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

     ------------------------------------X  ADMINISTRATIVE REVIEW DOCKET
     APPEAL OF                                   EG 210124-RT; EG 210213-RT;
                                         :       EG 210214-RT; EG 210215-RT;
                                                 EG 210216-RT; EG 210217-RT;
        VARIOUS TENANTS,                         EG 210218-RT; EG 210219-RT;
                           PETITIONER    :       EG 210220-RT; EG 210221-RT;
     ------------------------------------X       EG 210125-RT; EG 210126-RT;
                                                 EG 210129-RT; EG 210131-RT;
                                                 EG 220483-RT
                                                 DRO DOCKET NO.: ZBG 210658-OM


     The   above   seventeen   petitioners   filed   separate   Petitions   for
     Administrative Review against an order issued on  June  11,  1990  by  the
     District  Rent  Administrator,  Gertz  Plaza,   concerning   the   housing
     accommodations located at 1402 Avenue K, brooklyn, New York,  wherein  the
     Administrator  authorized  major   capital   improvement   rent   increase
     adjustments predicated on the installation  of  a  boiler/burner  and  the
     rewiring of the building.  A claim based on the repair  of  the  roof  was
     denied in its entirety.

     The issue in this appeal  is  whether  the  order  of  the  District  Rent
     Administrator is correct.

     The Commissioner has reviewed all of the evidence in the  record  and  has
     carefully considered that portion of the  record  relevant  to  the  issue
     raised by the administrative appeal.
     The instant proceeding was  commenced  with  the  filing  of  the  owner's
     application for a rent increase on June 29, 1987 as based upon  its  major
     capital improvement of the building, as was  required  for  its  continued
     operation, preservation and maintenance.  The owner, Mordechai  Eisenberg,
     described the building as a Class A Multiple  Dwelling  consisting  of  64
     rent  stabilized  and  31  rent  controlled  apartments,  and  one  exempt
     superintendent's apartment.  The total claimed cost of these  improvements
     was  $195,100.00,   apportioned   as   follows:   rewiring,   $126,100.00;
     replacement  of  boiler/burner,  $50,000.00;  roofing  and  waterproofing,
     $19,000.00.  As based on a  total  of  321  rooms,  the  owner  sought  an
     increase of 10.9% of the rent for rent-stabilized tenants and  $10.10  per
     room for rent-controlled tenants.  The application further stated that the 
     cost of the rewiring did not include the installation of  air  conditioner
     outlets.  A total of 49 tenants submitted answers to the application which 
     stated, in substance: 1) the rewiring of the  building  was  not  a  major
     capital improvement but a limited alteration consisting of  replacing  the
     fuse boxes with circuit breakers, and installing two new outlets in the 


          DOCKET NUMBER: EG 220312-RT; ETAL
     kitchens of all  apartments;  2)  the  roof  was  not  replaced  but  only
     repaired, and this  was  poorly  done  because  there  were  still  leaks,
     especially on  the  top  (6th)  floor;  and  3)  the  building  still  has
     inadequate heat and hot water. A majority of the  complainants  challenged
     the owner's intended increase of 10.9% for stabilized tenants and  $10.,10
     per room for rent controlled tenants, saying the owner is limited to a  6%
     increase only.  Several tenants also challenged the increase because their 
     leases made no mention of the owner's right to have it.  One  tenant  also
     complained that the new outlet did not have a covering  plate, which was a 

     In  response  to  an  inquiry  from  the  Rent  Administrator,  the  owner
     submitted, on January 20, 1988, a Certificate of Electrical Inspection and 
     copies of cancelled checks covering work  done  by  the  Milfred  Electric

     On February 27,  1990  the  Rent  Administrator  requested  the  following
     additional information of the owner: the age  of  the  boiler/burner  that
     was replaced; the sufficiency of electrical  outlets  to  accommodate  air
     conditioners in the living room and bedroom after rewiring; if a gas train 
     was used, a certified Form B109 or gas card;  the  complete  current  rent
     roll, indicating the number of rooms in each apartment, and identification 
     of commercial units.

     On March 8, 1990 the owner responded that the wiring installation provided 
     sufficient capacity to accommodate air conditioner lines, as was  affirmed
     by a letter from the contractor that cited a capacity of 220 volts,  which
     was sufficient for air conditioners in the living room and  bedroom.   The
     owner also contested the allegations of various tenants that heat and  hot
     water was inadequate.  A letter from the Star Industrial Service  Company,
     which installed the boiler and  burner,  accompanied  the  answer.   Dated
     March 5, 1990, the statement affirmed that, upon inspection, the equipment 
     was found to be in good working order and was  providing  sufficient  heat
     and hot water to all 96 apartments.  The owner's answer also  stated  that
     the old boiler was approximately 45 years old when replaced.  It is noted, 
     however, that the only supplement to RA-79 in the record is incomplete and 
     does not state  the  age  and  model  of  the  equipment  being  replaced.
     Finally, a later  rent  roll,  indicating  the  number  of  rooms  in  all
     apartments was also submitted.

