STATE OF NEW YORK
                     DIVISION OF HOUSING AND COMMUNITY RENEWAL
                           OFFICE OF RENT ADMINISTRATION
                                    GERTZ PLAZA
                              92-31 UNION HALL STREET
                              JAMAICA, NEW YORK 11433

     ------------------------------------X  SJR NO.: 4050
     IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
     APPEAL OF                              DOCKET NO.: CF 410035-RO
                                         :  
                                            DRO DOCKET NO.: AL 410124-OM
       SANDRA & DAVID VAN BUREN
                           PETITIONER    : 
     ------------------------------------X                             


           ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                AND AFFIRMING COMMISSIONERS PRIOR ORDER AND OPINION


     Pursuant to an order of the court, Mr. Justice Glen, this  proceeding  was
     remitted to the Division for further consideration.

     The instant matter stems  from  an  application  filed  in  February  1987
     wherein the owner of the subject premises known as 132 West  87th  Street,
     New York, New York sought a rent increase  adjustment  predicated  on  the
     installation of new chimney flues for the boiler and hot water heater at a 
     claimed cost of $10,842.61.  The various documentation submitted  included
     a  short  form  contract  dated  January  29,   1986,   the   contractor's
     certification and cancelled checks  in  substantiation  of  the  submitted
     cost.  Said contract provides for the removal of the original  flue  lines
     (aged approximately 90 years), new ceramic flue  tiles  and  masonry  work
     from the boiler room through the  first,second,third  and  fourth  floors,
     through the roof and extending approximately 15 feet above the roof  along
     an adjacent party wall.

     On  April  29,  1988  the  Administrator  issued  an  order  denying   the
     application on grounds "new chimney flues for boiler and hot water heater" 
     do not constitute a major capital improvement.

     In their petitions  for  administrative  review  the  owners  contend,  in
     substance, that the new chimney flue (the interior lining of the  chimney)
     installed in the subject seven  family  dwelling  meets  the  definitional
     requirement of a major capital improvement since  the  work  entailed  not
     only the installation of new ceramic flue  piping  throughout  the  entire
     length of the  chimney  but  also  entailed  the  removal  and  subsequent
     replacement of substantial portions of the masonry  surrounding  the  flue
     pipes in order to gain access to same; and that  said  installation  is  a
     major component of the heating system  and  is  required  for  the  proper
     functioning of some.  The owner also cites the provisions of the  Internal
     Revenue Code as justification for considering the  depreciability  of  the
     work in questions.











          DOCKET NUMBER: 4050; CF 410035-RO
     Tenants responded to the petitions  urging, in substance, things that  the
     requested increase was excessive in view of previously obtained major 
     capital improvement rent increases for among  other  things  a  gas  fired
     heating system; and that the open chimney was for personal benefit of  the
     owner who now occupies and has  possession  of  three  apartments  in  the
     building.

     On March 21, 1988 the Commissioner issued an Order  and  Opinion  Granting
     the owners' petition for administrative  review  and  authorizing  a  rent
     increase adjustment upon a finding that the extensive nature of  the  work
     entailed in the removal and replacement of the  original  flue  pipes  and
     surrounding masonry was tantamount to the construction of a  complete  new
     chimney which substantially  complies  with  he  requirement  of  a  major
     capital improvement.

     Thereafter the tenant of  apartment  4A  commenced  a  proceeding  in  the
     Supreme Court pursuant to Article 78 of the Civil Practice Law  and  Rules
     requesting that the Commissioner's order be annulled.  This resulted in an 
     order of the court remitting this proceeding to the Division  for  further
     consideration.

     In the tenant's Article 78 petition it is urged, in substance, that it was 
     error to have permitted a major capital improvement rent increase  in  the
     absence of the owner's obtaining and  submitting  a  building  permit  and
     complying with the New York City Administrative Code, Section  C26-1501.1,
     regarding the installation of chimneys and required  governmental  testing
     of same; that the chimney improvement benefited apartments, including  the
     owners', with wood burning fireplaces, which her apartment does not  have;
     and that without inspection it is impossible  to  tell  whether  the  flue
     system for the gas fired boiler installed in 1984 was modified or replaced 
     in 1986 as opposed to the fireplace flue system.

     Subsequent to the remission  of  this  proceeding  the  tenant's  attorney
     submitted a copy of an inspection report dated May  25,  1989  wherein  an
     inspector from the Boiler Division of the Department  of  Buildings  found
     the gas fired heat and hot water system functioning properly but issued  a
     violation for the boiler as not having been registered with the Department 
     of Buildings. 

