CH 530184-RO


                                  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
          IN THE MATTER OF THE ADMINISTRATIVE     ADMINISTRATIVE REVIEW
          APPEAL OF                               DOCKET NO.:   
                                                  CH 530184-RO
               BARKLEE                   REALTY                    COMPANY,
                                                  RENT ADMINISTRATOR'S
                                                  DOCKET NO.:
                                  PETITIONER      BC 530173-OM   
          ----------------------------------x


            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW   


          On August 18, 1988, the  above-named  petitioner-owner,  filed  a
          Petition for Administrative Review against  an  order  issued  on
          July 19, 1988 by a Rent Administrator, 92-31 Union  Hall  Street,
          Jamaica, NY concerning the housing accommodations, known  as  205
          West 147th  Street,  New  York,  New  York,  various  apartments,
          wherein the Administrator granted in part the owner's application 
          and authorized a major capital  improvement  (MCI)  increase  for
          both the controlled and stabilized apartments in the  subject  16
          family dwelling predicated on the installation of a new roof 
          (including insulation).  Disallowed were claimed costs for  front
          entrance steps ($1,941.00)  and  new  electrical  "pull  box  and
          trough" rewired to service switch ($1,350.00) as not constituting 
          major capital improvements.

          In this petition the owner contends, in substance, that the items 
          disallowed by the Administrator satisfy  the  "generic"  require-
          ments of a major capital improvement; that  since  the  work  was
          performed prior to the promulgation of the current Rent  Stabili-
          zation Code the useful life provisions of Section 2522.4(a)(2)(d) 
          do not apply; that since the formula for hardship increases  does
          not permit a rent increase for capital improvements;  that  there
          is no way for the petitioner to recover the amounts invested  ex-
          cept under the major capital improvement provision; that  in  any
          event the improvements meet the requirements of Section 2202.4(c) 



          of  the  Rent  Regulations;  that  since  the  improvements  were
          intended to be implemented under  a  governmental  loan  program,
          which application was withdrawn because of the  emergency  nature
          of the work, an increase should be allowed under Section  2202.12
          of the Rent Regulations, even if  the  work  does  not  otherwise
          qualify as a major capital  improvement;  and  that  an  increase
          should be granted upon equitable grounds under Sections 2202.3(1) 
          of the Rent Regulations and Sections 2522.4(a)(6) and  2522.7  of
          the Rent Stabilization Code.







          CH 530184-RO

          After a careful consideration of the entire record,  the  Commis-
          sioner is of the opinion that this petition should be denied.

          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 t e  Rent  Stabiliza-
          tion 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,  preserva-
          tion, 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.
          Piecemeal work or  ordinary  repairs  and  maintenance  does  not
          constitute work for which a rent increase adjustment is warranted 
          under current and past procedures.

          At the onset the Commissioner notes that the owner's reference to 
          the useful life provision of the Code (2522.4(a)(2)(d)) is irrel 
          evant in the context of the instant proceeding.  Moreover, relief 
          under Section 2202.12 of the Rent Regulations is not warranted as 
          concededly the work in questions was not  performed  pursuant  to
          and under the auspices of a governmental loan program  so  as  to
          warrant rent restructuring.

          The electrical upgrading of a building consisting of  new  copper
          risers and  feeders  extending  from  the  property  box  in  the
          basement to every housing accommodation  of  sufficient  capacity
          (220 volts) to accommodate the  installation  of  air-conditioner
          circuits would constitute a major capital  improvement.  However,
          the installation of new electrical service without the  extension
          of new risers to individual apartments (as is the  case  herein),
          constitutes a non-depreciable repair for which a rent  adjustment
          was properly disallowed.  Furthermore, it is the established 
          position of the Division that the installation of exterior  steps



          to a building, without the replacement  of  all  exterior  stairs
          does not constitute a major capital improvement. It would further 
          appear that the work in question did not enta l  a  complete  re-
          placement of the front  entrance  stoop  but  rather  the  repair
          thereof.  Thus the Administrator properly denied a major  capital
          improvement rent increase for this item.

          The various sections of the Code and Rent  Regulations  cited  by
          the owner in its petition, which  require  consideration  of  all
          factors bearing on the equities, does not constitute grounds  for
          granting a rent increase for repair work  which,  by  the  nature
          thereof, does not otherwise meet the requirements of a major cap 
          ital improvement under established standards.


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







          CH 530184-RO

          ORDERED, that this petition be, and the same  hereby  is,  denied
          and that the order of the Rent Administrator  be,  and  the  same
          hereby is, affirmed.


          ISSUED:


                                                                           
                                                ELLIOT SANDER
                                                Deputy Commissioner


                                          
    

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