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

         APPEAL OF                               DOCKET NO. DK 130374-RT
                     VARIOUS TENANTS,           :   D.R.O. DOCKET NO.
                                 PETITIONERS :           BF-130100-OM



         The above-named petitioner tenants timely filed a Petition for 
         Administrative Review against an order issued September 28, 1989, by 
         the Rent Administrator at Gertz Plaza, Jamaica, New York, concerning 
         the housing accommodations known as various apartments at 23-14 28th 
         Street, Astoria, New York, wherein the Administrator granted the 
         application of the owner (Anastassios S Kassaridis) to increase the 
         rentals based on installation of Major Capital Improvements.

         The Commissioner has reviewed all the evidence in the record and has 
         carefully considered that portion of the record relevant to the issues 
         raised in the administrative appeals.

         The owner commenced the proceeding below on June 15, 1987 by filing an 
         application to increase the rentals for rent controlled and stabilized 
         apartments based on the installation of Major Capital Improvements 
         consisting of thermal, replacement windows.  The owner claimed costs 
         of $31,662.00 for this installation.  In the application the owner 
         indicated that the building contains 25 apartments, including three 
         apartments occupied by the owner's employees.

         Two tenants, Pennie Fein (apartment C-1) and Brian C. Knight 
         (apartment C-2) answered the owner's application.

         Pennie Fein stated that the replaced windows had been in extremely bad 
         condition.  Therefore, the installation of the replacements should not 
         be considered a capital improvement, but, merely ordinary repairs and 
         maintenance.  This tenant also asserted that the application, at item 
         3, contained misinformation in that it did not reflect the fact that 
         two of the 25 apartments in the building were utilized by the owner 
         for commercial purposes (a medical office).  Brian C. Knight stated 
         that the MCI installation had been completed on September 1, 1986; 
         that he had taken occupancy on May 1, 1987 (accepting the apartment in 
         "as is condition) at a rental of $650.00 per month; and, therefore, it

         DOC. NO. DK 130374.RT

         would be unjust to impose on MCI rent increase on him four months 
         after he took occupancy.  Mr. Knight also asserted that the subject 
         installation should be considered ordinary repairs and maintenance for 
         which the owner, and not the tenants should assume financial 

         The owner responded to tenant Fein's answer, in substance, by 
         asserting that the previous windows were in good working order but old 
         and that the MCI installation and requested increase were appropriate.  
         The owner did not reply to the tenant Knight's answer.

         In the order below the Administrator granted the requested increase 
         based on the full, stated cost for installation of the replacement 

         The tenants from nineteen apartments filed one* Petition for 
         Administrative Review.

         On appeal, the petitioner-tenants contend, in substance, as follows:

         1.   Certain tenants took occupancy after the installation and no 
              specific provision advising those tenants of the pendency of 
              the owner's application was contained in their vacancy 

         2.   Said tenants took occupancy at market value rents and 
              therefore the cost of any installed capital improvements 
              should be deemed to have been included in the calculation of 
              their initial rents.

         3.   The windows were not installed properly;

         4.   The windows malfunction; and

         5.   Installation has not been completed in that the new wood 
              trim was not painted and it has subsequently warped and 
              rotted resulting in improper insulation around the windows.

         *The Commissioner received two Petition forms.  One contained the 
         arguments listed below as 1 and 2 and was joined in by five tenants.  
         The other contained the arguments listed below as 3 through 6 and was 
         joined in by the same five tenants and fourteen other tenants.  Both 
         of these documents were docketed under one PAR docket number: DK 
         130374-RT and are hereby consolidated under the aforesaid single 
         docket number pursuant to Section 2529.1 of the Code.

         DOC. NO. DK 130374.RT

         6.   A hallway window at the fourth floor landing was broken by 
              the superintendent and it has not been repaired or replaced.

         Although afforded the opportunity to do so the owner has not filed an 
         answer to the tenants' appeal.

         A review of the record reveals that the owner properly filed the MCI 
         application in the proceeding below, and no showing to the contrary 
         has been made by the petitioners.

         Turning to the merits of the subject petition for Administrative 
         Review, the record in the proceeding below and on this appeal 
         discloses that the owner substantiated its MCI application by 
         submitting to the Administrator documentation in support of the 
         application, including a copy of the contract, the contractor's 
         certification, and cancelled checks for the work herein.

         The Commissioner finds that the petitioner's contentions are not 
         sufficient to establish that the Administrator abused his discretion 
         in issuing the order appealed herein.

         The Commissioner finds that the tenants' contentions numbered 3 
         through 6 herein were not raised below and, therefore, are not within 
         the scope of review on appeal.  The Commissioner also finds that 
         contention 2 is without merit and that contention number one may not 
         be addressed on this appeal as it is a matter of computing each 
         stabilized tenant's rent increase and determining when said increase 
         goes into effect.

         The Petitioners should note nevertheless, as stated at paragraph 2. on 
         the third page of the appealed order,  that for the increases granted 
         by the Administrator's order to be collectible during the term of a 
         lease in effect at the time of the issuance of the order, such lease 
         must contain a provision authorizing the collection of an increase 
         pursuant to a DHCR order; and if such lease is a vacancy lease, that 
         lease must have contained a clause informing the tenant of the pending 
         application and stating: (1) such an application is pending; (2) the 
         docket number of such application; (3) the increase requested; and (4) 
         a description of the installation.  The owner's violation of this 
         provision could result in a rent overcharge determination.

         DOC. NO. DK 130374.RT

         Moreover, if a tenant who took occupancy under a vacancy lease while 
         the application was pending was also the first rent stabilized tenant 
         to  occupy the  apartment after  it was  vacancy decontrolled
         (that is, no longer subject to rent control), the initial legal 
         regulated rent set forth in the vacancy lease is a "negotiated first 
         rent" which reflects the value of the apartment with the windows and
         such stabilized tenants cannot be subject to an MCI increase for the 
         same windows.  However, if such tenant filed a Fair Market Rent 
         Appeal, a determination of such appeal must include an increase for 
         the new windows.        

         Based on the entire evidence of record, the Commissioner finds that 
         the Administrator was not in error, and the order should be affirmed.

         This order is issued without prejudice to the tenants' filing 
         applications with the Division for rent reductions based on a decrease 
         in services, if the facts so warrant.

         THEREFORE, in accordance with the applicable provisions of the Rent 
         Stabilization Law and Code, and the City Rent Law and Regulations, it 

         ORDERED, that this Petition be, and the same hereby is denied; and 
         that the Administrator's order be, and the same hereby is affirmed.


                                            ELLIOT SANDER
                                            Deputy Commissioner

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