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

          -------------------------------------X   ADMINISTRATIVE REVIEW
          APPEAL OF
                    GEORGE CROSSLAND, 
                    GWENDOLYN BALDEN,              RENT ADMINISTRATOR'S
                    JUDITH OUTCALT,                DOCKET NO.: QS000937OM
                    V. FERDINAND, 
                    W. ROSS, 
                    AND D. WILLIAMS                                

          On August 7, 1987, the above named petitioner-tenants timely filed 
          a petition for administrative review (PAR) against an order issued 
          on July 27, 1987, by a Rent Administrator (Gertz Plaza) concerning 
          the housing accommodations known as 63-19/25/37 and 43 Austin 
          Street and 92-06 63rd Avenue, Rego Park, NY, various apartments, 
          wherein the Rent Administrator determined that the owner was 
          entitled to a rent increase based on the installation of major 
          capital improvements (MCIs).

          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 November 14, 1985, by 
          initially filing an application for a rent increase based on the 
          installation of the following items at a total cost of $225,246.87:  
          new thermal windows building-wide; scrubbers for incinerators; new 
          intercom system; landscaping; new oil burner and boiler; painting 
          of halls and stairways; and new entrance doors.

          ADMIN. REVIEW DOCKET NO. BH-130071-RT

          Various tenants from 63-19 Austin Street, 63-25 Austin Street, 63- 
          37 Austin Street, 63-43 Austin Street and 92-06 63rd Avenue, 
          objected to the owner's application, alleging, in substance, that 
          the improvements were corrections of building violations; that the 
          improvement costs were overstated; that there was careless 
          workmanship in the installation of the windows; that the new 
          windows were drafty; that there was inadequate heat in winter; that 
          very little landscaping work was performed; that there was broken 
          glass from windows on the grounds; that the incinerators did not 
          work properly and discharged smoke in the building; that the 
          tenants had already received a 3.2% rent increase for an 
          incinerator upgrade in 1972; that the intercom system was not new 
          and did not work properly; that the previous owner of the building 
          was ordered to provide a new intercom service without cost to 
          tenants by Judge M. Habater, Queens, Civil Court of New York, 
          Housing Division, Index # HP1343 in 1983; that the interior 
          entrance doors were not replaced; and that painting, which was not 
          completed, was maintenance and not an MCI.  

          The owner responded to the tenants' objections, which were 
          summarized by DHCR, by contending, in substance, that broken glass 
          from the old windows had been cleaned up and new lawns were 
          planted; that the complex has five (5) front doors and the owner 
          had replaced dozens of broken locks; and that the window installers 
          made the adjustments to the windows to alleviate drafts.

          On July 27, 1987, the Rent Administrator issued the order here 
          under review, finding that certain of 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 granting, in part, the 
          owner's application and authorizing an increase for new thermal 
          windows, new incinerator, an intercom system, an oil burner/boiler 
          and entrance doors.  Disallowed by the Administrator were the total 
          claimed costs of $30,696.87 for landscaping, painting of halls and 
          stairways, and sales tax upon a finding that these items did not 
          qualify as MCIs, and $15,819.28 upon a finding that this amount was 
          not properly substantiated by the supporting documentation.

          In this petition, five (5) tenants claiming to be tenant 
          representatives from each building in the complex contend, in 
          substance, that the MCI increase attributed to the incinerator and 
          intercom work should be denied because the installations were only 
          repairs to remove building violations.  The petitioners further 
          contend that the tenants were charged an MCI increase of 3.2% in 
          1972 for upgrading the incinerator to meet the standards of the 
          EPA; that the incinerators are not working properly; that the prior 
          landlord was required to repair the intercom system pursuant to an 
          Order by Judge M. Habater, Queens County Civil Court of New York 
          City, Index # HP1343 (1983), at no charge to tenants, and claim 
          that the new owner is bound by this ruling; and that the intercom 
          system is not in working order; and that screens were not replaced.

          ADMIN. REVIEW DOCKET NO. BH-130071-RT

          In response to the petitioners' allegations, the owner contends, in 
          pertinent part, that the front door is in proper working order and 
          locked, and a new scrubber was installed and is in proper working 

          After a careful consideration of the entire record, the 
          Commissioner is of the opinion that this proceeding should be 
          granted in part.

