STATE OF NEW YORK
                      DIVISION OF HOUSING AND COMMUNITY RENEWAL
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK, 11433

          -----------------------------------X     ADMINISTRATIVE REVIEW
          IN THE MATTER OF THE ADMINISTRATIVE      DOCKET NOS.: DC210330RT
          APPEALS OF                                            DC210390RT

          Marvin Baker and Luther Watts                       
                                                   RENT ADMINISTRATOR'S
                                  PETITIONERS      DOCKET  NO.:  BC230146OM
          -----------------------------------X


            ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW


          The  petitioner-tenants  timely  refiled  administrative  appeals
          against an  order  issued  on  January  13,  1989,  by  the  Rent
          Administrator  (92-31  Union  Hall  Street,  Jamaica,  New  York)
          concerning the housing accommodations  known  as  474  East  98th
          Street, Brooklyn, New York, apartments A3  and  B1,  wherein  the
          Administrator  granted  major  capital  improvement  (MCI)   rent
          increases for the controlled and  stabilized  apartments  in  the
          subject premises.

          The owner commenced this  proceeding  below  by  filing  its  MCI
          application in March of 1987 for a new intercom system and a  new
          heating system. In support of its application, the owner submitted 
          copies  of  the  contracts,  the   contractors'   certifications,
          government approvals and cancelled checks.

          The owner certified that on April 28, 1987,  copies  of  the  MCI
          application were served by the owner on all the tenants. Along with 
          the application was a form to be used by the  tenants  for  their
          responses.

          The petitioner-tenants did not file an objection to  the  owner's
          application.

          The Administrator's order appealed herein authorized an MCI  rent
          increase for the new intercom and heating systems. 

          On appeal, the tenant of apartment A3 alleges, in substance, that 
          repairs only were done on the boiler and there is still no heat at 
          times; that the intercom system is defective; and that the repairs 
          performed do not warrant a rent increase.



          ADMINISTRATIVE REVIEW DOCKET NOS.: DC210330RT et. al.














          The tenant of apartment B1 alleges, in substance, that there  are
          two buildings involved in the MCI (474 and 476 East 98th Street), 
          but only one building (474 East 98th Street) is being charged with 
          the retroactive and monthly increase; and that a previous temporary 
          fuel rent increase was never removed from his rent.

          In response to the  tenants'  petitions,  the  owner  states,  in
          substance, he has nothing to do with the address, 476  East  98th
          Street, and that heat and hot water are provided to all tenants.

          After a careful consideration of the entire evidence of record, the 
          Commissioner is of the opinion that these administrative  appeals
          should be denied.

          Rent increases for MCIs are authorized by Section 2202.4  of  the
          Rent and Eviction Regulations for the rent controlled  apartments
          and Section 2522.4 of the Rent Stabilization Code  for  the  rent
          stabilized apartments. Under rent control, an increase is warranted 
          where there has been since July 1, 1970 an MCI required  for  the
          operation, preservation, and maintenance of the structure.  Under
          rent stabilization, the improvement must general y  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. It is the established position of the Division  that
          the installation of the new intercom and heating systems, as in the 
          instant case, qualifies as an MCI. 

          The Commissioner notes that the petitioner-tenants did not  raise
          any objections to the adequacy of the  installations  while  this
          proceeding was pending before the Rent Administrator even  though
          they were afforded the opportunity to do so.

          Fundamental principles of the administrative appeal  process  and
          Section 2529.6 of the Rent Stabilization Code prohibit a party from 
          raising issues on appeal which  were  not  raised  below  as  the
          petitioner-tenants could have raised the very issues  before  the
          Rent Administrator which they now seek to raise for the first time 
          on  appeal.  Accordingly,  the  Commissioner  is  constrained  to
          foreclose consideration of these issues in this  proceeding.  The
          Commissioner notes, however, that  the  owner's  application  and
          contract for the work performed are limited only to  the  subject
          building of 474 East 98th Street.

          As to the tenants' contention with respect to the maintenance  of
          services, a review of the Division's records discloses that there 
          has never been an order outstanding against the subject  premises
          based on the owner's failure to maintain building-wide services. 

          ADMINISTRATIVE REVIEW DOCKET NOS.: DC210330RT et. al.








          However, the determination herein is without prejudice to the right 
          of the tenants to file an application for a rent reduction based on 
          a diminution of services, if the facts so warrant.

          With regard to Mr. Baker's allegation about a previous  temporary
          fuel rent increase which was  never  removed,  the  determination
          herein is without prejudice to the right of the tenant herein  to
          file an  appropriate  complaint  of  rent  overcharge  with  this
          Division, if the facts so warrant.

          On the basis of the entire evidence of record, it is found that the 
          Administrator's order is correct and should be affirmed.

          THEREFORE, in accordance with the applicable provisions of the Rent 
          Stabilization Law and Code, the Rent and Eviction Regulations for 
          the City of New York, and Operational Bulletin 84-1, it is

          ORDERED, that these administrative appeals be, and the same hereby 
          are denied; and that the Administrator's order be, and  the  same
          hereby is, affirmed.


          ISSUED:







                                             -------------------------------
                                              Joseph A. D'Agosta
                                              Deputy Commissioner






    

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