OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          -------------------------------------X   ADMINISTRATIVE REVIEW
          APPEAL OF
                    THEA GELLER,
                                                   RENT ADMINISTRATOR'S
                                                   DOCKET NO.:  BG430180OM



          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 

          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

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