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

          -------------------------------------X   ADMINISTRATIVE REVIEW
          APPEAL OF
                    KEW-JAC ASSOCIATES,            RENT ADMINISTRATOR'S
                    C/O REHAB ASSOCIATES,          DOCKET NO.:  AB130041OM


          The above-named petitioner-owner timely filed an administrative 
          appeal against an order issued on August 24, 1987, by the Rent 
          Administrator (92-31 Union Hall Street, Jamaica, New York) 
          concerning the housing accommodations known as 119-37 Metropolitan 
          Avenue, Kew Gardens, New York, various apartments, wherein the Rent 
          Administrator partially granted the owner's application for a major 
          capital improvement (MCI) rent increase based on the installation 
          of a new burner and boiler, a new vestibule door, a new roof and 
          elevator upgrading at a total approved cost of $78,700.00.  The 
          Administrator disallowed expenditures for pointing and 
          waterproofing at the premises based on a determination that said 
          work, performed where necessary, did not constitute a majfor 
          capital improvement.

          In this petition, the owner contends, in substance, that pointing 
          and waterproofing expenditures should not have been disallowed. 

          Several tenants submitted responses to the owner's petition in 
          which they object to an additional MCI rent increase for pointing 
          and waterproofing and raise service complaints both related and 
          unrelated to the previously approved MCI installations.  None of 
          the tenants raised objections to the quality or adequacy of the 
          pointing and waterproofing work.

          The Commissioner is of the opinion that this petition should be 

          ADMIN. REVIEW DOCKET NO. BH-130214-RO

          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.

          It is Division policy to consider comprehensive pointing and 
          waterproofing on exposed sides of a building, as qualifying for 
          treatment as a major capital improvement.  The work performed, for 
          example, must be greater than mere spot patching to repair current 
          leaks or trouble spots so as to be in the nature of an improvement 
          or betterment of the structure.  (Accord:  SJR4597, DB430282RT).

          A review of the record in the instant proceeding reveals that the 
          owner submitted copies of the following documentation in support of 
          its application for an MCI rent increase for the pointing and 
          waterproofing work performed at the subject premises:  an invoice; 
          cancelled checks; a statement from the contractor advising that all 
          exposed surfaces of the building were examined prior to the work 
          and then all work necessary was perfomred; and a diagram indicating 
          the areas of the building where the work was performed.

          Although several tenants raised questions below as to whether 
          pointing and waterproofing was actually performed, only one tenant 
          raised a complaint regarding "water leakage".  The Commissioner 
          further notes that no such complaints were raised on administrative 
          appeal.  Accordingly, the Commissioner is of the opinion and finds 
          that the pointing and waterproofing work herein qualifies as a 
          major capital improvement.  The Commissioner further finds that the 
          owner is entitled to an additional rent increase to reflect the 
          owner's cost ($27,430.00) for the pointing and waterproofing and 
          that the Administrator's order should be modified based on a 
          revised total approved cost of $106,134.00.  This results in a rent 
          increase for rent controlled apartments of $8.08 (rather than 
          $5.99) per room, per month, effective as of September 1, 1987 (the 
          first rent payment date after issuance of the Administrator's 
          order) and a rent increase for stabilized apartments of 5.75% 
          (rather than 4.26%) of the rent in effect on the February, 1986 
          rent roll date, effective June 1, 1986.  (Said increase is computed 
          in accordance with the methodology and formula then in effect as 
          set forth on page 3 of the Administrator's order).

          The tenants may pay arrears in rent arising as a result of this 
          order in 12 equal monthly installments.


          ADMIN. REVIEW DOCKET NO. BH-130214-RO

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

          ORDERED, that this petition be, and the same hereby is, granted; 
          that the Administrator's order be, and the same hereby is, modified 
          in the manner and to the extent indicated herein; and that as so 
          modified said order be, and the same hereby is affirmed.


                                             JOSEPH A. D'AGOSTA
                                             Deputy Commissioner



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