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. BF 430135-RT,
                                            :              BF 420250-RT
          VARIOUS TENANTS OF 115 and           
          119 WASHINGTON PLACE, NEW YORK       RENT ADMINISTRATOR'S
          NEW YORK            PETITIONERS   :  DOCKET NO.: AC 430062-OM
        ------------------------------------X                             

         ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN 
               PART AND REMANDING PROCEEDING TO THE RENT ADMINISTRATOR
                              FOR FURTHER CONSIDERATION

        On June 18, 1987, the above named petitioner tenants filed Petitions 
        for Administrative Review against an order issued on May 15, 1987 by a 
        Rent Administrator concerning housing accommodations known as various 
        apartments of 115 and 119 Washington Place, New York, New York, wherein 
        the District Rent Administrator determined that the owner was entitled 
        to a rent increase based on the installation of major capital 
        improvements.

        The issue in these appeals is whether the District Rent Administrator's 
        order was warranted.

        The applicable sections of the law are Section 2522.4 of the Rent 
        Stabilization Code and Section 2202.4 of the New York City Rent and 
        Eviction Regulations.

        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 administrative appeals.  

        This proceeding was commenced on March 5, 1986 by the owner's filing of 
        an application for a rent increase based on the installation of major 
        capital improvements (MCI's) to wit:  a new intercom system at a total 
        cost of $2,152.00; a new chimney at a total cost of $1,550.00; and 
        rewiring at a total cost of $40,320.00.

        The owner certified that on May 31, 1986 he served each tenant with a 
        copy of the application and also placed a copy of the entire 
        application including all required supplements and supporting 
        documentation with the resident superintendent of 115 Washington Place.

        Numerous tenants filed objections to the owner's application, 
        contending in substance that the owner was negligent in not maintaining 
        the chimney and should therefore bear the cost for replacing the 
        chimney; the old buzzer system was adequate and in good working order; 
        the new intercom system did not work in all of the apartments; the 
        rewiring was a maintenance and repair item rather than an improvement; 
        the rewiring was partial and mainly installed in the kitchens of the   








          DOCKET NUMBER: BF 430135-RT
        the building; in most apartments no new plug sockets were added to any 
        rooms other than the kitchen; the rewiring was done in an unworkmanlike 
        manner with some cables exposed, some sockets coming out of the wall 
        and/or being inoperable; some light fixtures were becoming defective; 
        ceiling had holes and sloppy plastering; and many tenants had their own 
        220 line for air conditioning which they had paid for themselves. 

        The owner responded by claiming that one socket was hooked up to a 
        light switch in each room; that auxiliary air conditioning outlet was 
        installed in each apartment and that the workmen cleaned up the trash, 
        plaster, dirt and rubble before leaving the subject buildings.

        In Docket No. ZAC 430062-OM dated May 15, 1987, the District Rent 
        Administrator determined that the rewiring and intercom systems 
        qualified as major capital improvements and accordingly authorized rent 
        increases of $4.02 per room for rent-controlled tenants and 2.97% for 
        rent stabilized tenants.  The administrator further determined that the 
        chimney repairs did not constitute a major capital improvement.

        In these petitions, the tenants contend in substance that the District 
        Rent Administrator's order is incorrect and should be reversed because 
        the rewiring was very minimal with only the kitchens being affected in 
        most apartments and with no additional wiring in the other rooms; most 
        tenants had to install their own air conditioning lines; and some of 
        the apartments have suffered a diminution of service as a result of the 
        rewiring with non-working sockets, light fixtures and exposed cables.  
        The tenants also reiterate their original answers to the owner's MCI 
        application.

        On February 6, 1992, the Administrative Review Unit of the Division of 
        Housing and Community Renewal requested that the subject buildings be 
        inspected as to the adequacy and extent of the rewiring and intercom 
        installations.  The subject premises was inspected on March 24 and 25, 
        1992 wherein the inspector noted that the intercom system was 
        functioning properly and that generally the apartments had been 
        adequately rewired with the exception that in several apartments there 
        were no wall switches, only pull chains, for livingroom, bathroom and 
        in some instances kitchen ceiling lights.  The inspector further noted 
        that several apartments were lacking electrical outlets sufficient to 
        support the installation of air conditioners.

        After careful consideration of the entire record, the Commissioner is 
        of the opinion that these petitions should be granted in part, and the 
        proceeding remanded for further processing as described herein below.

