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   ADMINISTRATIVE REVIEW
          IN THE MATTER OF THE ADMINISTRATIVE     DOCKET NOS.: 
          APPEALS OF                              DB110124RT, DB110125RT,
                                                  DB110129RT, DB110148RT,
                  Various Tenants of              DB130266RT, DC110080RT,
                  Parkway Apartments, Phase III   DC110059RT, DC110093RT,
                               PETITIONER         DC110094RT, DC110100RT,
                                                  DC110111RT, DC110112RT,  
                                                  DC110360RT, DC110419RT
          ------------------------------------X   
                                                       
                                                  RENT ADMINISTRATOR'S 
                                                  DOCKET NO: AD110013OM

            ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW

          The above-named tenants timely  filed petitions for administrative 
          review against an order issued on February 7th, 1989, by the Rent 
          Administrator, Gertz Plaza, Jamaica, New York concerning the 
          housing accommodations known as various apartments of Parkway 
          Apartments, Phase III, namely 71-40 to 71-70, 71-02 to 71-24 252nd 
          Street; 251-02 to 251-32, 251-38 to 251-40, 251-01 to 251-11, 251- 
          15 to 251-61 71st Road; and 251-42 to 251-44 71st Avenue, 
          Bellerose, New York.

          Since these petitions involve common issues of law and fact, they 
          have been consolidated for a uniform disposition.

          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 these petitions.

          This proceeding was commenced on April 1, 1986, by the owner of the 
          subject housing complex filing of an application for a rent 
          increase based on the installation of major capital improvements 
          (MCI), to wit: a new roof including insulation, leaders and 
          gutters; aluminum replacement windows building-wide; pointing and 
          waterproofing; adequate plumbing including new faucets, hot water 
          recirculating and distribution system; rehabilitation of the 
          heating system consisting of the installation of pumps and air 
          valves; building entrance and basement entry doors; new bell and 
          buzzer system; walkways, driveways, stoops and railings; removal of 
          rubble from job site; basement clean-up to provide work area;


          Adm. Rev. Docket No. DB110124RT














          and the renovation of 80 vacant apartments. The total claimed 
          amount for these installations was $1,432,928.12.

          The owner certified that on August 20, 1986, it served each tenant 
          with  copies of the application form, notice form, and  answer 
          form.

          Six tenants (apartments 8A, 77A, 33B, 39B, 47B and 74B) filed 
          objections to the owner's application and contended, in substance, 
          that the improvements were necessary; the proposed rent increase 
          was exorbitant and would cause a hardship; they were not aware of 
          any improvements done except new windows and repairs to the front 
          porch (47B, 77A); the window sashes did not fit, the vestibule 
          ceiling leaked, and the living room wall needed to be waterproofed 
          (39B); and the only improvement done to the inside of the apartment 
          was new windows (8A).

          In December 1988, the Division mailed to 41 tenants of the subject 
          premises a "Notice to Tenant of Opportunity to Respond to 
          Application". Seven tenants responded and alleged in substance as 
          follows:

          Apartment 74B --- Most of the work was completed three or four 
          years prior to the owner's application; the windows were drafty; 
          there was no bell/buzzer system; the front door lock stuck; the 
          work constituted necessary repairs; the complex was going co-op and 
          the work was done to make the property more attractive.

          Apartment 48B --- No replacement windows were installed since he 
          commenced occupancy in September of 1981; the walkways, 
          waterproofing and pointing had begun, but had not been completed; 
          and he had no knowledge of plumbing, a bell/buzzer system, doors or 
          roof system being done.

          Apartment 47B --- The roof was patched, but was not replaced; he 
          was not aware of any plumbing work; the apartment door was not 
          replaced; and there was no new bell/buzzer system installed.

          Apartment 27B --- The improvements were made to bring the building 
          into a habitable condition; the complex was going co-op and the 
          owner would be compensated for the improvements.

          Apartment 8A  --- No bell/buzzer system was installed; the windows 
          were replaced, but the molding which holds the windows was not





          Adm. Rev. Docket No. DB110124RT










          replaced; he was not aware of any new roof installation; the 
          entrance door was painted poorly and the design molding was not 
          replaced.

