.:
                                                 Z QS 000283-OM [Section A]
                                                 Z QS 010283-OM [Section A]
                                                 Z QS 010179-OM [Section A]
                                                 Z QS 000179-OM [Section B]
                                                 Z QS 020179-OM [Section B]
                                                 Z QS 010504-OM [Section A]
                                                 Z QS 000504-OM [Section B]
                                                 Z QS 020504-OM [Section B]
                                                 Z QS 000621-OM [Section A]
                                                 Z QS 010621-OM [Section B]


          On March 17, 1987 and June 28, 1987 the petitioner-tenants filed 
          Petitions for Administrative Review against orders issued in 
          February and May, 1987 by the District Rent Administrator, 92-31 
          Union Hall Street, Jamaica, New York concerning housing 
          accommodations known as Regents Park Gardens, Kew Gardens, New 

          While the owner's application regarding new boilers and hot water 
          heaters was processed as Docket No. QS 000283-OM for all 14 
          buildings, issued copies exist for Section A [Buildings 1-8] as 
          both Z QS 000283-OM and Z QS 010283-OM, and Order No. Z QS 020283- 
          OM was issued for Section B [Buildings 9-14].   The DHCR's 
          computerized indexing system shows QS 010283-OM as having been 
          deleted in favor of QS 000283-OM.  The tenants' petition (Docket 
          No. BC 110204-RT) against No. Z QS 010283-OM will be taken to be an 
          appeal of both Section A order numbers, but not of the Section B 
          order number as they filed their petition several months before 
          that order was issued.

          DOC. NO.: BC 110198-RT et al.

          While the owner's application regarding new windows was processed 
          as Docket No. QS 010179-OM for all 14 buildings, Order No. Z QS 
          010179-OM was issued for Section A, and it appears that orders may 
          have been issued for Section B as Z QS 000179-OM and/or Z QS 
          020179-OM.  Because of the confusion of docket numbers, the 
          tenants' petition (Docket No. BC 110198-RT) against Order No. Z QS 
          010179-OM will be taken to be an appeal of any and all of those 
          dockets, particularly since the petition incorporates by reference 
          their answer in Docket No. QS 000179-OM.

          While the owner's application regarding electrical work was 
          processed as Docket No. QS 000504-OM, Order No. Z QS 010504-OM was 
          issued for Section A, and (unissued) copies of the order for 
          Section B bear individual docket numbers of Z QS 000504-OM and Z
          QS 020504-OM.  The tenants' appeal (Docket No. BC 110205-RT) 
          against Order No. Z QS 010504-OM will be taken to be an appeal of 
          any and all of these dockets.

          While the owner's application regarding new doors was processed as 
          Docket No. QS 000621-OM, Order No. Z QS 000621-OM was issued for 
          Section A and Order No. Z QS 010621-OM was issued for Section B.  
          The tenants' petition (Docket No. BF 110315-RT) against Docket No. 
          Z QS 000621-OM will be taken to be an appeal of both orders.

          The applicable section of the Law is Section 9 NYCRR 2522.4 of 
          the Rent Stabilization Code.

          These proceedings are being consolidated since they involve common 
          issues of law and fact.

          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.

          On January 17, 1985 the owner completed the filing of an 
          application (Docket No. QS 000283-OM) to increase the stabilized 
          rents based upon major capital improvements consisting of the 
          installation of new boilers and hot water heaters.  The owner 
          submitted documentary evidence showing that it had made 
          expenditures totalling approximately $540,000.00 for said 
          installations in all 14 buildings.  The application included a
           "Master Scope of Work" approximately 100 pages in length, 
          including a "Standard Form of Agreement Between Kraus Construction 
          Inc., Contractor and Subcontractors. "  In answer, the tenants 
          requested a full-scale audit of both the merits of the application 
          and of the finances underlying the application,

          particularly because of the owner's hiding from the face of the  
          application the involvement of his own construction company as 

          DOC. NO.: BC 110198-RT et al.

          prime contractor.  They also cited a 1980 audit by the Comptroller 
          of the City of New York in which the owner was cited for passing 
          along artificially-inflated operating costs to tenants of a 
          Mitchell-Lama development through the use of wholly-owned service 
          In an order (Z QS 010283-OM and/or Z QS 000283-OM) issued on 
          February 18, 1987 the District Rent Administrator made a finding 
          "that the tenants' responses had contained "[n]o relevant complaint 
          pertaining to the installations," and granted an increase of 9.16% 
          in the rent of the stabilized apartments of Section A for the 
          installation of new boilers and water heaters,  effective March 1, 
          1985.  On August 12, 1987 the Administrator issued an order (No. Z 
          QS 020283-OM) granting an increase of 7.28% for Section B, 
          effective March 1, 1985.  (The tenants did not appeal that order.)

