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

          APPEAL OF                              DOCKET NO.: BI220230RO
            DANIEL SUGRUE                        RENT ADMINISTRATOR'S
                                                 DOCKET NO.: AD220192OM
                                PETITIONER    : 

                              FOR ADMINISTRATIVE REVIEW

          On September 18, 1987, the above named petitioner-owner timely 
          filed a petition for administrative review (PAR) against an order 
          issued on September 7, 1987, by a Rent Administrator (Gertz Plaza) 
          concerning the housing accommodations known as 6803 Owls Head 
          Court, Brooklyn, New York, various apartments, wherein the 
          Administrator denied the owner's major capital improvement (MCI) 
          rent increase application upon a finding that a partial roof 
          replacement did not constitute an 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.

          In this petition, the owner contends, in substance, that a complete 
          new roof was installed covering 1360 square feet; that the total 
          roof area is 1515 square feet; however, the remaining uncovered 
          portion represents the skylight area.

          In response to the owner's petition, the tenant of apartment 2B 
          alleges, in substance, that the entire roof was not replaced, and 
          that the repair work was not completed by professionals.

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

          Rent increases for MCIs 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 
          stabilization apartments.  Under rent control, an increase is 
          warranted where there has been since 1970 an MCI 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.


          ADMIN. REVIEW DOCKET NO.: BI220230RO

          It is the established position of the Division that the 
          installation of a new roof meets the definitional requirements of 
          an MCI for which a rent increase may be warranted, if the owner 
          otherwise so qualifies.

          The evidence of record in the instant case discloses that a new 
          roof was in fact installed at the subject premises which covered 
          the entire roof area (1360 square feet) except for the skylight.  
          Thus, the Commissioner finds that the Administrator erred in 
          denying the owner's MCI application on the mistaken grounds that 
          only a partial roof replacement had occurred.

          However, the record also indicates that the roof installation was 
          done by the owner's son with a helper; that the cancelled check 
          ($2,000.00) submitted as proof of payment was made out to the 
          owner's son (Daniel Sugrue, Jr.) and that the owner's son resided 
          at the same address as his father (as indicated on the bill 
          submitted by the owner).  Due to the absence of an arms-length 
          transaction between the owner and the contractor, and the fact that 
          there was no cost breakdown of labor and materials for the work in 
          question, the Commissioner finds that the total allowable cost for 
          the roof installation should be limited to $1360.00 (out of a total 
          claimed cost of $2,000.00).  Therefore, the owner is entitled to a 
          rent increase of $1.13 per room per month ($1360.00 divided by 60 
          months divided by 20 rooms).

          For rent controlled apartments, said increase is effective October 
          1, 1987, the first rent payment date after the issuance of the 
          Administrator's order under appeal.  For rent stabilized 
          apartments, said increase is effective August 1, 1986, the first 
          rent payment date one month after service of the owner's MCI 
          application on the tenants.  The owner is entitled to collect 
          temporary arrears in addition to the permanent rent increase.

          THEREFORE, in accordance with the applicable provisions of the Rent 
          Stabilization Law and Code and the Rent and Eviction Regulations 
          for the City of New York, and Operational Bulletin 84-1, it is

          ORDERED, that this administrative appeal be, and the same hereby 
          is, granted in part; that the Administrator's order be, and the 
          same hereby is, revoked; and that the rent of the rent stabilized 
          and rent controlled apartments be, and the same hereby are, 
          increased as hereinabove provided subject to the attached 
          conditions which are fully made a part of this order.  The tenants 
          may pay any arrears in rent arising as a result of this order in 
          twenty-four equal monthly installations.


                                               JOSEPH A. D'AGOSTA
                                               Deputy Commissioner


          ADMIN. REVIEW DOCKET NO.: BI220230RO


          1.   If a Rent Reduction Order is currently in effect for any 
          apartment(s) in the bulding due to the owner's failure to provide 
          or maintain services, any rent increase herein, affecting such 
          apartment(s) which is to be effective on or after the effective 
          date of the rent reduction, will be non-collectible from such 
          apartment(s) until a Rent Restoration Order has been issued, and 
          will only be collectible from the effective date of the rent 
          Any portion of an MCI order which has take effect prior to the 
          effective date of the Rent Restoration Order is collectible by the 

          2.   For the increase granted by this Order to be collectible 
          during the term of the current lease:  a)  the lease must contain 
          a provision authorizing the collection of an increase pursuant to 
          a DHCR order; and b)  where the application for this increase was 
          pending prior to the commencement date of a vacancy lease, the 
          increase granted in this Order is collectible only if such lease 
          contains a specific provision regarding the application pending 
          before the Division of Housing and Community Renewal, citing the 
          Docket Number assigned, the basis for the application, and that any 
          increase granted pursuant to a DHCR Order would be effective during 
          the term of the lease.  In the absence of same, the increase is not 
          collectible until the expiration of the lease term in effect at the 
          time the order is issued.

          3.   If the tenant of a rent stabilized apartment is to move from 
          the building on or after the effective date of this Order, the 
          owner may immediately charge that tenant the full increase for the 
          period during which the tenant was in possession on or after such 
          effective date.

          4.   A tenant who has a valid Senior Citizen Rent Increase 
          Exemption (SCRIE) is exempt from that portion of the MCI increase 
          which causes the rent to exceed 1/3 of the total disposable 
          household income.  If the MCI increase caused the rent of any 
          Senior Citizen to exceed 1/3 of his or her income for the first 
          time, such tenant may apply for a SCRIE to the NYC Department of 
          the Aging by calling (212)240-7000.

          5.   As to any apartment which was subject to Rent Control at the 
          time the instant application was filed and which subsequently 
          became subject to Rent Stabilization jurisdiction, the Commissioner 
          notes that since the free market rent charged the first stabilized 
          tenant included any and all services then being provided, and in 
          the absence of a fair market rent appeal, the rent increase 
          provided for in this order is not collectible from the first 
          stabilized tenant or any subsequent tenant of such apartment.


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