DOCKET NO.:  DA 410191-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



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     IN THE MATTER OF THE ADMINISTRATIVE   :   S.J.R. 4828
     APPEAL OF                                 ADMINISTRATIVE APPEAL
                                           :   DOCKET NO. DA 410191-RO
                FRANK VELTRI,                  DRO DOCKET NO. CA 410084-RP
                              PETITIONER   : 
     --------------------------------------X

                  ORDER AND OPINION DENYING ADMINISTRATIVE APPEAL

     On  January  20,  1989,  the   above-named   petitioner-owner   filed   an
     Administrative Appeal against an order issued on December 19, 1988, by the 
     District Rent Administrator, 92-31 Union Hall Street, Jamaica,  New  York,
     concerning the housing accommodations known as 67 West  68th  Street,  New
     York, New York, Apt. 5B.

     Subsequent thereto, the petitioner filed a petition in the  Supreme  Court
     pursuant to Article 78 of the Civil Practice Law and Rules requesting that 
     the "deemed denial" of his administrative appeal be annulled.

     On July 27, 1989, an  order  was  signed  by  Justice  Diane  A.  Lebedeff
     remitting the proceeding to  the  Division  for  a  determination  of  the
     petitioner's administrative appeal.

     On January 11, 1990, the Commissioner issued an order and opinion  denying
     the petitioner's administrative appeal.

     Subsequent thereto, the petitioner filed a petition in the  Supreme  Court
     pursuant to Article 78 of the Civil Practice Law and Rules requesting that 
     the order of the Commissioner be annulled.

     On May 25, 1990, an order was  signed  by  Justice  Irma  Vidal  Santaella
     remitting the proceeding to the Division for further consideration.

     The Administrative Appeal is being considered pursuant to  the  provisions
     of 9 NYCRR 2202.4.

     The issue herein is whether  the  District  Rent  Administrator  correctly
     determined the rent increase to which the owner is entitled.

     A review of the record indicates that on November 18, 1986,  the  District
     Rent Administrator issued an order increasing the  maximum  rent  for  the
     subject apartment by $333.68 per month, effective as  of  the  first  rent
     payment day after the date of issuance of the order, based upon  increased
     services, new equipment or improvements to  the  apartment  to  which  the
     tenant had consented.  It was noted in the order  that  such  improvements
     consisted of a new refrigerator, a new gas range, three  primary  windows,
     a new apartment entrance door, a new kitchen sink, new kitchen cabinets, a 
     new bathtub, a new bathroom basin with vanity, and new bathroom cabinets.

     On February 13, 1987, the tenant refiled an administrative appeal  against






          DOCKET NO.:  DA 410191-RO
     the District Rent Administrator's order wherein she alleged, in substance, 
     that she did not give her consent to the work; that most of the work  only
     involved repairs; that the owner's  bills  were  insufficiently  specific,
     overlapping, duplicative, misrepresentative, and contradictory;  that  the
     new equipment and improvements do not support  a  finding  that  the  rent
     should be increased by $333.68 per month; and that there is  no  authority
     in law for granting this increase which is equivalent to 150% of her rent.

     Subsequent thereto, the tenant filed  a  petition  in  the  Supreme  Court
     pursuant to Article 78 of the Civil  Practice  Law  and  Rules  requesting
     that the "deemed denial" of her administrative appeal be annulled.

     On September 18, 1987, an order was signed by Justice Kenneth  L.  Shorter
     remitting the proceeding to the Division for an  evidentiary  hearing  and
     additional consideration.

     On January 4, 1988, the Commissioner issued an order and opinion remanding 
     the proceeding to the District  Rent  Administrator  for  such  additional
     processing.

     On June 3, 1988, a hearing was held at which the  owner  and  the  tenant,
     both represented by counsel, appeared.  Two witnesses for the  owner  also
     appeared.

     On December 19, 1988, the District Rent  Administrator  issued  the  order
     appealed herein.  The District Rent  Administrator's  order  modified  the
     prior order of November 18,  1986  by  reducing  the  rent  increase  from
     $333.68 per month to $150.00 per month, such rent increase being effective 
     as of the first rent payment day following November 18, 1986.   The  owner
     was directed to refund any excess rent collected as a result of the  order
     within thirty days.  It was noted in the order that the rent  increase  of
     $150.00 per month was for the installation of a new bathtub, new  bathroom
     sink with vanity, new medicine cabinet, new kitchen sink  and  countertop,
     new kitchen  wall  cabinets,  new  outlets,  new  entrance  door,  an  air
     conditioner outlet, new stove and electric  line,  and  new  refrigerator.
     This order was based upon the evidence of record, including the  testimony
     offered at the hearing and the hearing officer's findings  of  credibility
     with regard to certain testimony.

