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

      APPEAL OF                              DOCKET NO.: BH 230115-RT
          RALPH MONACO                       RENT ADMINISTRATOR'S
                                             DOCKET NO.: KCS 000898-OM
                            PETITIONER    : 


      On August 17, 1987, the above named petitioner-tenant timely filed a 
      petition for administrative review (PAR) against an order issued on July 
      17, 1987, by a Rent Administrator (Gertz Plaza) concerning the housing 
      accommodations known as 7040 Colonial Road, 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 

      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 October 15, 1985, by initially 
      filing an application for a rent increase based on the installation of the 
      following items at a cost of $62,000: New roof, construction of a retaining 
      wall, entrance door, and boiler/burner.

      The tenants did not submit an objection to the owner's application although 
      afforded the opportunity to do so.

      On July 17, 1987, the Rent Administrator issued the order herein under 
      review finding that the installation(s) qualified as an MCI, determining 
      that the application complied with the relevant laws and regulations base 
      upon the supporting documentation submitted by the owner, and allowing 
      appropriate rent increases for rent controlled and rent stabilized tenants.

      The order of the Rent Administrator granted, in part, the owner's 
      application and authorized an increase for the new roof, entrance door and 
      boiler/burner upon a finding that the work completed complied with all 
      qualifying criteria established for a major capital improvement.  
      Disallowed by the Administrator was the claimed cost of $12,500 for the 
      construction of a retaining wall upon a finding that the installation did 
      not constitute a major capital improvement pursuant to the Rent 
      Stabilization Code and Regulations.

      In this petition, the tenant contends in substance that the owner failed to 
      notify the tenants of the application requesting a rent increase.  
      Consequently, the tenants were not given the opportunity required by law, 


          ADMIN. REVIEW DOCKET NO.: BH 230115-RT

      to review the application and comment thereupon.  Furthermore, if given the 
      opportunity to review the application, the tenants would have advised that 
      the work completed was of poor and inferior quality.

      A review of the record indicates that there was no response from the owner 
      to the tenant petition.

      After careful consideration of the entire record, the Commissioner is of 
      the opinion that this proceeding must be remanded to the Rent Administrator 
      for further processing.

      The issue of the tenant's alleged failure to receive notice of the MCI 
      application can be resolved by the Administrator ordering a hearing on the 
      basis of determining if the owner served proper notice to the tenants of 
      the MCI application.

      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 is, granted to the extent of 
      remanding this proceeding to the Rent Administrator for further processing 
      in accordance with this order and opinion.  The automatic stay of so much 
      of the Rent Administrator's order as directed a retroactive rent increase 
      is hereby continued until a new order is issued upon remand.  However, the 
      Administrator's determination as to a prospective rent increase is not 
      stayed and shall remain in effect until the Administrator issues a new 
      Order upon remand.


                                           JOSEPH A. D'AGOSTA
                                       Acting Deputy Commissioner


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