BG 110217 RT

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

          APPEAL OF                              DOCKET NO. BG 110217 RT
                                              :  DRO DOCKET NO.ZAB-110145-OM
          AMI CHRYSLER, TENANT REPRESENTATIVE                     

                                PETITIONER    : 

               On July 22, 1987, the above-named petitioner-tenant filed a 
          Petition for Administrative Review against an order issued on June 
          19, 1987, by the Rent Administrator, 92-31 Union Hall Street, 
          Queens, New York, concerning the housing accommodations known as 69- 
          51, 55, 59, 63, 67, 71 136th Street, Queens, New York, Various 
          Apartments, wherein the Rent Administrator determined that the 
          owner was entitled to a rent increases based on a major capital 

          The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2522.4 of the Rent Stabilization Code.

          The issue herein is whether the Rent Administrator's order 
          was warranted.

          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 appeal.  

          The owner commenced this proceeding in April 1986, by filing 
          an application for a rent increase based on the major capital 
          improvement of the installation of a new oil burner and boiler at 
          a total cost of $30,000.  The owner submitted all the required 
          documentary evidence in support of its application.

          In answer to the application, the tenants stated in substance 
          that the boiler/burner installation should be considered ordinary 
          repairs and maintenance and that the timing of the installation is 
          connected to the conversion of the subject premises to cooperative 
          ownership in that the owner hopes to receive higher sales prices 
          for the apartments.  The tenants further stated that they received 
          an Offering Plan for the cooperative conversion in March 1986.

          In Order Number ZAB-110145-OM, the Rent Administrator found 
          that the installation qualified as a major capital improvement in 
          that the application complied with the relevant laws and 
          regulations based upon the supporting documentation submitted by 
          the owner, and the Rent Administrator accordingly allowed 

          BG 110217 RT
          appropriate rent increases for rent stabilized apartments.

          In this petition, the tenant reiterates the contentions in 
          the answer submitted below, states that the answer was not 
          properly considered by the Rent Administrator and contends that 
          there is insufficient heat and hot water since the new boiler was 

          The Commissioner is of the opinion that this petition should 
          be denied.

          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 for 
          ordinary repairs, required for the operation, preservation, and 
          maintenance of the structure, and replace an item whose useful 
          life has expired.

          The record in the instant case indicates that the owner 
          correctly complied with the application procedures for a major 
          capital improvement and the Rent Administrator properly computed 
          the appropriate rent increases.  The tenant has not established 
          that the increase should be revoked.

          The tenant who filed the instant petition did not raise any 
          problems regarding the functioning of the boiler when the matter 
          was before the Administrator.  The new boiler had been in place 
          several months before the owner's rent increase application was 
          filed, affording the tenants ample opportunity to become aware of 
          any defects and bring them to the attention of the owner and the 
          Administrator.  Accordingly, the Commissioner finds that it is 
          inappropriate to consider for the first time in this 
          administrative appeal the tenant's allegation that there is now 
          insufficient heat and hot water in the subject premises.

          This order and opinion is issued without prejudice to the 
          tenants' right to file an application for a rent reduction for 
          diminution of services should the facts so warrant.

          Further, the Commissioner finds that the tenant's contention 
          that the installation of a new oil burner and boiler should be 
          considered ordinary repairs is without merit.  Such installation 
          of new equipment clearly qualifies as a major capital improvement.  
          Finally, the fact that the owner may have been influenced in its 
          decision to install the new oil burner and boiler by the 
          anticipated cooperative conversion of the subject premises does 
          not bar the granting of a major capital improvement rent increase 

          for the installation.

          BG 110217 RT
          THEREFORE, in accordance with the provisions of the Rent 
          Stabilization Law and Code, it is

          ORDERED, that this petition for administrative review be, and 
          the same hereby is, denied, and, that the order of the Rent 
          Administrator be, and the same hereby is, affirmed.


                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner



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