     Thereafter, by letter dated March 26, 1990, the owners'  attorney  stated,
     among other things, that no violation had been  issued  against  the  flue
     installation; that the reconstruction of a chimney  is  not  the  type  of
     building improvement for which a permit is required to be submitted to the 
     DHCR in order to obtain a major capital improvement  rent  increase;  that
     under current Division practice governmental approvals are  only  required
     for service equipment improvements such as a  new  boiler;  and  that  the
     owner did obtain approval  from  the  Department  of  Buildings  that  the
     chimney reconstruction was completed in accordance with all  requirements.
     Submitted therewith was a copy of a sign-off letter from the Department of 
     Buildings dated March 21, 1990 to the effect that  the  work  relative  to
     application No. BN 11651-89 has been  noted  to  have  been  completed  in
     accordance with Department of Buildings Directive No. 14 of 1975.

     As stated in said sign-off letter, Directive No. 14 of  1975  permits  the
     retention by the owner of a licensed professional engineer or registered 
     architect to certify to the Department of Buildings that he inspected 






          DOCKET NUMBER: 4050; CF 410035-RO
     the work approved under the submitted application; and that such work  has
     been completed in  accordance  with  the  Rules  and  Regulations  of  the
     Department.

     Thereafter the owners' attorney submitted to the  DHCR  copies  of:  1)  a
     Building Notice Application, No. 11651/89, filed by the  co-owner  herein,
     David Van Buren, as a registered architect, for the following work "Reline 
     Existing Flue in Existing Masonry Chimney  No  Change  to  USE  EGRESS  OR
     OCCUPANCY";  2)  a  work  permit  under  said  application  number;  3)  a
     certificate of completion signed  by  David  Van  Buren  as  a  registered
     architect and 4)  the  plan  filed  and  accepted  by  the  Department  of
     Buildings  under  application  No.  BN  11651/89.   Said  plan  shows  the
     connection of the boiler and hot water heater to the chimney and  and  the
     areas of the chimney that are to be replaced and the areas  which  are  to
     remain.

     By letter dated June 15, 1990 the owners' attorney stated in  response  to
     an inquiry by the Division, that the work approved by  the  Department  of
     Buildings "did not entail the replacement  or  modification  of  the  flue
     system for wood burning fireplaces."

     By letter dated August 28, 1990 the tenant was afforded an opportunity  to
     comment on the aforesaid submission by the owner's attorney.  No  response
     thereto has been received by the Division.

     After a careful reconsideration of the entire record,  as  amplified  upon
     remit, the Commissioner is of the opinion that the  prior  grant  of  this
     petition for administrative review should be affirmed.

     Rent increases for major capital improvements are  authorized  by  Section
     2522.4 of the Rent Stabilization  Code  for  rent  stabilized  apartments.
     Under this  section  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 items whose useful life has expired.

     As previously stated by  the  Commissioner,  the  installation  of  a  new
     heating system (or major components thereof) constitutes a  major  capital
     improvement for which a rent increase adjustment may be  warranted.  While
     it is clear from the record that the work in question was not performed in 
     conjunction with the gas fired heating and hot water system installed  two
     years earlier, the Commissioner is of the opinion that the installation of 
     a complete new chimney for the purpose of  providing  proper  exhaust  for
     said heating  system  in  and  of  itself  would  meets  the  definitional
     requirements of a major capital improvement.

     Having reviewed the documentation submitted in  the  proceeding  below  as
     well as the documentation submitted on remit, the commissioner is  of  the
     opinion that the relining of the entire brick  chimney  with  new  ceramic
     flue pipes together with related masonry work entailed in the installation 
     of same  was  sufficiently  extensive  and  structural  in  nature  to  be
     tantamount to the installation of a new chimney  which  would  appreciable
     prolong the life of the structure so as to  qualify  as  a  major  capital
     improvement provides such work meets the requirements of law.








          DOCKET NUMBER: 4050; CF 410035-RO
     While the tenant asserts that the  flue  replacement  may  have  been  for
     woodburning fireplace, such speculation  (denied  by  the  owner)  is  not
     supported by the record. On the other hand, the owner has submitted  proof
     in the form of a sign-off letter from the Department of Buildings that the 
     chimney flue reconstruction was  performed  to  the  satisfaction  of  the
     governmental agency having jurisdiction thereof.

     THEREFORE, in accordance with the provisions  of  the  Rent  Stabilization
     Code, it is

     ORDERED, that this petition be, and the same hereby is granted;  and  that
     the Commissioners prior order and the rent  increase  adjustment  provided
     for therein be, and the same hereby is affirmed.

     ISSUED:



                                                                   
                                             ELLIOT SANDER
                                           Deputy Commissioner




                                                   
    

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