DHCR Decisions                                  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 NO.:  DB410273RT          APPEAL OF                    THEA GELLER,                                                   RENT ADMINISTRATOR'S                                                   DOCKET NO.:  BG430180OM                                   PETITIONER          -------------------------------------X          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW          The above named petitioner-tenant timely filed a petition for          administrative review (PAR) against an order issued on January 18,          1989, by the Rent Administrator (Gertz Plaza) concerning the          housing accommodations known as 348 East 66th Street, apartment 8,          New York, New York, wherein the Rent Administrator determined that          the owner was entitled to a rent increase based on the installation          of a major capital improvement (MCI).          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 the proceeding below by filing its MCI          application in July of 1987. In response to the owner's MCI          application, the petitioner filed an answer, stating, in substance,          that her original lease for Apt. 8 started from March 1, 1986 which          was over one year after the installation of the boiler; that there          is a pending rent overcharge complaint under Docket No. AL410625R          since the rent was raised 992% between the prior tenant's vacancy          and this occupancy; and that it should be presumed that the          landlord would have calculated into the new rent any improvements          performed on the subject building one year prior to the signing of          the said lease.          The owner responded to the tenant's objections by contending, in          substance, that the tenant's initial lease did not reflect any          increase due to the subject MCI; and that the tenant's fair market          appeal was denied.  In support of its contention, the owner          submitted a copy of the initial lease.          The Rent Administrator's order, appealed herein, granted a major          capital improvement rent increase predicated on the installation of          a new boiler/burner at a total approved cost of $30,390.00.          ADMIN. REVIEW DOCKET NO. DB-410273-RT          In this petition for administrative review, the petitioner-tenant          requests reversal of the Administrator's order and contends, in          substance, that Apt. 8 was initially rented to her on March 1, 1986          which was over one year after the installation of the new          boiler/burner; that it was understood that the boiler improvement          was figured into the 992% rent increase charged by the landlord in          the lease dated March 1, 1986; that paying an additional $3.39 per          month as the order suggests is paying for same boiler improvement          twice; and that in a building with 39 apartments, the current          monthly rent for Apt. 8 of $781.17 represents over 6«% of the          yearly residential rent receivable.          After a careful consideration of the entire evidence of record, the          Commissioner is of the opinion that the Administrative Appeal          should be granted, as provided herein below.          Regarding the petitioner's contention that she took occupancy after          the installation was completed, the Commissioner notes that such          contention is not sufficient in itself to obviate the tenant's          obligation to pay rent increases duly approved by the Division.            The  Commissioner further notes that in this proceeding it is clear          that the owner's application was not pending before the Division          when the petitioner took occupancy of the apartment since the          petitioner's initial lease began on March 1, 1986 while the owner          did not file the application for a rent increase until July of          1987.          However, as to the petitioner's contention that the boiler          improvement was already figured into the new rent charged in the          initial lease, the Commissioner notes that the petitioner is the          first tenant to occupy Apt. 8 after it became subject to Rent          Stabilization jurisdiction; and that since the free market rent          charged to the first stabilized tenant included any and all          services then being provided, the MCI rent increase provided for in          the Rent Administrator's order is not collectible from the first          stabilized tenant or any subsequent tenant of said apartment.          THEREFORE, in accordance with the Rent Stabilization Law and Code,          it is          ORDERED, that this petition be, and the same hereby is granted; and          that the Rent Administrator's order be, and the same hereby is,          modified to provide that the subject apartment is exempt from the          increase.  The Administrator's order is hereby affirmed in all          other respects.  The owner is directed to refund to the tenant all          excess rent collected from the tenant arising as a result of the          order and opinion within 30 days from the issuance date indicated          herein below.          ISSUED:                                      ____________________                                                         Joseph A. D'Agosta                                          2            Deputy Commissioner