     On appeal, the petitioner-owner alleged, in substance, that  the  District
     Rent Administrator erroneously calculated the rent  increase  allowed  the
     owner  under  Operational  Bulletin   84-4;   that   the   District   Rent
     Administrator increased the rent by  $150.00  per  month,  a  flat  amount
     suggested by the tenant, which clearly does not reflect 1/40th of the cost 
     of the improvements made by the owner and agreed to by the tenant; that in 
     the "Agreement on Apartment Modifications", the tenant expressly agreed to 
     the installation of new windows; that the District Rent Administrator also 
     failed to allow the owner an increase for new  kitchen  floor  tiles,  new
     bathroom ceramic tiles, a new bathroom door, and plastering and framing of 
     the  kitchen  and  bathroom  done  in  connection  with  the  renovations,
     installed at a total cost of $4,850.00; that  the  tenant  agreed  to  the
     renovations  and  is  obtaining  the  benefit  of  them;  that  the  total
     documented cost of the items  expressly  approved  by  the  District  Rent
     Administrator was $8,497.37 which should have resulted in the minimum rent 
     increase of $212.43 per month; that even an increase of $212.43 per  month
     would not be sufficient to cover the owner's legitimate costs; and that as 
     the tenant agreed to the work done and was aware of what it entailed,  she
     should not now be allowed to pick and choose which  items  for  which  she
     will pay a rent increase.






          DOCKET NO.:  DA 410191-RO

     After a careful consideration of the evidence of  record  before  him  the
     Commissioner was of the opinion that the administrative appeal  should  be
     denied.

     The Commissioner found  that  the  District  Rent  Administrator  properly
     determined, after an evidentiary hearing and further  consideration,  that
     the owner was entitled to a rent increase limited to $150.00 per month for 
     certain specified improvements to the subject apartment  as  the  tenant's
     consent to such improvements was conditioned upon the rent increase  being
     limited to said amount.

     A further review of the record pursuant to Justice  Santaella's  order  of
     remit revealed that the record contained neither the recorded tapes of the 
     June 3, 1988 hearing, nor a  transcript  of  said  hearing,  and  thorough
     search  failed  to  produce  such  missing  matter.   The   Commissioner's
     determination was predicated upon certain findings of credibility made  by
     the hearing officer presiding at the June 3, 1988 oral hearing.   However,
     without a record of the hearing, a defense  of  the  Commissioner's  order
     would not survive a Court challenge based  on  due  process  grounds.   In
     addition, the Appellate Division has ruled in another proceeding that  the
     Division must file a transcript of an oral hearing conducted by the agency 
     with the court pursuant to the provisions of CPLR 7804(e).  In view of the 
     foregoing, it was the opinion of the  Commissioner  that  another  hearing
     should be conducted, after which this matter  would  be  reconsidered,  de
     novo, on the basis of the written evidence of  record  and  the  testimony
     and evidence offered at such new hearing.  The  hearing  officer's  report
     and findings relating to the prior hearing conducted on June 3, 1988 would 
     be disregarded and not affect such further consideration of this matter.

     On February 13, 1991, a hearing was conducted at which the owner  and  the
     tenant appeared, both represented by counsel.  

     The owner testified that in 1984 a severe problem  developed  wherein  the
     pipes beneath the bathtub in the subject apartment  severely  leaked  into
     Apt. 4B below.  The repair work required  the  temporary  removal  of  the
     tenant from the apartment and the tenant vacated at her  convenience  from
     the end of June to October 1984.  The tenant asked the owner to put  in  a
     new kitchen and bathroom and the owner offered her the opportunity to pick 
     the cabinets, appliances and the colors.   The  tenant  agreed  to  pay  a
     percentage  of  the  increase  and  signed  an  Agreement   on   Apartment
     modification that she drew up herself on paper given to her by the owner.

     Although the owner did the demolition work himself he submitted bills  for
     the bathroom fixtures, kitchen fixtures and plumbing work ($4,400 Vin  Ray
     and successor in interest to DY Plumbing) carpentry,  plastering,  tiling,
     kitchen cabinets, new aluminum windows, new entrance door and door saddle, 
     new door to  bathroom  and  medicine  cabinets  ($6,675  -  John  Bonnano,
     contractor), entrance door (General Fireproof Door Corp.  -  $340),  range
     and refrigerator ($763.27 Bernie's Discount Center)  and  electrical  work
     ($1,169.10 BCP Contracting).

     The tenant testified that she did agree to the renovations and  wrote  and
     signed the Agreement on Apartment Modifications in June 1984,  adding  the
     windows at a later time.  At the time she signed the agreement she said to 
     the owner that she could not afford more than  a  $100  or  $150  a  month
     increase.  She picked the wood grain kitchen cabinets,  tub  ($150),  sink
     ($120) with vanity ($125), medicine cabinet, range  and  refrigerator  and
     toilet.  The original toilet she picked was $700 and she cancelled it  and






          DOCKET NO.:  DA 410191-RO
     picked a cheaper model at $100.  When asked what color bathroom tiles, she 
     picked yellow.  Since the owner had to replace pipes  under  the  bathtub,
     demolition work should not be included.  She  agreed  to  tiles  one  foot
     above tub but extra tiles were added and she felt the owner should pay for 
     tiles and installation.  The  windows  in  the  apartment  were  defective
     (frames separated from glass) and they were not a  part  of  the  original
     agreement.  She did not ask for floor cabinets in the kitchen and did  not
     understand that there would be a new floor in the kitchen.   She  selected
     the fixtures and took an active part in an attempt to limit  the  cost  to
     $4,000.

