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

      APPEAL OF                              DOCKET NO.: DK410250RO
                                             DOCKET NO.: BD410693OM
                            PETITIONER    : 


      On November 30, 1989, the above named petitioner-owner timely filed a 
      petition for administrative review (PAR) against an order issued on 
      November 1, 1989, by a Rent Administrator concerning the housing 
      accommodations known as 212 Avenue B, 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 this proceeding on April 30, 1987, by filing an 
      application for a rent increase based on the installation of a new 
      boiler/burner at a total cost of $35,000.00.

      The Rent Administrator granted the application in part using the J-51 
      allowable costs schedule based on the contention that the owner failed to 
      submit sufficient evidence of payment.

      The petitioner challenges the Rent Administrator's denial of the total 
      claimed cost of the installation contending, in substance, that 
      verification of payment was obtained from the contractor and the owner's 

      After considering that portion of the record relevant to the issue raised 
      by this petition, the Commissioner is of the opinion that this petition 
      should be granted.

      The evidence of record in the instant case indicates that in lieu of 
      submitting cancelled checks as verification of payment, the Rent 
      Administrator requested an affidavit from the contractor stating that the 
      claimed cost had been paid in full per notice dated August 8, 1989.  On 
      August 30, 1989, said affidavit was submitted to DHCR.  However, the Rent 
      Administrator disregarded the requested information.

      It is the established position of DHCR to accept affidavits in lieu of 
      original documentation which would establish the validity of the owner's 



      Thus the MCI rent increase herein is recalculated as follows:

      Total approved MCI costs are $35,000.00

      Computation of Permanent Rent Increase (Rent Controlled and Rent 

           1.  Total approved MCI cost:            $35,000.00

           2.  Commercial tenants share            $(5,981.50)
               of MCI cost

           3.  Net approved MCI cost               $29,018.50

           4.  Amortization by 60 months           $   483.64

           5.  Total number of Rent Stabilized
               and Rent Controlled rooms                  95

           6.  Rent increase per room, per month   $5.09

      Computation of Retroactive increase (arrears for Rent Stabilized apartments 

           $5.09 x 26 months of arrears = $132.34 per room
           -collectible only until full amount is paid.

      Supplementary Computation:

           1. Cost of item benefitting             $35,000.00
              commercial tenants:

           2. Yearly residents rents: a)           $128,650.20
              plus yearly benefitted
              commercial rents:       b)           $ 26,520.00

                                        Total      $155,170.20

           3.  Benefitted commercial rents        
               divided by total rents                 17.09%

           4.  Benefitted commercial tenants       $5,981.50
               share of MCI cost

      Accordingly, the owner may collect the difference between the amounts 
      specified on the order issued under Docket No. BD410693OM and those issued 

      The tenants may pay any arrears arising as a result of this order and 
      opinion to cover the period between the effective date and the issuance of 
      the order herein, if applicable, in twenty-four equal monthly installments.  
      Current tenants are not required to pay arrears for the period prior to the 
      date they took occupancy.



      The Commissioner notes that as to any apartment which first became subject 
      to rent stabilized jurisdiction after the November 1, 1989, issuance date 
      of the Administrator's order, the additional rent increases provided for 
      herein are not collectible since the free market rent charged the first 
      rent stabilized tenant includes any and all services then being provided.

      It is further noted that collection of said increases is subject to the 
      statutory limitation on the annual collectibility of 6% of the April, 1987 
      rent roll for the permanent increase plus an additional 6% for temporary 
      arrears with any costs over said 12% to be spread forward equally in future 
      years for rent stabilized apartments.  As to rent controlled apartments 
      that are exempted from payment of temporary arrears, the statutory 
      limitation on the annual collectibility of the permanent increase is 15% of 
      the April, 1987 rent roll with any costs over said amount to be spread 
      forward equally in future years in the same manner previously mentioned.

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

      ORDERED, that this petition be, and the same hereby is, granted; that the 
      Rent Administrator's order be, and the same hereby is, modified, so as to 
      provide that the MCI increase be based upon the total claimed cost of 
      $35,000.00 which results in an additional increase of $2.61 per room, per 
      month for rent stabilized and rent controlled apartments; that the 
      retroactive arrears are increased by an additional $67.86 per room for rent 
      stabilized apartments only; and that in all other respects said order of 
      the Rent Administrator be, and the same hereby is, affirmed.


                                           JOSEPH A. D'AGOSTA
                                           Deputy Commissioner



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