          In their March 17, 1987 petition (Docket No. BC 110198-RT) against 
          the February 18, 1987 order for Section A, the tenants contend in 
          substance that the Administrator's one sentence finding of no 
          relevant complaint is not a finding of fact nor a conclusion of law 
          and is therefore violative of the State Administrative Procedure 
          Act.  The tenants also annex and incorporate their omnibus answer 
          in Docket Nos. QS 000179-OM, QS 000194-OM, QS 000283-OM and QS 
          000504-OM as part of their petition and allege that, as referred to 
          in the owner's answer to
          Docket Nos. ART 12424-Q/ART 12505-Q, the owner submitted a written 
          response to the omnibus answer, which written response was never 
          served on the tenants or their attorney.  The omnibus answer 
          contends in substance that the DHCR may not permit Major Capital 
          Improvement (M.C.I.) increases in excess of 6%, while the owner in 
          this and other dockets is applying for 56.1% worth of increases; 
          that M.C.I. increases do not become part of the base rent; that 
          Herman Kraus' sworn answer on his M.C.I. application that there is 
          no relationship financially or otherwise between the owner and any 
          company listed is a flagrant act of misrepresentation, since the 
          "Scope of Work" filed with the DHCR but not served on any tenant 
          reveals that the companies listed as "contractors" are actually 
          subcontractors of the prime contractor, the owner's own company 
          Kraus Construction, and since no financial detail of payments made 
          to Kraus Construction is disclosed even though Kraus has control 
          over every detail of the
          performance work and manner of payment; that Mr. Kraus is 
          concealing all details of the contract between himself as owner

          and himself as President of Kraus Construction Co., just as he did 
          in another building owned by him as shown by a 1980 New York City 
          Comptroller's audit; that the owner should disclose the details of 
          the financing to ensure that the tenants are not being required to 

          DOC. NO.: BC 110198-RT et al.

          pay for it; that the tenants should not have to pay for architect 
          services mentioned, without cost being specified, in the contract; 
          and that no notice has been taken of Rent Stabilization Law Section 
          26.511(c)(6), which prohibits M.C.I. increases to the extent that 
          they result in a profit on equity greater than 8 1/2%.  In 
          responding to the individual applications for M.C.I. increases, the 
          omnibus answer also asserts in substance that the application 
          regarding pointing is defective in that the only reason it gives 
          for the work is "as per contract"; that the certification that the 
          entire building was inspected and all necessary pointing work was 
          done is defective as it refers to only one building and is not a 
          certification of $251,300.00 worth of work allegedly performed on 
          a 14- building complex; that the application referred only to 
          pointing although the cost charged also included waterproofing; 
          that unrelated items such as scaffolding, masonry res mtoration and 
          "alteration of existing work" are buried in the application 
          regarding windows; that the owner has not provided the required 
          information about the age of the windows being replaced; that the 
          owner did not give notice of the amount of increase sought for the 
          windows; that Page 2 of the application in Docket No. QS 000504-OM 
          was omitted from the material sent to the tenants, thus denying 
          them an opportunity to know what the proposed improvement was and 
          to respond; that the application regarding boilers and water 
          heaters did not state the age or condition of the old ones, but 
          instead gave "as per contract" as the reason for their replacement; 
          that new boilers had been installed by the prior owner in 1973, so 
          the 20-year useful life of the equipment had not expired; and that 
          the subcontractor named in the owner's application is not the same 
          one named in Schedule C of "Scope of Work."

          The owner did not submit an answer to this petition (or the other 
          three petitions being considered herein), although given an 
          opportunity to do so.

          On November 7, 1987 the owner completed the filing of an 
          application (No. QS 000179-OM) to increase the stabilized rents 
          based on the expenditure of approximately $430,000 for new windows.  
          The application included a "Master Scope of Work."

          In an order (No. Z QS 010179-OM) issued on February 12, 1987 the 
          Administrator made a finding of "[n]o relevant complaint pertaining 
          to the installation," and granted an increase of 6.45% for Section 
          A effective January 1, 1985.  While the file for Section B does not 
          contain an issued copy of an order, it does contain unsigned 

          DOC. NO.: BC 110198-RT et al.

          orders, under Docket Nos. Z QS 000179-OM and Z QS 020179-OM, for a 
          6.53% increase effective January 1, 1985.