     On May 24,  1990,  a  staff  member  of  the  DHCR  conducted  a  physical
     inspection of the subject building and apartments 1D,4J,6E,6F,6N,4G,6D,6O, 
     6A and 6L.  The adequacy of heat and hot water from the new boiler was the 
     primary purpose of the inspection.  However,  since  seasonal  temperature
     was moderate, only hot water was tested.  The inspection report showed hot 
     water  temperature  of  either  120oF  of   124o   for   all   apartments.
     Additionally, the inspectors looked into complaints  of  roof  leaks  from
     the 6th floor apartments.  The inspection report cited leak damage to  the
     walls and ceilings of apartments 6A and 6D.

     On June 11, 1990, the Administrator issued order #BG-210658-OM,  in  which
     the entire claimed cost  of  the  wiring  system  and  the  boiler/burner,
     totalling $176,100.00, was approved as a Major Capital Improvement and  an


          DOCKET NUMBER: EG 220312-RT; ETAL
     increase of $9.14 per room per month was ordered for rent  controlled  and
     rent  stabilized  apartments.   The  order  also  found  that   the   roof
     installation failed to meet the requirements of the DHCR as an  inspection
     of the building revealed evidence of roof leaks.

     A total of 17 tenants filed petitions against the  order.   The  petitions
     stated in aggregate, that an MCI should not have been granted because  the
     work merely extended service that the  tenants  were  entitled  to.   They
     stated that the rewiring was necessary because the old system was  a  fire
     hazard and had accumulated thousands of dollars in fines  for  violations.
     Also, the boiler was only installed to replace the old one, which was  not
     working  properly.   One  tenant,  John  Theodorow,  complained  that  the
     rewiring was only a partial replacement of fuses with circuits,  and  that
     only the kitchen received new outlets.
     In its answer to the petitions, the owner stated that the tenants'  claims
     tended to support the need for the Major Capital Improvement, which  would
     include a new boiler/burner according to the Rent Stabilization Code.  

     It is the opinion of the  Commissioner  that  these  petitions  should  be

     Rent increases for major capital improvements are  authorized  by  Section
     2202.4 of the Rent and Eviction Regulations for rent controlled apartments 
     and Section 2522.4 of the  Rent  Stabilization  Law  for  rent  stabilized
     apartments.  Under rent control, an increase is warranted where there  has
     been since July 1, 1970 a  major  capital  improvement  required  for  the
     operation, preservation, or 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 life has expired.   In  either
     case, the rent increase is computed based on an amortization of  the  cash
     cost of the improvement over five years or sixty months.

     In the instant case, the Administrator approved  the  owner's  application
     for an MCI increase for a  new  boiler/burner  and  the  rewiring  of  the
     building, but rejected the work performed to repair the roof as inadequate 
     upon inspection.  Seventeen tenants filed petitions  to  contest  the  two
     approved items.

     The record discloses that the new boiler/burner  was  correctly  installed
     and has performed adequately.  An inspection conducted  below  established
     that hot water was sufficient  in  all  tested  units.   Heating  was  not
     inspected as seasonally inappropriate at that time (May, 1990), but  there
     are no outstanding complaints of inadequate heating filed with  the  DHCR.
     If anything,the  tenant's  claims  that  the  old  boiler  wasn't  working
     properly reaffirms the need to replace it.  Furthermore, after 45 years in 
     operation, the old boiler well exceeded the useful life of 25  years  that
     the DHCR has consistently recognized for this equipment.

     On the question of the rewiring, it is noted that none of the 17 petitions 
     alleges that the work was improperly  performed.   As  with  the  comments
     about the boiler and burner, the tenants' statements that the old 

          DOCKET NUMBER: EG 220312-RT; ETAL
     electrical wiring was in  need  of  replacement  actually  reinforces  the
     owner's position.  Similarly without merit is  the  claim  that  the  rent
     should not be raised because electrical  service  is  something  that  all
     tenants are "entitled to".  Section 2522.4  of  the  current  code  (cited
     above) recognizes that certain rehabilitation  is  so  necessary  for  the
     "operation, preservation or maintenance" of  a  building  that  its  value
     exceeds that of the ordinary maintenance of services.   It  has  been  the
     policy of the Division to accept the rewiring of a  building  as  a  major
     capital improvement if it provides the equivalent of new copper risers and 
     feeders extending from the property box in the basement to  every  housing
     accommodation and is  also  of  sufficient  capacity  to  accommodate  the
     installation of air  conditioning  circuits  in  the  living  room  and/or
     bedroom (220 volts).  In this case, the record establishes that  the  work
     performed  met  those  specific   requirements,   as   verified   by   all
     documentation  therein,  including  the  contractor's  affirmation  and  a
     Certificate of Electrical Inspection from  the  Department  of  Buildings.
     Moreover, the installation of new outlets  in  the  kitchen  provides  the
     tenants with an immediate benefit from the improvement.

     THEREFORE, in accordance with the provisions  of  the  Rent  Stabilization
     Code and Law and the Rent and Eviction Regulations, it is

     ORDERED, that the tenants' petitions be and the same hereby are denied and 
     the Administrator's order be and the same hereby is affirmed.


                                             ELLIOT SANDER
                                           Deputy Commissioner


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