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

          -------------------------------------X   ADMINISTRATIVE REVIEW
          APPEAL OF
                    DOUGLAS MEYER
                                                   RENT ADMINISTRATOR'S
                                                   DOCKET NO.:  AB530090OM



          On August 28, 1987 the petitioner-tenant 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 5057 Broadway, Apartment 44, New York, New 
          York, 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 February 13, 1986 by 
          initially filing an application for a rent increase based on the 
          installation in August 1985 of a new boiler/burner at a total cost 
          of $30,000.00.

          Three tenants objected to the owner's MCI application stating, in 
          substance, that the new boiler was inefficient; that the old boiler 
          operated properly, and one tenant objected to the MCI increase 
          stating that the owner should pay for the boiler.

          On July 31, 1987 the Rent Administrator issued the order here under 
          review finding that the installation qualified as an MCI, 
          determining that the application complied with the relevant laws 
          and regulations based upon the supporting documentation that was 
          submitted by the owner, and authorizing rent increases for rent 
          controlled and rent stabilized apartments.

          The tenant in Apartment 44 filed a petition for administrative 
          review objecting to the MCI increase on the grounds that he was the 
          first rent stabilized tenant in the apartment and that the free 
          market rent for the apartment included the MCI increase.  He stated 
          he moved into the apartment in August 1986, after the installation 
          of the boiler/burner.

          ADMIN. REVIEW DOCKET NO. BH-410289-RT

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

          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.

          With regard to the petitioner's contention that he should not be 
          obligated to pay the MCI rent increase because he took occupancy of 
          the apartment after the installation of the boiler/burner and after 
          the application was filed, the record discloses that the subject 
          apartment was still rent controlled as of May 1986.  The petitioner 
          herein, Douglas Meyer, is the first stabilized tenant of record of 
          said apartment.  The tenant moved into the apartment initially 
          paying a free market rent, which included any and all services then 
          being provided, including the new boiler/burner.  Accordingly, the 
          Commissioner finds that the owner is precluded from collecting the 
          MCI rent increase from this tenant and all subsequent tenants of 
          the subject apartment.  

          The owner is hereby directed to refund to the tenant within 30 days 
          of the date of issuance of this order any overpayment of rent 
          arising as a result of this order and opinion.  This determination 
          is without prejudice to the tenant filing a complaint of rent 
          overcharge, if the facts so warrant and the owner has not complied 
          with the above-stated directive.

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

          ORDERED, that the petition be, and the same hereby is granted, that 
          the Rent Administrator's order under Docket No. AB530090OM be, and 
          the same hereby is, modified to the extent of excluding the present 
          and all future tenants of the subject apartment from the rent 
          increase; and that as so modified, said order be, and the same 
          hereby is, affirmed.


                                                         Joseph A. D'Agosta
                                                        Deputy Commissioner

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