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

      APPEAL OF                              DOCKET NO.:DD 410209-RT
                                          :             DE 420432-RT
        CHRISTOPHER BOGDAN AND                                   
        CLINTON SCARICH                      RENT ADMINISTRATOR'S
                            PETITIONER    :  DOCKET NO.: BB 430204-OM


      The above-named tenants filed petitions for Administrative Review of an 
      order issued on April 26, 1989 by a Rent Administrator concerning the 
      housing accommodations known as 206 East 10th Street, New York, New York, 
      Various Apartments.

      On April 4, 1987, the owner commenced this proceeding by filing an MCI rent 
      increase application with the agency based on the installation of a new 
      lobby entrance door, intercom, mailboxes, replacement windows and pointing 
      and waterproofing building-wide.

      In response to the owner's application several tenants asserted, in 
      substance, that the window installation was faulty and the windows 
      inadequate.  One tenant asserted, in substance, that the pointing and 
      waterproofing had only been completed on the front of the building while 
      the back and sides' bricks had been coated with a mortar-like substance.

      By agency notice dated July 18, 1988, the owner was requested to respond to 
      the tenants' assertions.  By answers dated August 4, 1988 the owner 
      addressed the tenant's concerns asserting, in substance, that all necessary 
      corrective measures had been taken and that the installation was proper.

      On September 15, and 29, 1988, the agency sent an inspector to the subject 
      premises.  The inspector conducted an inspection of three apartment's 
      windows and verified a room count for one.  By agency notice dated October 
      25, 1988, the owner was instructed to correct those conditions found 

      On November 14, 1988 the owner sent to the agency a sworn statement from 
      the window contractor indicating that necessary corrective measures had 
      been completed as directed by the agency.

      On December 2, 1988 the agency sent the tenants a request for additional 
      information regarding whether the owner had restored services.  One tenant, 
      a petitioner herein, responded, in substance, that of the several items he 
      had objected to only two were inspected for.  The tenant further asserts 
      that he had apprised the inspector of this to which the inspector allegedly 


          DOCKET NUMBER: DD 410209-RT, DE 420432-RT
      responded, in substance, that he would only inspect as instructed by the 
      agency and was thereby limited to a review of the room count and window 
      installation for this tenant's apartment.

      On April 26, 1989 the Rent Administrator issued an MCI rent increase order 
      based on the owner's installation of new aluminum windows building-wide, 
      pointing and waterproofing, new intercom system and new lobby entrance 
      doors.  The mailbox installation as completed was found not to qualify as 
      an MCI installation.

      Two tenants timely filed petitions for administrative review.  In his 
      petition one tenant asserts that the order appealed from was issued based 
      on an incorrect room count.  The other tenant asserts, in substance, that 
      the agency failed to address several pertinent complaints made when the 
      proceeding was before the Administrator, required services had not been 
      maintained, the retroactive portion of the rent increase is incorrect and 
      that the installations do not meet "durability" standards.  This tenant 
      submits two photographs showing areas of the building's walls on which the 
      mortar-like coating has crumbled revealing bricks and what appears to be 
      deteriorated mortar underneath.

      The owner responds conceding that the MCI rent increase was based on an 
      incorrect room count but asserts that a larger room count is actually to 
      the tenants' advantage as it results in a smaller rent increase per room.  
      The owner further asserts, in substance, that in all other respects he 
      believes that the MCI rent increase order was properly issued. 

      After careful consideration of the entire evidence of record, the 
      Commissioner is of the opinion that this proceeding should be remanded to 
      the Rent Administrator for further processing.

      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 the Rent Stabilization 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, preservation, 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.

      The record discloses that the Administrator properly applied these 
      principles to the owner's MCI rent increase application, and, with the 
      exception of the pointing and waterproofing installation, those 
      installations for which rent increases were allowed fit the above 
      definition and their costs where substantiated by the owner.

      Regarding the pointing and waterproofing installation, it is noted that 
      when this proceeding was before the Administrator below, the petitioner 
      asserted, in substance, that this installation appeared incomplete and that 
      although the agency sent an inspector to inspect for the windows and room 
      count, no inspection was made of the pointing and waterproofing 
      installation.  The record further reveals that after the owner had attended 
      to that which the agency had directed be corrected, the petitioner again 

          DOCKET NUMBER: DD 410209-RT, DE 420432-RT
      asserted that several installations remained inadequate and added that he 
      believed that the inspection had not been inclusive.  Accordingly, the 
      Commissioner is of the opinion that this proceeding should be remanded to 
      the Rent Administrator for further processing including an inspection of 
      the pointing and waterproofing installation.
      Although one petitioner asserts that the retroactive rent computation is 
      incorrect, the tenant has not explained how it is wrong and after a careful 
      review of the record the Commissioner finds that, as the retroactive rent 
      computations appear on the order appealed from, they are correct.

      On appeal one petitioner asserts and the owner concedes that there is a 
      room count discrepancy as reflected in the order appealed from.  
      Accordingly, the Rent Administrator is urged to consider the room count on 

      Regarding the tenant's assertions that the required services have not been 
      maintained, the Commissioner notes that this order is issued without 
      prejudice to the tenant's rights to file services complaints if the facts 
      so warrant.

      THEREFORE, pursuant to the Rent Stabilization Law and Code and the Rent and 
      Eviction Regulations for New York City, it is

      ORDERED, that this petition be, and the same hereby is, granted to the 
      extent of remanding this proceeding to the Administrator for further 
      processing in accordance with this order and opinion.  The order and 
      determination of the Administrator remains in full force and effect until 
      a new order is issued on remand.


                                           JOSEPH A. D'AGOSTA
                                       Acting Deputy Commissioner



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