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

          -----------------------------------X     ADMINISTRATIVE REVIEW
          APPEAL OF                                            
          Various Tenants of 23 East 109th                      
          Street, New York, New York               RENT ADMINISTRATOR'S
                                  PETITIONERS      DOCKET  NO.:  AG430040OM


          The petitioner-tenants timely refiled  an  administrative  appeal
          against an  order  issued  on  February  6,  1989,  by  the  Rent
          Administrator  (92-31  Union  Hall  Street,  Jamaica,  New  York)
          concerning the housing accommodations  known  as  23  East  109th
          Street, New York,  New  York,  various  apartments,  wherein  the
          Administrator partially 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  January  of  1986   based   on   the   following
          installations: adequate rewiring, apartment windows, boiler/burner, 
          intercom system, lobby door, mail boxes, fuel  computer,  and  an
          elevator cab. In support of its application, the owner  submitted
          copies of the contracts, government approvals and cancelled checks.

          On August 28, 1986, a copy of the MCI application was served by the 
          owner upon the tenants. Along with the application was a form to be 
          used by the tenants for their responses.

          Only the tenant of apartment 2L objected to  the  rent  increase,
          claiming that she couldn't afford a rent increase. No other tenant 
          filed an objection against the owner's application.

          The Administrator's order appealed herein authorized an MCI  rent
          increase for apartment windows, a boiler/burner, intercom  system
          and lobby door. Disallowed by the Administrator were the  claimed
          costs of the mail boxes, fuel computer and elevator cab (not here 
          at issue) as those items  did  not  constitute  MCIs.  The  owner
          withdrew the rewiring work from its application.


          On appeal, the petitioner-tenants state, in substance, that A) the 
          window installation is defective, as evidenced by air  and  water
          leaks; B) the entrance door does not have a lock and the intercom 
          does not work in every apartment; C) during the summer and spring 
          seasons, the water is lukewarm and in the  winter,  the  heat  is
          inadequate, and D) the owner has several violations  against  the
          subject premises.

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

          Rent increases for major capital improvements 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
          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 has expired. 

          It is the established position of  the  Division  that  the  work
          approved by the Administrator meets the definitional requirements 
          of a major capital improvement for which a rent increase  may  be
          warranted. The record shows that the owner submitted copies of the 
          contracts,  contractors'   statements,   requisite   governmental
          approvals and cancelled checks  which  indicate  that  the  owner
          correctly complied with the applicable  procedures  for  a  major
          capital improvement rent increase;  and  that  the  increase  was
          properly computed based on the proven cost of the installation. The 
          petitioners herein, on the other hand, have failed to established 
          either in the proceeding below or on appeal the alleged inadequacy 
          of the work performed or that services were not being maintained.

          The Commissioner notes that  the  tenants  did  not  raise  these
          objections while this proceeding  was  pending  before  the  Rent
          Administrator although 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. 


          As to the tenants' contention with respect to the maintenance  of
          services, a review of the Division's records discloses that there 
          were no orders outstanding against the subject premises based  on
          the owner's failure to maintain building-wide services at the time 
          the Administrator's order  was  issued.  Furthermore,  a  current
          examination of the records of the New  York  City  Department  of
          Housing Preservation and Development indicate that no immediately 
          hazardous violations are on file against the subject premises. 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 building-wide or individual apartment services,  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 this administrative appeal be, and the same hereby is 
          denied; and that the Administrator's order be, and the same hereby 
          is, affirmed.


                                              Joseph A. D'Agosta
                                              Deputy Commissioner


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