          Apartment 23A --- There were no new bell/buzzer system or walkways 
          installed; shutters and moldings were installed outside; and he was 
          not aware of any other improvements except the stucco which was 
          applied to the exterior walls.

          Apartment 17B --- She could not determine if the roof was repaired 
          or replaced; she did not consider a new dishwasher shut off valve 
          to be new plumbing; a new bell was installed, but there was no 
          buzzer system; the pointing and waterproofing were not done 
          properly as a leak still existed in her apartment; the windows, 
          building door and walkways were replaced out of necessity; the 
          apartment door and window moldings were not replaced; and the 
          walkways were beginning to crack.

          Agency inspections conducted on January 12, 13, 19 and 20, 1989 
          indicated that there was no evidence of leaks in apartment 47B, 
          that the window installation in apartment 74B was adequate, but 
          that the key stuck in the front door lock. The inspection also 
          revealed that no new bell and buzzer system had been installed for 
          either of the two above-mentioned apartments. The inspector was 
          denied access to apartments  8A, 39B and 48B.  

          The order of the Rent Administrator granted, in part, the owner's 
          application and authorized an increase for a new roof, replacement 
          windows, plumbing, front entrance and basement doors, pointing and 
          waterproofing, walkways, driveways and stoops. The total approved 
          MCI cost was $853,762.85, and the rent increase per room per  month 
          was $22.34, effective October 1, 1986 and collectible March 1, 
          1989.

          Disapproved by the Rent Administrator were the claimed costs of: 
          the renovation of 80 vacant apartments ($488,637.90); removal of 
          rubble from the job site ($5,642.00); basement cleanup to provide 
          a working area ($3,990.00); railings ($19,740.00); and the 
          rehabilitation of the heating system ($47,521.60) upon a finding 
          that these installations did not qualify as MCI's. The cost of a 
          new bell and buzzer system ($13,573.95) was disallowed because no 
          such installation was discovered in the two apartments which were 
          inspected. The Administrator also excluded $59.82 of sales tax from 
          the cost of the installations.



          Adm. Rev.Docket No. DB110124RT 



          In their petitions the tenants contend, in substance, that the 
          owner's application was not timely filed; they were never notified 












          of the owner's application or given the opportunity to respond; the 
          work done was not an MCI, but rather a necessary 
          repair/replacement; some of the installations were never done, were 
          not completed or are defective; the improvements were made for the
          purpose of converting the premises to a cooperative; and none of 
          the apartments were inspected. Several of the tenants complain of
          the owner's failure to maintain services within their apartments. 
          The tenants of apartment 38A claim that they have been paying 
          $15.00 per month for the MCI's since the commencement of their last 
          lease in August of 1987, they still owe $1600.00, and this balance 
          should be dropped since they are purchasing their apartment.

          In response to the tenants' petitions the owner contends, in 
          substance, that its application was timely filed; that the 
          installations conform with agency standards for MCI's; that the 
          fact that the improvements were necessary is irrelevant; that the 
          tenants were properly notified of the owner's application; and that 
          the owner is entitled to a rent increase pursuant to the law and 
          regulations.

          After a careful consideration of the entire evidence of record, the 
          Commissioner is of the opinion that these petitions should be 
          denied.

          Rent increases for major capital improvements are authorized by 
          Section 2522.4 of the Rent Stabilization Code for rent stabilized 
          apartments. 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 evidence of record in the instant case indicates that as to 
          those items for which a rent increase was granted, the owner 
          substantiated its application by submitting contracts, proposals, 
          invoices, contractors' certifications, affidavits and cancelled 
          checks for the work in question. On the other hand, the tenants 
          have not submitted any evidence to support any of their 
          allegations. The Commissioner  finds that the owner correctly 
          complied with the application procedures for MCI's and that the 
          Administrator properly computed the appropriate rent increase. The 
          tenants have not established that this rent increase should be 
          revoked.