     Based on the testimony of the parties  and  the  evidence  submitted,  the
     Administrative Law Judge made the following findings:

     In 1984, pipes located beneath the floor of the bathroom  of  the  subject
     apartment  broke  causing  severe  leak  problems  to  Apartment  4B,  the
     apartment below.  In order to effectuate permanent repairs to these  pipes
     it was determined that it would be necessary to tear up  the  floor  under
     the tub and the owner and the tenant agreed that the tenant  would  vacate
     the apartment during the summer  of  1984  in  order  that  the  necessary
     repairs could be made.  The owner  and  the  tenant  also  agreed  between
     themselves that certain improvements would be made to  the  apartment  for
     which the owner would be compensated in  the  form  of  a  rent  increase.
     There is no dispute that all of the claimed work was done.

     Section 2202.4(a) of the Rent Regulations authorizes an  increase  in  the
     maximum rent of a rent controlled housing accommodation  where  the  owner
     and the tenant by mutual  voluntary  written  agreement,  subject  to  the
     approval of the Administrator, agree to a substantial increase  or  change
     in the services or equipment provided in the housing  accommodation.   The
     tenant must understand that the owner will be seeking a rent increase  for
     the improvements, and where the owner or tenant places a dollar figure  on
     the projected rent increase, the ordered rent increase may not exceed such 
     figure.

     The owner testified at the hearing that the tenant drew up  the  Agreement
     on Apartment Modifications in June 1984 that she signed.  She later  added
     the three windows, one with screen.  The tenant  testified  that  the  old
     windows were defective in that the glass was separated from the frame  and
     she did not intend to include a rent increase for their replacement.   The
     agreement also includes the statement "tiles according to verbal agreement 
     around the tub" and the tenant credibly testified that the  tiles  on  the
     wall in the bathroom were to be  extended  to  a  greater  height  in  the
     bathtub area than in the rest of the bathroom at no cost  to  the  tenant.
     Although the agreement  does  not  provide  for  a  toilet  or  stove  and
     refrigerator, the tenant did choose each appliance.








          DOCKET NO.:  DA 410191-RO

     In view of the foregoing, the Administrative Law  Judge,  found  that  the
     owner and the tenant mutually agreed only to the  following  improvements:
     1) bathtub; 2) sink with wood grain vanity;  3)  large  mirrored  medicine
     cabinet with sliding doors; 4) new kitchen sink and counter top;  5)  wood
     grain cabinets on two walls; 6) new outlets; 7) new entrance door; 8)  air
     conditioner  outlet;  9)  new  stove  and  electric  line;  and  10)   new
     refrigerator.

     As to the extent of the agreement, if any, between the parties as  to  the
     amount  of  the  rent  increase  that  the  owner  would  seek   for   the
     improvements, the owner and  tenant  have  different  recollections.   The
     owner testified that he told the tenant that he would leave  the  increase
     up to the discretion of the Division and anticipated that it would not  be
     extravagant.  He observed that the tenant had no objection to the work  as
     it was being done.  The tenant testified that she was actively  trying  to
     keep the job at a minimum cost and could afford to pay no more than a $100 
     to $150 per month increase and so informed the owner.  The  Administrative
     Law Judge found the tenant's testimony credible and further found that her 
     consent to the improvements was conditioned upon an increase not to exceed 
     $150 per month in rent.  Accordingly, the increase in rent,  if  any,  for
     the improvements made by the owner cannot exceed $150 per month.

     The regulations allow the owner an increase in rent equal to 1/40th of the 
     cost of  the  improvements.   Since,  as  set  forth  above,  the  maximum
     allowable rent increase is  $150  per  month,  the  owner  must  establish
     expenditures of $6,000.00.  There is no dispute that at least  $6,000  was
     expended by the owner.

     In view of the foregoing, the Commissioner finds that the maximum rent for 
     the subject apartment should have been increased by $150 per month (rather 
     than $333.68) effective  as  of  the  first  rent  payment  day  following
     November 18, 1986, the date of issuance  of  the  original  order  of  the
     District Rent Administrator.

     The owner is directed to  refund,  within  thirty  days  of  the  date  of
     issuance of this order and opinion, any excess  rent  collected  from  the
     tenant.

     THEREFORE, in accordance with the provisions  of  the  Rent  and  Eviction
     Regulations for New York City, it is 

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

     ISSUED:        


                                                                          
                                                  ELLIOT SANDER
                                               Deputy Commissioner