          The tenants' petition (Docket No. BC 110204-RT) against No. Z QS 
          010179-OM is identical to the petition in Docket No. BC 110198-RT.

          On March 15, 1987 the owner completed the filing of an application 
          (Docket No. QS 000504-OM) to increase the stabilized rents based 
          upon the expenditure of approximately $1,345,000 for
          electrical upgrading.  The application included a "Master Scope of 

          On February 12, 1987 an order (No. Z QS 010504-OM) was issued 
          granting a rent increase of 20.89% for Section A.  While the file 
          does not contain a copy of any issued order for Section B, an 
          unsigned order (No. Z QS 020504-OM, changed by hand to Z QS 000504- 
          OM) lists a rent increase of 19.59% for Section B, effective May 1, 

          The tenants' petition (Docket No. BC 110205-RT) against No. Z QS 
          010504-OM is identical to the petition in Docket No. BC 110198-RT, 
          with the addition of an added emphasis on the claim that the 
          underlying alleged improvement in Docket No. QS 010504-OM was not
          identified in the owner's application.  [The application on file at 
          the DHCR does contain "Page Two" identifying the work, as well as 
          the "contractor and/or Vendor Information" supplement identifying 
          the nature of the work, the contractors and the cost.]

          On July 12, 1985 the owner completed the filing of an application 
          (Docket No. QS 000621-OM) for a rent increase based on the 
          expenditure of $401,060.94 for new doors.  The only answer from the 
          tenants contained in the available files is a 2-page letter from 
          their attorney questioning the financial involvement of Kraus 
          Construction and the inclusion of unrelated items in the contract, 
          and a 60-page Comptroller's audit.  On May 25, 1987 orders were 
          issued granting a rent increase of 5.86% for Section

          A, effective September 1, 1985, based on allowable costs of 
          $202,336.14, and of 5.80 % for Section B, based on allowable costs 
          of $187,082.24.  The orders each excluded over $5,000 in sales 
          taxes from allowable expenditures.  The order also found "[n]o 
          relevant complaint pertaining to the installation."  The order for 
          Section B was issued as Order No. Z QS 010621-OM.

          In their petition (Docket No. BF 110315-RT) against No. Z QS 

          DOC. NO.: BC 110198-RT et al.

          000621-OM, the tenants raise substantially the same points as in 
          their other petitions.  They also contend, in a copy of an answer 
          dated March 1, 1986 but not contained in available files, that all 
          apartments did not benefit equally, as some doors cost $1,095.00 
          while others cost $110.00; that the tenants should not have to pay 
          for door frames, buzzers, key locks and latches; that the 
          contractor has not identified his signature to certify that the 
          work was actually performed [while there is no company name on 
          section B of the contractor supplement of the owner's application, 
          the only contractor named anywhere on the page is Finest Ceiling 
          and Wallboard Company, and the signature is the same as that of 
          Aron Ostreicher, President of Finest Ceiling and Wallboard Company, 
          in Schedule C of the Section A contract]; that the contract 
          includes items, such as scaffolding, cleaning and
          removal of debris, and the daily services of an experienced 
          superintendent, that are not legitimate expense items for an 
          M.C.I.; that a bill from Metropolitan Fire Door raises questions 
          about the bona fides of the work because it gives only "Capital 
          Improvement" as the reason for failure to charge tax; that there 
          are no receipts on file for the alleged installation of new 
          vestibules; and that descriptions of the companies supplying or 
          installing doors duplicate each other.

          While the files for the proceedings under appeal do not contain any 
          response by the owner to the tenants' omnibus answer, the file of 
          another proceeding (Docket No. QS 000016-OM) does contain a 
          response by the owner to a tenants' answer that is generally 
          similar to the omnibus answer.  Because the owner's response is 
          referred to in several of the tenants' petitions (wherein they 
          claim they never saw the responses, [although the response was 
          submitted in QS 000016-OM and not in the proceedings under 
          appeal]), and because it deals with similar issues in a proceeding 
          similar to the ones under appeal, that proceeding is hereby set 
          forth in detail.

