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

      APPEAL OF                              DOCKET NO.: BH130057RT
                                             DOCKET NO.: AF130054OM
                            PETITIONER    : 


      On August 27, 1987, the above named petitioner-tenants timely filed a 
      petition for administrative review (PAR) against an order issued on July 
      31, 1987, by a Rent Administrator (Gertz Plaza) concerning the housing 
      accommodations known as 68-60 108th Street, Queens, New York, various 
      apartments, wherein the Rent Administrator determined that the owner was 
      entitled to a rent increase based on the installation of a major capital 
      improvement (MCI).

      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 this administrative appeal.

      The owner commenced this proceeding on June 6, 1986, by initially filing an 
      application for a rent increase based on the installation of the following 
      items at a total cost of $56,400.00: new oil burner and boiler, new heat 
      timer and concrete sidewalk and curb.

      The Livingston Tenants Association, Inc. filed an answer to the owner's 
      application, alleging, in substance, that the MCI increase should not be 
      granted because work described in the application was not completed within 
      6 months as set forth in DHCR fact sheet H-4; that the heat timer and 
      concrete work do not qualify as MCIs; that the increase should not extend 
      beyond the 60 month amortization period; that the owner has not provided 
      essential services as set forth in Docket No. 2T47332/57 and C.A.B. Opinion 
      No. 12,184.

      On July 31, 1987, the Rent Administrator issued the order here under review 
      finding that the installations qualified as MCIs, determining that the 
      application complied with the relevant laws and regulations based upon the 
      supporting documentation submitted by the owner, and allowing a rent 
      increase for rent controlled and rent stabilized tenants.

      In this petition, the Livingston Tenants Association, Inc. contends, in 
      substance, that the MCI increase should not be granted due to 
      non-compliance by the owner with service substitution orders, Opinion No. 
      12,184 and Docket No. 2R43032/053; and that the effective date of the MCI 
      increase should be the date of the Rent Administrator's Order.

      After careful consideration of the entire record, the Commissioner is of 
      the opinion that this petition should be denied.


          ADMIN. REVIEW DOCKET NO.: BH130057RT

      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.

      Section 2202.3 of the New York City Rent and Eviction Regulations provides 
      in pertinent part that a landlord shall not be entitled to an increase in 
      the maximum legal rent where a landlord fails to provide essential 

      Section 2522.4(a)(13) of the Rent Stabilization Code provides in pertinent 
      part that the Division shall not grant an owner's application for a rent 
      increase for the installation of an MCI, in whole or in part, if it is 
      determined by the Division prior to the granting of approval to collect 
      such increase that the owner is not maintaining all required services.

      The evidence of the record in this instant case indicates that the 
      Livingston Tenants Association filed an application for diminution of 
      building-wide services, Docket No. 34088-B and Docket No. 2T473325/78 on 
      the grounds security personnel were no longer supplied by owner.  The C.A.B 
      Order and Opinion No. 12,184 (April 17, 1980) and the Rent Administrator's 
      Docket No. 2R43032/53 (March 27, 1980) ordered substituted security 
      service, including a closed circuit TV security system accepted by 
      agreement between the owner and 100% of the rent controlled tenants and 87% 
      of the rent stabilized tenants.

      On May 13, 1987 the Livingston Tenants Association filed a complaint of 
      building-wide Decrease in Services, Docket No. BE 130103-B, alleging that 
      the owner was in non-compliance with elements of the substitution of 
      service order.

      The Rent Administrator denied the Tenants Association's complaint based 
      upon inspections finding that services had been resolved.

      The Livingston Tenants Association filed a Petition for Administrative 
      Review (PAR), Docket No. DJ 130294-RT, against the Rent Administrator's 
      order, Docket No. BE 130103-B.  The Commissioner rejected the petition.  
      The Livingston Tenants Association refiled its PAR, Docket 
      No. EB 130377-RT, which the Commissioner dismissed.

      As the record indicates, the Commissioner finds no outstanding order of a 
      building-wide reduction in services and therefore, affirms the Rent 
      Administrator's Order in the instant case.


          ADMIN. REVIEW DOCKET NO.: BH130057RT

      As for the Livingston Tenants Association's objections to the effective 
      dates of the order, the Commissioner notes that for rent controlled 
      apartments, the effective date of the MCI increase is the first rent 
      payment date after the issuance of the Administrator's order.

      The effective date of the MCI increase for tenants in stabilized apartments 
      is the first rent payment date one month after certification of service of 
      the owner's application on the tenants.

      Lastly, the Commissioner deems it appropriate to note that the New York 
      Court of Appeals has held that a rent increase granted for the installation 
      of an MCI may become a permanent part of the rent structure.

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

      ORDERED, that this petition be, and the same hereby is, denied; and that 
      the Administrator's order be, and the same hereby is, affirmed.


                                           JOSEPH A. D'AGOSTA
                                           Deputy Commissioner



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