          Rent increases for major capital improvements are authorized by 
          Section 2522.4 of the Rent Stabilization Code for rent stabilized 
          apartments.  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.

          In accordance with established procedures, an owner must submit 
          sufficient documentation in order to substantiate its application 
          and the increase requested therein.  The requisite documentation 
          includes a certification of the cost of the work, proof of actual 
          payment, necessary government approvals where appropriate, and an 
          owner's affidavit as to the truthfulness of all information 
          submitted with the application.

          The record in this instant case does not provide a conclusive basis 
          for the Rent Administrator's finding that the incinerator work 
          constituted a major capital improvement.  The record reveals that 
          the work performed as described in the Estimate to Furnish Labor 
          and Materials does not include the installation of new scrubbers.  
          The work descriptions includes items such as repair of brickwork in 
          the  combustion chamber, rebuilding of the system's gas burner, 
          internal cleaning of scrubbers and the rebuilding of the system's 
          scrubber blowers.  Furthermore, the record does not include the 
          government permits from the Bureau of Air Resources and Department 
          of Buildings, required for the scrubber installation and 
          incinerator upgrade.

          Therefore, the Administrator's order should be modified to 
          eliminate the cost of the incinerator work.

          As for the petitioners' allegation that the intercom system is not 
          new, the Commissioner finds the Rent Administrator's determination 
          concerning this issue was correct based upon the owner's submission 
          of requested documentation, such as paid bills, canceled checks, 
          and the contract.  As for the workmanship of the intercom 
          installation, the Commissioner notes there are no service 
          complaints regarding the intercom system, nor were there any 
          building-wide rent reduction orders in effect at the time of the 
          issuance of the Administrator's order.


          ADMIN. REVIEW DOCKET NO. BH-130071-RT

          As for the petitioners' allegation that screens were not installed 
          with the new windows, the Commissioner notes that this issue was 
          raised for the first time on appeal, and thus, cannot be considered 
          at this stage of the proceeding as this is not a de novo 

          As for the tenants' claim that the intercom work was required 
          without cost to the tenants by a Court Order, the Commissioner sent 
          a Notice of Opportunity to Present Further Information and Evidence 
          to both the Petitioner-tenant and the owner for a copy of the said 
          Court Order and received no answers.  Therefore, the Commissioner 
          has made an independent determination within the purview of the 
          specific Rent Laws and Regulations applicable to this matter to 
          confirm the Rent Administrator's determination that the 
          installation qualifies as a major capital improvement for which the 
          owner is entitled to an appropriate increase. 

          The Commissioner finds that the rent increase for the incinerator 
          should be suspended retroactively from the effective date of the 
          Administrator's order and that the permanent rent increase should 
          be reduced to 8.72 percent per month (subject to the annual 
          limitation of 6% on both the permanent and temporary retroactive 

          1.   Allowable cost of Improvements                    $176,730.72
               (Thermal windows, intercom system, 
               oil burner/boiler and entrance doors)                         
          2.   Amortization of cost over 5 years                  $35,346.14
               (60 months) (base, divided by 5)                 

          3.   Annual gross rent of stabilized Apts              $405,174.00 
               (as of November, 1985)

          *4.  Percentage of Rent Increase                              8.72%
               (item 2 divided by 3)

          *    To determine the dollar amount of the rent increase, multiply 
          the rent charged for each apartment as submitted in the rent roll 
          dated November, 1985 by the appropriate percentage of increase.


          ADMIN. REVIEW DOCKET NO. BH-130071-RT

          The owner is directed to refund to all tenants the rent increase 
          collected for the incinerator.  For rent stabilized apartments, a 
          credit of 20% per month commencing on the first rent payment date 
          after issuance of the Commissioner's order until all overpayments 
          have been refunded.

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

          ORDERED, that the tenants' Petition for Administrative Review be, 
          and the same hereby is, granted in part; and that the 
          Administrator's order be, and the same hereby is modified in 
          accordance with the order and opinion, and as so modified, said 
          order is hereby affirmed. 


                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner



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