          Adm. Rev. Docket No.DB110124RT

          With regard to the tenants' contention that they were never served 
          with a copy of the owner's application or given the opportunity to 
          respond, the Commissioner notes that the owner certified (in 
          accordance with procedures then in effect) as to having served all 
          tenants in occupancy on August 20, 1986 with copies of its 
          application; that six tenants (including the petitioner-tenants of 






          apartments 8A and 74B) submitted answers to the owner's 
          application; that 41 tenants, including all of the petitioner- 
          tenants, were served in December 1988, by the Administrator with 
          notices of the instant proceeding, and that ten of the petitioner- 
          tenants (5A, 12B, 16B, 14B, 30A, 35B, 38A, 45B, 46A and 3B) failed 
          to respond thereto while this proceeding was pending before the 
          Administrator. Accordingly, the Commissioner finds that the tenants 
          were provided proper notice and an opportunity to respond to the 
          owner's MCI application when this proceeding was before the 
          Administrator. Fundamental principles of the administrative appeal 
          process and Section 2529.6 of the Rent Stabilization Code prohibit 
          a party from raising issues on appeal which were not raised below. 
          The tenants of said apartments could have raised the very issues 
          before the  Rent Administrator which they now seek to raise for the 
          first time on appeal. Accordingly, the Commissioner is constrained 
          to foreclose consideration of these issues in this appeal 
          proceeding (Docket numbers: DB110124RT, DB110125RT, DB110129RT, 
          DB110148RT, DC110080RT, DC110093RT, DC110094RT, DC110360RT, 
          DB130266RT and DC110419RT).

          Section 2522.4 (a)(8) of the Rent Stabilization Code  (which became 
          effective on August 1, 1987) provides, in pertinent part, that MCI 
          applications must be filed within two years of the completion date 
          of the installation. The owner's application was filed on April 1, 
          1987, before the two year rule was in effect. Accordingly, the 
          Commissioner finds that the filing of the application was timely.

          The Commissioner notes that the tenant of apartment 8A made several 
          allegations as to the defectiveness of the various installations. 
          However, despite this tenant having received an agency notice of 
          inspection for January 12, 1989, the inspector could not gain 
          access to the apartment on that date nor on the following date 
          (January 20, 1989) that the inspector visited the subjected 
          premises. Accordingly, the Commissioner rejects this tenant's 
          contentions on appeal.

          It is the established position of the Division that the various 
          installations recognized by the Administrator meet the definitional 
          requirement of an MCI as stated in Section 2422.4(a)(2)(i) of the 
          Rent Stabilization Code. The fact that the improvements were 
          needed, as claimed by the tenants, underscores the propriety of the 
          owner's application.


          Adm. Rev. Docket No. DB110124RT


          With regard to the tenant's contention that the improvements were 
          made for the purpose of converting the premises to a cooperative, 
          the Commissioner notes that this fact does not affect the propriety 
          of the Administrator's order and is not a bar to the owner 
          receiving a rent increase.

          With regard to the tenant of apartment 74B who complains that 












          "boiler number ten (10) doesn't give enough heat", the Commissioner 
          notes that the MCI rent increase order appealed herein did not 
          involve a boiler installation nor was any increase granted for 
          claimed repairs to the heating system. Therefore, this tenant's 
          complaint is not relevant to the instant proceeding. It is further 
          noted that there are no outstanding heat or hot water complaints on 
          file with the agency for the subject building. This order and 
          opinion is issued without prejudice to the right of this tenant or 
          any tenant to file applications for rent reductions based 
          on a diminution of services, if the facts so warrant.

          With regard to the tenants' (apartment 38A) contention that they 
          have been paying a $15.00 rent increase for the MCI's since August 
          of 1987, the Commissioner notes that the Rent Stabilization Code
          precludes an owner from collecting an increase predicated on an MCI 
          unless and until an order is issued by the Division authorizing the 
          collection of same. This order and opinion is issued without 
          prejudice to the tenants' right to file an individual complaint of 
          rent overcharge, if the facts so warrant.

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

          ORDERED, that these petitions be, and the same hereby are, denied, 
          and that the Rent Administrator's order be, and the same hereby is, 
          affirmed.

          ISSUED:








                                                                             
                                                  JOSEPH A. D'AGOSTA
                                                  Deputy Commissioner

    

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