Docket No.:  DF 430031
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF
                                                 ADMINISTRATIVE      APPEAL
             JOSEPH O. BRUSCO,                   DOCKET NO. DF 430031 RO   
                                                 D.R.O. DOCKET NO.
                                                 BD 410690-OM 

          On June  13,  1989,  the  above-named  petitioner-owner  filed  an
          Administrative Appeal against an order issued on June 2, 1989,  by
          the District Rent Administrator, 92-31 Union Hall Street, Jamaica, 
          New York, concerning the housing accommodations known as  42  West
          76th Street, New York, New York.  

          Subsequent thereto the owner filed a  petition  in  Supreme  Court
          pursuant to Article 78  of  the  Civil  Practice  Law  and  Rules,
          requesting  that  the  court  direct  the  Division  to  issue   a
          determination of the owner's administrative appeal.

          The issue  herein  is  whether  the  District  Rent  Administrator
          properly  determined  the  owner's  (Major  Capital   Improvement)
          application for a rent increase based upon the installation  of  a
          boiler and heating system.

          The owner initiated the proceeding below by filing an  application
          for MCI rent increases on April 27, 1987.

          Four tenants answered the owner's  application  in  September  and
          October, 1987 alleging, in essence, that the owner's  improvements
          constituted  necessary  maintenance,  but  not  a  Major   Capital

          The District Rent Administrator's order, appealed  herein,  denied
          the owner's MCI application for a rent  increase  because  of  the
          existence of a building-wide service reduction order.   The  owner
          was advised that he may resubmit his application upon restoration. 

          On appeal, the petitioner-owner contends that, to  his  knowledge,
          there is no building-wide service reduction  order  and  that  the
          District Rent Administrator's order should be reversed.

          After a careful consideration of the entire  evidence  of  record,
          the Commissioner is of the opinion that the administrative  appeal
          should be remanded to the District Rent Administrator for  further
          processing of the owner's MCI rent application which was filed  on
          April 27, 1987.

          Rent increases for major capital improvements  are  authorized  by

          Docket No.:  DF 430031

          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.   

          However, the DHCR will not grant an owner an increase, in whole or 
          in part, if the owner is not maintaining all required services  or
          if there is an outstanding building-wide service reduction, unless 
          the owner filed for a restoration and the DHCR issued  a  positive

          The record in the instant case shows that on  November  13,  1986,
          the tenant in occupancy of apartment 1-B (Miriam Schottland) filed 
          an individual statement of complaint of decrease in services under 
          docket no. AK 410266-S and  that  an  order  (ZAK  410049-HW)  was
          issued on December 17, 1986 denying the  tenant's  application  on
          the ground that the tenant had subsequently acknowledged that  the
          conditions in the complaint had been corrected.

          On July 1, 1987, however, the District Rent Administrator issued a 
          second order reducing the rent of apartment 1-B due to t e  water-
          staining of the rear room based upon an inspection.

          The Commissioner notes that on November 20, 1989,  the  owner  was
          advised by the District Rent Administrator, that Miriam Schottland 
          vacated apartment 1-B and  that  the  owner  should  file  a  rent
          restoration application.

          Subsequently,  the  District   Rent   Administrator   issued   two
          restoration orders as follows:

               (1)  March 5, 1990:      Docket Nos.: ZDH 410104-OR
                                                     ZAK 410266-S

               (2)  August 15, 1990:    Docket Nos.: ZEA 410032-OR
                                                     ZAK 410266-S

          The March 5, 1990 order was predicated on the tenant's failure  to
          provide access to the inspector to view the rear room  water-stain

          Docket No.:  DF 430031

          The August 15, 1990 order was predicated on an inspection held  on
          July 20, 1990, which showed  that  water-stain  repairs  had  been

          Accordingly,  the  Commissioner  finds   that   in   the   instant
          proceeding  there   was   no   basis   for   the   District   Rent
          Administrator's denial of the owner's MCI application,  which  was
          predicated on the existence of a building-wide  service  reduction

          The record clearly shows that the rent was previously restored and 
          that there  is  no  outstanding  building-wide  service  reduction

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

          ORDERED, that this petition be, and the same hereby is, granted to 
          the extent of remanding  this  proceeding  to  the  District  Rent
          Administrator for further processing in accordance with this order 
          and opinion.


                                          ELLIOT SANDER
                                          Deputy Commissioner


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