          On August 13, 1984 the owner completed the filing of an application 
          (Docket No. QS 000016-OM) to increase the stabilized rents based 
          upon the expenditure of approximately $1,128,000 for new roofs.  
          The application included a "Master Scope of Work."  In addition to 

          individual replies not relevant to the question of the owner's 
          entitlement to a rent increase, the tenants enclosed an early 
          version of what later became the omnibus answer allegedly submitted 
          in the proceedings considered in this appeal.  In a response dated 
          January 6, 1986 the owner contended that, while Kraus Construction 
          acted as the General Contractor, the owner did not apply for an 
          M.C.I. increase on the basis of a General Contractor's fee, but 
          solely bore the cost of the expenses of Kraus Construction; that 
          the only items applied for related to the work done by independent 
          subcontractors with no relation to Kraus Construction; that the 
          1980 audit of Kraus Management by the Comptroller's office was 

          DOC. NO.: BC 110198-RT et al.

          irrelevant; that in any event the quotation criticizing Kraus 
          Management was taken out of context; that construction contracts 
          routinely describe the overall scope of a project to enable 
          coordination of work between subcontractors; that only two sections 
          of the contract actually specify the roofing work to be done by 
          each subcontractor; that pointing work was applied for under a 
          separate application; that the owner has employed architects, 
          engineers and attorneys at its own expense and has not included the 
          cost in the MCI application; that it is common practice in the 
          construction industry for a portion of the contract to be withheld 
          and paid only after completion of the work; that the subcontractors 
          were eventually paid in full; that the tenants' leases do allow 
          M.C.I. increases; and that the 6% limitation and additional 
          requirements concerning mortgage debt service and fair market value 
          refer to hardship increases rather than M.C.I. increases.

          In orders issued on July 7, 1986 the District Rent Administrator 
          granted increases of 16.53% and 16.89% for Sections A and B 
          respectively, effective as of October 1, 1984.

          The tenants appealed these orders in Docket Nos. ART 12505-Q and 
          ART 12424-Q.  In an order issued on September 21, 1989 the 
          Commissioner remanded the proceeding for further processing to 
          evaluate the validity of the costs claimed by the owner since the 
          owner, when requested to submit a breakdown of costs, submitted 
          only one-sentence statements from two of the three roofing 

          Upon remand the proceeding was assigned Docket No. DJ 130017-RP.  
          The owner submitted a report from an independent roofing consultant 
          concluding that the cost per square foot of the roofing was not 
          unreasonable, as well as letters from two of the roofing 
          contractors breaking down costs of their work.  In an order issued 
          on March 13, 1991 the Rent Administrator affirmed the granting of 
          the rent increases for the new roofs, although it noted that the 
          increase was not collectible during a 21-month period because of a 
          rent reduction order.  Neither the tenants nor the owner appealed 
          this order.
          In a similar manner an order (No. Z QS 010194-OM) was issued on 
          July 31, 1987 granting a rent increase of 3.86% effective January 
          1, 1985 for brick pointing in Section A.   An order (No. Z QS 
          020194-OM) was issued on August 12, 1987 granting a rent increase 
          of 3.54% for Section B, effective January 1, 1985.  These orders 
          were appealed in Docket No. BI 110189-RT (SJR 2904).  In answer to 
          the petition the owner contended among other things that its 
          attorney's response to the tenants' omnibus answer was available to 
          the tenants at the DHCR and did not have to be specifically 
          furnished to the tenants; that no part of the M.C.I.  application 
          reflected a claim for a general contractor's fee; that the owner 
          employed architects, engineers and attorneys at its own cost; and 
          that waterproofing was within the scope of the pointing contract.

          DOC. NO.: BC 110198-RT et al.

          An order was issued on March 29, 1989 remanding the proceeding.  
          Upon remand the proceeding was assigned Docket No. DD 130044-RP.  
          The owner submitted an affidavit from a Professional Engineer 
          stating that he had advised the owner in February, 1984 that 
          brickpointing was required throughout the apartment complex.  In an 
          order issued on January 2, 1990 the Rent Administrator affirmed the 
          granting of a 3.86% increase for the $134,500.00 in pointing work 
          in Section A, although the order noted that the increase was not 
          collectible during a 21-month period because of a rent reduction 
          order.  Neither the tenants nor the owner appealed that order.

          The Commissioner is of the opinion that these petitions should be 
          denied in part, and that the proceedings should be remanded to the 
          Administrator for further processing.