        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 Code 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, or maintenance of the 
        structure.  Under rent stabilization, the improvement must generally be 
        building-wide; depreciable under the Internal Revenue Code, other than 




          DOCKET NUMBER: BF 430135-RT
        for ordinary repairs; required for the operation, preservation, and 
        maintenance of the structure; and replace an item whose useful life has 
        expired.

        The Commissioner notes that Divifor an electrical upgrading to qualify 
        as an MCI under current procedures, the job requires the installation 
        of new electric service (capacity), with new copper risers and feeders 
        extending from the property box in the basement to every housing 
        accommodation of the sufficient capacity to accommodate the 
        installation of air conditioner circuits as well as the installation of 
        a double duplex outlet in the kitchen to accommodate heavy duty 
        appliances (as performed in the case herein).  In addition, the tenants 
        must be given the option of having air conditioning outlets installed 
        in the apartments at cost to the tenants. 

        The record herein discloses that the owner substantiated its MCI 
        application for the rewiring work in the proceeding below by submitting 
        to the Administrator copies of the contractor's certification, and 
        certificate of electrical inspection from the bureau of electrical 
        control for the work in question.  However, it appears that, contrary 
        to the contract, as submitted by the owner, air conditioning outlets 
        were not installed on a building-wide basis nor were all the tenants 
        afforded an opportunity to have such outlets installed by the owner 
        and, in fact, several tenants have installed their own outlets.

        Accordingly, the Commissioner is of the opinion and finds that the 
        Administrator's order should be modified in that so much of the MCI 
        rent increase attributable to the installation of air conditioner 
        outlets in each apartment should be revoked.  Accordingly, the total 
        previously approved cost of $42,472.00 is reduced in the amount of 
        $1,920.00 which represents the claimed cost of the air conditioner 
        outlet installation.  The above adjustment results in a reduced rent 
        increase of $3.84 per room per month for rent controlled tenants and 
        2.84% of the August 1, 1986 rent for rent stabilized tenants, (computed 
        in accordance with the formula set forth in the Administrator's order).

        The owner is of the further opinion that the Administrator's order 
        should be further modified in the following mannertachment to MCI Order 
        for 
        Rewiring annexed herein, to wit:

        The owner is to notify the tenant that the tenant shall, within 30 days 
        of receipt of the notice, notify the owner whether he/she wishes to 
        have an air conditioner outlet installed where there is none yet 
        existing, which request shall be limited to the living rooms and 
        bedrooms.  For the above-mentioned tenants, as well as those for whom 
        heavy-duty air conditioner outlets were installed as part of the 
        origional rewiring installation, the tenants shall be offered the 
        option of paying outright the current cost of installing each heavy 
        duty air conditioning outlet installed by the owner in which event 
        there shall be no monthly increase in rent for each installation and 
        such one-time charge shall not be deemed a part of the monthly rent for 
        the purposes of renewal; or, in the alternative, the tenant may elect 
        a monthly increase in the monthly rent, in which event the rent may be 
        increased by 1/60th of the cost of the air conditioning outlets upon 
        completion of the installation without further order of the Rent 
        Administrator.  Any questions arising in the course of complying with 
        this order may be brought to the attention of the Rent Administrator.









          DOCKET NUMBER: BF 430135-RT




          DOCKET NUMBER: BF 430135-RT
        The Commissioner further notes that the inspection also revealed that 
        the intercom system, in those petitioners' apartments for which access 
        was gained and an inspection conducted, was functioning properly.

        The Commissioner is therefore of the opinion that this proceeding 
        should be remanded for a recalculation of the appropriate rent 
        increases to which the owner is entitled for the installation of the 
        new intercom only.

        The owner is advised that any excess rent collected from the tenants is 
        to be completely refunded to them within 30 days of the issuance of 
        this order.

        THEREFORE, in accordance with the Rent and Eviction Regulations for New 
        York City and the Rent Stabilization Law and Code, it is

        ORDERED, that so much of the Administrator's order as granted a rent 
        increase for the electrical installation be, and the same hereby is, 
        revoked, and it is, further

        ORDERED, that the owner shall refund to the tenants any excess rent 
        arising as a result of this order within 30 days of the date of 
        issuance hereof, and it is further

        ORDERED, that these petitions 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 order and determination of the Rent Administrator remains 
        in full force and effect in all other respects until a new order is 
        issued on remand.

        ISSUED:



                                                                      
                                             JOSEPH A. D'AGOSTA
                                         Acting Deputy Commissioner




                                                    





    

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