DOC. NO. DK 130237-RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          -------------------------------------X  S.J.R. NO. 5413
          APPEAL OF                               DOCKET NO. DK 130237-RO

                    L.M.S. EQUITIES,           :  DISTRICT RENT ORDER
                              PETITIONER       :  DOCKET NO. BD 130304-OM


          On November 28, 1989 the above named petitioner filed a Petition 
          for Administrative Review against an order issued on October 24, 
          1989 by the Rent Administrator, 92-31 Union Hall Street, Jamaica, 
          New York, NY concerning the housing complex known as Georgetown 
          Mews, 69-17 150th Street Flushing, New York, various apartments, 
          wherein the rent increase application was denied.

          On September 28, 1990, the Commissioner issued an Order and Opinion 
          Denying Petition for Administrative Review.  Thereafter the 
          petitioner and the now current holder of all unsold shares 
          (Overseas Commodities, Ltd.) commenced a proceeding in the Supreme 
          Court, pursuant to Article 78 of the Civil Practice Law and Rules, 
          requesting that the Commissioner's order be annulled.  This result 
          in an order of the Court, Justice Joan Marie Durante, remanding the 
          proceeding to the Division for further consideration.

          The instant matter stems from an application filed with the 
          Division on April 24, 1987 wherein the petitioner, as then holder 
          of all unsold shares, sought a major capital improvement rent 
          increase from all rent regulated units in this cooperatively owned 
          housing complex which is comprised of four sections (A-D) 
          containing a total of 38 two-story "building clusters" with 465 
          building address and 930 garden type apartments, approximately one- 
          half of which are cooperatively owned.  The petitioner's 
          application is predicated on total claimed costs of $4,122.621.40, 
          for the following improvements:

               Pointing                                     $  257,850.00

          DOC. NO. : DK 130237-RO

               Masonary including Garage and of chimneys    $  269,723.00
                                                            (added twice)   

               Walkways, Courtyards & Stoops                $  704,987.60

               Adequate Rewiring                            $1,200,000.00

               Mailboxes                                    $   46,077.00

               Roofing                                      $   80,600.00

               Entrance Doors to Apartments                 $   37,950.00

               Front Doors                                  $  225,165.28

               Intercom                                     $   36,469.25

               Windows                                      $1,263,799.17

          The order of the Administrator, which was affirmed on appeal, 
          denied the application upon finding that the petitioner failed to 
          submit written contracts (with the exception of electrical work) 
          for the improvements claimed; that the invoices bear no description 
          of the work performed and are not considered acceptable 
          documentation; that several improvements: roof installation, 
          apartment doors, bell and buzzer system and mailboxes, are not 
          major capital improvements and/or do not benefit all tenants with 
          similar components in the complex; that chimneys are not mentioned 
          in the petitioner's application for Tax Exemption/Tax Abatement 
          and/or additional components needed for the installation; that the 
          petitioner's submission of evidence has no description of the work 
          completed or how many replaced; that several buildings were missing 
          electrical certificates; and that there is a general failure to 
          provide contracts that describe the work performed under the 
          provisions of the Code.

          In its Article 78 petition the petitioner herein contends, among 
          other things, that the order was contrary to established agency 
          policy; that inadequate consideration was given to the New York 
          City Department of Housing Preservation and Developments' 
          Certificate of Eligibility (qualifying the work as a "moderate 
          rehabilitation" as prima facia evidence of proper installation with 
          respect to 9 of the 10 items involved herein; that it was error to 
          have denied the application based on the absence of "original 
          contracts" since the work, for the most part, was performed 
          pursuant to verbal agreements; particularly in view of the

          DOC. NO. : DK 130237-RO

          Division's stated policy recognizing the need for equitable 
          consideration in permitting an applicant to submit alternate proof; 
          that Certificates of Electrical Inspection were submitted for all 
          "building clusters" within the complex which buildings were 
          adequately rewired; and that the Division improperly denied
          rent increases for specific improvements such as roofs, bell and 
          buzzer system, windows, courtyards etc., for which complete 
          installations were made either on a complex-wide or building-wide 

          The Commissioner is of the opinion that the record, as presently 
          constituted, is inadequate for a proper determination of all issues 
          and according to this proceeding should be remanded to the Rent 
          Administrator for further processing in accordance with this order 
          and opinion.

          At the outset the Commissioner notes that the absence of a written 
          contract, in and of itself, may not be the basis for the denial of 
          a major capital improvement rent increase where the owner has 
          submitted other satisfactory evidence of installation and payment 
          therefor.  In addition, it would appear that there was an 
          electrical upgrading of the entire housing complex pursuant to 
          written contract; and that Certificates of Electrical Inspection 
          were, in fact, submitted for all 38 "building clusters" which 
          comprise the complex.  It would further appear that new thermal 
          replacement windows were installed on a complex-wide basis.  In 
          view of the size of the complex (930 apartments) and the number of 
          windows (over 7,500), the fact that minor defects were noted with 
          respect to windows installed in only 15 apartments scattered 
          throughout the complex should not have acted as a complete bar to 
          a major capital improvement rent increase therefor, particularly 
          without investigation of the petitioner's subsequent contention 
          before the Administrator that such defects were timely corrected.

          In view of the foregoing, the Commissioner deems it appropriate to 
          remand this proceeding to the Rent Administrator for further 
          processing and consideration of all issues, and for the issuance of 
          a new determination.  Upon the remand the Administrator may 
          undertake such processing as may be deemed necessary, which may 
          include a physical inspection and/or hearing on notice to all 
          affected parties.  The tenants should be afforded the opportunity

          to respond to any evidence or statements submitted by the 
          petitioner prior to the issuance of the Rent Administrator's order 

          DOC. NO. : DK 130237-RO

          on the remand.  Such order should, on an item by item basis, set 
          forth the specific reasons for the grant or denial thereof.

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

          ORDERED, that this proceeding be, and the same hereby is remanded 
          to the Rent Administrator for further processing in accordance with 
          this order and opinion.


                                             ELLIOT SANDER
                                             Deputy Commissioner


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