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

      APPEALS OF                             DOCKET NOS.:CC410324RT/
                                          :  CC410325RT/CC410326RT/
      VARIOUS TENANTS OF 177 THOMPSON        CC410327RT/CC410328RT
      STREET, NEW YORK, NEW YORK             
                            PETITIONERS   : 
      ------------------------------------X  RENT ADMINISTRATOR'S   
                                             DOCKET NO.: LCS00861OM

                              FOR ADMINISTRATIVE REVIEW

      On various dates, the above named petitioner-tenants timely filed a 
      petition for administrative review (PAR) against an order issued on 
      February 23, 1988 by a Rent Administrator (Gertz Plaza) concerning the 
      housing accommodations known as 177-181 Thompson Street, New York, New 
      York, various apartments, wherein the Rent Administrator determined that 
      the owner was entitled to a rent increase based on the installation of 
      various major capital improvements (MCIs).

      The Commissioner deems it appropriate to consolidate these petitions for 
      disposition since they pertain to the same order and involve common issues 
      of law and fact.

      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 December 4, 1985, by initially 
      filing an application for a rent increase based on the installation of a 
      boiler/burner and windows building-wide at a total claimed cost of 

      The tenants' association of the subject premises (177 Thompson Street) 
      filed a written objection against the owner's application alleging, in 
      substance, that the owner intentionally misled them into having their 
      windows replaced by assuring them that no rent increase would result from 
      this installation.  The tenants who also filed individual responses stated, 
      in substance, that the owner did not consult or obtain their approval for 
      the window installations; that screens were eliminated with the 
      installation of the new windows many of which were drafty and were 
      installed for cosmetic purposes; that the replacement of the old  
      boiler/burner, even by the owner's admission, was necessary as it 
      constantly malfunctioned; that the new boiler had experienced a number of 
      breakdowns which may be attributable to lack of proper maintenance and 
      which also contributed to the early demise of the old boiler/burner.

      A physical inspection of those apartments which questioned the adequacy of 
      the window installation occurred on March 12, 1987 wherein the inspector
      noted that the bathroom and kitchen windows in apartment #2 (which were in


          ADMIN. REVIEW DOCKET NO.: CC410324RT,  et al

      good condition) were not replaced although the other windows in the 
      apartment were; that the window frames in apartment #3 had not been 
      painted; and that it was difficult to either open or close the two bedroom 
      windows and bathroom window in apartment #25.  An inspection of apartment 
      #1 was not conducted as access was not provided by the tenant.  The owner 
      subsequently submitted an invoice for the purchase and installation of two 
      new windows in apartment #2.

      On February 23, 1988, the Rent Administrator issued the order here under 
      review finding that the installations qualified as an MCI, based upon the 
      supporting documentation submitted by the owner, and authorizing rent 
      increases for rent controlled and rent stabilized apartments.  The order 
      noted the inspection conducted on March 12, 1987 and the owner's response 
      advising that the window problems had been rectified.

      In these petitions the tenants contend, in substance, that the former owner 
      gave them assurances that there would be no rent increase for the windows; 
      that the tenants should be relieved of prior rent increases for storm 
      windows installed in 1962; that they have been paying a rent increase for 
      a boiler/burner installed in 1968; that screens were not replaced with the 
      new window installation; that the new boiler/burner has failed on some of 
      the coldest days and there have been periods of 3 to 4 days without heat; 
      that the wooden slats used to eliminate drafts around the windows have been 
      ineffective (apartment 27); and the windows are difficult to operate 
      including opening and closing (apartment #23).  The petitioner-tenant of 
      apartment #25 reiterates that the windows installed in his apartment are 
      defective and submitted an agreement, acknowledged in his own handwriting  
      which he claimed to have reached with Jonis Management Corp., exempting him 
      from the increase charged for the window installation.

      In response to the tenants' petition, the owner stated that heat and hot 
      water is supplied as required by law, and although requesting 30 days to 
      further respond to the tenants claims, no such response was filed.

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

      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.

      The DHCR record reveals that a former owner applied for and received a rent 
      increase for a "heating system modernization" at the subject premises in 
      1968.  The owner on his application, supported by the contract and the 
      contractor's statement, indicated that the new boiler/burner was installed 
      in December 1984.

          ADMIN. REVIEW DOCKET NO.: CC410324RT,  et al

      It has been the long recognized position of the Division, as well as the 
      predecessor Rent Agencies, that the useful life of a boiler is 25-35 years 
      and a burner is 20 years.  In Docket No. ARL11592K the Commissioner 
      affirmed the denial of a rent increase predicated on the fact that a prior 
      "heating system modernization" had not exhausted its useful life.  Since 
      the useful life of the prior heating system installed in the subject 
      premises had clearly not expired at the time of its replacement, the 
      Commissioner is of the opinion and finds that the current installation 
      fails to meet the requirements for a major capital improvement rent 
      increase; and that the rent increase granted for said boiler/burner should 
      be revoked.

      With regard to the tenants' contentions that their rent was permanently 
      increased for storm windows installed in 1962, the Commissioner notes that 
      the useful life of these storm windows had expired pursuant to Policy 
      Statement 89-5, and that the installation of the subject replacement 
      windows qualifies for a full MCI rent increase.

      It is the established position of the Division that the building-wide 
      installation of new windows to replace windows which are 25 or more years 
      old (as in the case herein) meets the requirements for an MCI for which a 
      rent increase adjustment may be warranted, if the owner otherwise so 
      qualifies.  The tenants' unsupported allegations of an assurance by a prior 
      owner not to request a rent increase is insufficient to overcome the 
      supporting documentation submitted by the owner in the proceeding below.

      Moreover, the record indicates that the initial complaints regarding the 
      installation of the windows were addressed in the proceeding below.  
      However, since the petitioner-tenant of apartment #25, one of the tenants 
      whose apartment windows were inspected initially and found to be defective, 
      has raised his complaint anew in his petition for administrative review, 
      the owner is directed to make every effort to correct any defects, if it 
      has not already done so.

      With respect to the tenants' undisputed allegations below, and reiterated 
      on appeal, that their old screens were discarded and not replaced with the 
      new window installation, the owner shall be responsible for replacing the 
      screens in all apartments for which screens are a required/essential 
      service.  The owner is directed to take appropriate action to correct both 
      the window defects in apartment #25, if it has not already done so, and to 
      provide window screens or reimburse the tenants for the purchase of screens 
      within 60 days of issuance hereof.  The owner's failure to comply and the 
      filing of a service complaint within 90 days from the date hereof may 
      result in revocation of the rent increase for the affected apartments in 
      addition to any other penalties which may accrue as a result thereof.  


          ADMIN. REVIEW DOCKET NO.: CC410324RT,  et al

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

      ORDERED, that these petitions be, and the same hereby are, granted in part; 
      that the Administrator's order be, and the same hereby is, modified to 
      provide for a rent increase of $5.19 per room, per month (rather than 
      $8.44) to reflect the elimination of the increase for the boiler/burner; 
      and that as so modified, said order be, and the same hereby is, affirmed 
      subject to the directions contained herein; and it is further 

      ORDERED, that as to the tenants of the rent stabilized apartments, the 
      owner refund any excess rent collected as the result of this order at the 
      rate of 20% per month commencing on the first rent payment date following 
      issuance of this order of the Commissioner until all overpayments have been
      refunded.  As to rent controlled apartments, the owner is directed to 
      refund any excess rent collected within 30 days from the date of issuance 


                                           JOSEPH A. D'AGOSTA
                                           Deputy Commissioner

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