          Section 2522.4(a) of the Rent Stabilization Code provides for  rent 
          increases based on building-wide major capital improvements, where 
          the items being replaced are past their useful life.  The rent 
          increases are to be based on the actual reasonable costs of
          eligible improvements.  If the work is done by an entity or 
          entities related to the owner, then a closer scrutiny of the costs 
          is required.  If the costs claimed on the owner's application 
          represented amounts paid to Kraus Construction, with Kraus 
          Construction then paying less than those total amounts to 
          subcontractors, after retaining amounts for its profit, overhead 
          and costs including fees of architects and engineers, as well as 
          finance charges, the tenants would be correct about the need for
          further inquiry.  However, the owner's applications requested rent 
          increases based only on the amounts actually paid by Regent's Park 
          Gardens directly to subcontractors or suppliers.  While the owner 
          may have made other payments to architects, engineers, banks, 
          and/or Kraus Construction, such payments would not be relevant to 
          the present proceedings since they are not included in the owner's 
          applications and the tenants are thus not being asked to pay for 
          them.  The tenants have not alleged that the subcontractors, on

          whose charges the requested rent increases were based, have any 
          relationship to the owner, so there is no reason to believe that 
          the costs are not reasonable ones based on arms-length 
          transactions.  (In fact, in the MCI proceeding that was remanded to 
          look into the reasonableness of the cost of new roofs, it was found 
          that the cost was indeed appropriate, as might have been expected 
          of work done by an independent subcontractor.)  The 
          tenants'interpretation of the construction contracts as making the 
          employees of the subcontractors practically employees of the prime 
          contractor is based on a misapprehension of the normal prime 
          contractor/subcontractor relationship.  The subcontractor remains 
          an independent company responsible for delivering the agreed-upon 
          work and materials at the agreed-upon contract price.  This is a 
          different situation than the one involved in the 1980 Comptroller's 

          DOC. NO.: BC 110198-RT et al.

          audit, where the work and services were being provided by Mr. 
          Kraus' companies,
          and where even materials and supplies were being provided through 
          his companies after a markup over the cost to his companies.

          The tenants put misplaced reliance on Section YY51-6.0(c)(6) of the 
          New York City Administrative Code [Section 26.511(c)(6) of the Rent 
          Stabilization Law] in contending that an M.C.I. increase may not 
          result in a profit on equity of more than 8 1/2%.  The referenced 
          section refers to "increases in excess of the level of fair rent 
          increase established under this law."  The owner was asking, as an 
          entitlement under the law, for an increase in the monthly rent of 
          1/60 of the actual cost of eligible improvements.  The 8 1/2% 
          profit limitation would come into play only if the owner was asking 
          for a rent increase above the increase based on
          the cost of the improvements - that is, a hardship increase.  The 
          owner has not applied for such an additional increase, so the cited 
          section is not relevant.  While Section 2522.4(a)(6) of the Rent 
          Stabilization Code allows a consideration of all factors bearing on 
          the equities involved, the Commissioner does not find the equities 
          to require any change in rent increases granted on the basis of 
          costs incurred by the owner for benefits received by the tenants, 
          particularly since the orders granting the increases have followed 
          Section 2522.4(a)(8) of the Rent Stabilization Code in limiting the 
          increases to 6% each per year for the permanent increases and the 
          temporary increases.  The provision of the Code that M.C.I. 
          increases are permanent has been upheld in Ansonia Residents 
          Association vs. New York State Division of Housing and Community 
          Renewal, 551 N.Y.S.2d 871 (Ct. App. 1989).

          Regarding the contention that Rick Mechanical, Inc. was named as 
          subcontractor in the owner's application in Docket No. QS 000283-OM 
          while Sanitary Plumbing and Heating Corp. is named in Schedule C of 
          the "Scope of Work":  The owner's application lists Sanitary as 
          subcontractor for Section A and Rick as Subcontractor for Section 
          B.  There are two separate "Scope of Work" contracts, one for each 
          section of the apartment complex.  Each subcontractor has their own 
          "Scope of Work" contract for their particular section of the 

          Regarding the tenants' contentions about windows:  The specific 
          provisions about the installation of new windows are contained in 
          Division 8, Section 08550 of the contract.  The other divisions of 
          the contract are general provisions (alteration, demolition, 
          sealants, etc.) inserted into the contract.  Alteration of existing 
          work, masonry restoration and scaffolding are either general 

          DOC. NO.: BC 110198-RT et al.

          provisions, related work of other subcontractors which the 
          subcontractor has to coordinate with, or items which are a normal 
          and necessary part of construction work.  The tenants are
          incorrect in asserting that the owner did not give notice of the 
          increase sought for the windows; "6.2%" was requested on Side 1 of 
          RA-79 Supplement III.

