BJ 130200-R0, 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.:   
                                                  BJ 130200-RO;  BJ 130216-RO;
                                                  BJ 130215-RO;  BJ 130213-RO;
                                                  BJ 130212-RO;  BJ 130207-RO
                 GEORGE    MALLIS,                      DRO    DOCKET     NOS.:
                                                  AA 100212-OM;  AA 100207-OM;
                                                  AA 100208-OM;  AA 100209-OM;
                                  PETITIONER      AA 100210-OM;  AA 100211-OM


          The Commissioner has consolidated these petitions as they involve 
          common questions of law and fact.

          On October 2, 1987, the above-named petitioner-owner filed  peti-
          tions for administrative review  against  orders  issued  by  the
          Rent Administrator on September 3, 1987.   The  orders  concerned
          housing accommodations located at 21-14, 21-24, 21-32, 21-38, 21 
          54 and 21-62 Crescent Street, Astoria, New  York.   The  Adminis-
          trator granted, in part, the  owner's  applications  for  a  rent
          increase based on the installation of major capital  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.

          Petitioner commenced this proceeding by filing an application for 
          each building for a rent increase based on the installation of  a
          major capital improvement.  On March 21, 1986 the owner certified 
          that the tenants had been served with a copy of Application  Form
          RA-79, a copy of Notice Form RA-79N and three  copies  of  Answer
          Form  RTP-3.   The  improvements  claimed  by  petitioner   were:
          replacement of prime windows, pointing and water proofing, 

          replacement of basement and roof doors,  new  intercom,  painting
          the hallways and masonry repair.  The tenants who responded
          objecting to the proposed increase either objected to the  amount
          of the increase or alleged that the  windows  were  in  such  bad
          condition that replacement was mandatory. 

          The Administrator granted the applications for all  items  except
          the pointing and  waterproofing,  hallway  painting  and  masonry
          repair.  The pointing and waterproofing were specifically  denied

          BJ 130200-R0, et al.
          because the Administrator found that all exterior walls were  not
          pointed and waterproofed.

          On appeal, the owner argues that the buildings were water proofed 
          on all their exposed sides.  A diagram is annexed  to  the  peti-
          tions indicating the areas of the  buildings  which  were  water-

          The Administrator was supplied with this informatio .   The  con-
          tractor submitted material to the Administrator  indicating  that
          5,000 square feet of each building were pointed  and  10,000  sq.
          feet waterproofed.  The contractor affirmed  that,  in  order  to
          preserve the structure of the buildings all sides  f  the  build-
          ings needed to be waterproofed  and  the  fronts  pointed.   This
          affirmation was submitted to the Administrator as well.

          Petitioner argues that, since the  work  was  building-wide,  the
          Administrator erred in denying an increase in  rent.   No  tenant
          filed a response to the petition.

          The Commissioner has carefully considered the evidence  contained
          in the record, and is of the opinion that the proceedings  should
          be remanded to the Administrator for further consideration.

          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 t e  Rent  Stabiliza-
          tion 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,  preserva-
          tion, 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.

          It is the policy of the DHCR to grant MCI increases for  pointing
          and waterproofing when such work is done to an  entire  building,
          as necessary.  The owner must file with his MCI application a 
          certification (with diagram) by the contractor  indicating  that,
          based upon examination, the  sections  waterproofed  and  pointed
          were all areas where it was required.

          In these proceedings the owner did, in fact, file such  a  certi-
          cation.  Substantial  sums  totaling  $11,250.00  were  spent  in
          pointing and  waterproofing  the  buildings.   The  Administrator
          erred in not processing that part  f  the  petitioner's  applica-

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

          ORDERED, that these  petitions  be,  and  the  same  hereby  are,

          BJ 130200-R0, et al.
          granted to the extent  of  remanding  these  proceedings  to  the
          Administrator for further  processing  in  accordance  with  this
          order and opinion.


                                                JOSEPH A. D'AGOSTA
                                                Deputy Commissioner



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