          Regarding the contention that the subcontractor named in the 
          owner's application for Docket No. QS 000283-OM is not the same one 
          named in Schedule C of the contract, the tenants are confusing the 
          two subcontractors for Sections A and B.

          Regarding the contention that all apartments did not benefit 
          equally, in Docket No. QS 000621-OM, as the cost for doors ranged
          from $110.00 [birch door only, without frame] to $1,095.00 
          [actually 2 doors, buzzers, and double frame], and that the tenants 
          should not have to pay for allegedly unrelated items:  It is not 
          necessary that all doors in a complex-wide installation be
          identical; all tenants benefit from the improved appearance of the 
          complex if more aesthetically-appealing doors are installed in the 
          most - easily - seen parts of the complex.  However, the fact that 
          the fancier doors have buzzers and intercoms, and the cheaper doors 
          have peepholes, suggests that the fancier doors are doors to the 
          outside while the cheaper doors are individual apartment doors 
          opening into an alcove or stairway.  Door frames,
          buzzers, key locks and latches are an integral or at least related 
          part of a new door system; it is not unreasonable for them to be 
          included in the M.C.I.

          Cleaning and removal of debris and the daily services of an 
          experienced superintendent or foreman employed by the subcontractor 
          are items that would be expected to be included in the cost of 
          hiring someone to do the entire job of replacement of doors; they 
          are indeed a legitimate expense item for an M.C.I. increase.  
          "Capital Improvement" is not at all an unusual reason to give for 
          not charging sales tax, where the company has been given a copy of 
          the certificate of sales tax exemption; charging sales tax would be 
          the more unusual action.  In fact, Burt Millwork did charge sales 
          tax; the Administrator rightly excluded nearly $12,000 from the 
          allowable costs because sales tax was included.  It is unclear why 
          the tenants claim that there are no receipts on file for the 
          alleged installation of new vestibules: There are invoices from 
          Burt Millwork for supplying doors, and cancelled checks in payment.  
          The contract called for Finest Ceiling & Wallboard Company to 
          install them, there are cancelled checks in payment, and the 
          tenants have not alleged that the work was not done.

          DOC. NO.: BC 110198-RT et al.

          The question of whether or not the owner's answer to the early 
          version of the omnibus answer, contained in Docket No. QS 000016- 
          OM, was served on the tenants is not germane as QS 000016-OM is not 
          on appeal here.

          While the tenants refer to their "omnibus answer" as having been 
          submitted in opposition to the four MCI applications considered 
          herein, none of the files for those proceedings contain such an 
          answer, nor do they contain any response by the owner to any 
          omnibus answer which may have previously been in the files.  If the 
          omnibus answer had been considered by the Administrator it would 
          not have been sufficient to have dismissed all of its allegations 
          as "[n]o relevant complaint pertaining to the installation" without 
          further inquiry, such as an investigation into the age of the 
          boilers and the windows.  Since this suggests that the omnibus 
          answer was never considered by the Administrator, these proceedings 
          are being remanded for further consideration of the contentions of 
          the tenants as to the age of the boiler and windows which were 
          replaced and as to whether the useful life of such replaced items 
          had expired, thus entitling the owner to M.C.I. increases.   
          Information should be gathered as necessary.  The owner and the 
          tenants should be allowed to make submissions, and to respond to 
          each others' submissions.   New orders should then be issued, 
          setting forth the reasons for the determinations made about the 
          contentions.  New orders should be issued in all proceedings 
          setting forth schedules for collection of the rent increases which 
          take into account the period of time for which no increase could be 
          charged because of a rent reduction order.

          While the tenants' petition in Docket No. BI 110189-RT is not being 
          considered herein, since an order was issued on March 29, 1989 
          remanding the proceeding, the Commissioner notes for the sake of 
          completeness in dealing with the M.C.I. applications at the 
          apartment complex that a new order has been issued only for Section 
          A, so one still needs to be issued for Section B (formerly Docket 
          No. QS 020194-OM).

          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          it is

          ORDERED, that these petitions be, and the same hereby are, denied 
          in part and that they be, and the same hereby are, granted to the 
          extent of remanding these proceedings 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 orders as directed retroactive rent increases is 
          hereby continued until new orders are issued upon remand.  However, 
          the Administrator's determinations as to prospective rent increases 
          are not stayed and shall remain in effect until the Administrator 

          DOC. NO.: BC 110198-RT et al.

          issues  new Orders upon remand.


                                             ELLIOT SANDER
                                             Deputy Commissioner

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